Legislature(1999 - 2000)
02/02/1999 03:00 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL
SERVICES STANDING COMMITTEE
February 2, 1999
3:00 p.m.
MEMBERS PRESENT
Representative Fred Dyson, Co-Chair
Representative John Coghill, Co-Chair
Representative Jim Whitaker
Representative Joe Green
Representative Carl Morgan
Representative Tom Brice
Representative Allen Kemplen
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
Long-Term Care Task Force Report
Organizational Meeting
* HOUSE BILL NO. 27
"An Act relating to graduate student loans; and providing for an
effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 27
SHORT TITLE: GRADUATE STUDENT LOANS
SPONSOR(S): REPRESENTATIVES(S) MULDER
Jrn-Date Jrn-Page Action
1/19/99 25 (H) PREFILE RELEASED 1/8/99
1/19/99 25 (H) READ THE FIRST TIME - REFERRAL(S)
1/19/99 25 (H) HES, FINANCE
2/02/99 (H) HES AT 3:00 PM CAPITOL 106
WITNESS REGISTER
REPRESENTATIVE CON BUNDE
Alaska State Legislature
Capitol Building, Room 501
Juneau, Alaska 99801
Telephone: (907) 465-4843
POSITION STATEMENT: Presented Long-Term Care Task Force Report.
SENATOR GARY WILKEN
Alaska State Legislature
Capitol Building, Room 514
Juneau, Alaska 99801
Telephone: (907) 465-3709
POSITION STATEMENT: Presented Long-Term Care Task Force Report
REPRESENTATIVE ELDON MULDER
Alaska State Legislature
Capitol Building, Room 507
Juneau, Alaska 99801
Telephone: (907) 465-2647
POSITION STATEMENT: Testified as sponsor of HB 27.
DIANE BARRANS, Executive Director
Postsecondary Education Commission
Department of Education
3030 Vintage Boulevard
Juneau, Alaska 99801
Telephone: (907) 465-6740
POSITION STATEMENT: Testified on HB 27.
TERESA WILLIAMS, Assistant Attorney General
Fair Business Practices
Civil Division (Anchorage)
Department of Law
1031 West 4th Avenue
Anchorage, Alaska 99501-1994
Telephone: (907) 269-5100
POSITION STATEMENT: Testified on HB 27.
ACTION NARRATIVE
TAPE 99-1, SIDE A
Number 0001
CO-CHAIRMAN DYSON called the House Health, Education and Social
Services Standing Committee meeting to order at 3:00 p.m.
Members present at the call to order were Representatives Dyson,
Coghill, Whitaker, Green, Morgan, Brice and Kemplen.
LONG-TERM CARE TASK FORCE REPORT
SUMMARY OF INFORMATION
REPRESENTATIVE CON BUNDE, Alaska State Legislature, Co-Chair,
Long-Term Care Task Force, presented the Long-Term Care Task
Force Final Report January 1999. He stated that this issue
concerns not only senior citizens but the disabled. He is not
sure of the role of the state. This task force has completed its
work, but Representative Bunde would like to see someone follow
up on this issue.
SENATOR GARY WILKEN, Alaska State Legislature, Co-Chair, Long
Term Care Task Force, pointed out this issue is not going to go
away and the state needs to address it. He referred to the 31
recommendations to be carried out.
COMMITTEE ACTION
CO-CHAIRMAN DYSON appointed Representatives Green, Brice and
Kemplen to a task force to draft legislation recommended by the
Long Term Care Task Force.
The committee took a brief at-ease at 3:32 p.m.
Number 1879
ORGANIZATIONAL MEETING
CO-CHAIRMAN DYSON reconvened the committee at 3:35 p.m. and urged
the committee to do their business with a great deal of dispatch.
He reviewed procedures and expectations of the committee
emphasizing the need to be respectful of members of the public
who testify. He also promised to intervene if testifiers attack
committee members. There have been been suggestions that this
committee should be responsible for committee oversight of some
departments. It was noted that committee work for Representative
Coghill should go through Wes Keller, Representative Dyson's
aide.
HB 27-GRADUATE STUDENT LOANS
Number 2079
CO-CHAIRMAN DYSON introduced the next order of business as HOUSE
BILL NO. 27, "An Act relating to graduate student loans; and
providing for an effective date."
REPRESENTATIVE ELDON MULDER, Alaska State Legislature, sponsor of
HB 27, explained a constituent raised a concern regarding Western
Interstate Commission on Higher Education (WICHE) which allows
students in participating states to receive a tuition break;
basically 1.5 times the resident rate. In the past a flat grant
was given to participate in the WICHE program, but with budget
constraints that became cost prohibitive. Last year repayment
constrictions were put on Washington, Alaska, Montana, Idaho
Medical Education Program (WAMI).
REPRESENTATIVE MULDER noted as the opportunity of utilizing the
student loan program was explored, it became attractive to WICHE
because they want more Alaskans to participate while Alaskan
students would benefit through a price break. HB 27 allows
Alaska's students to participate in the WICHE program utilizing
the student loan program and get a tremendous price break on
tuition from those out-of-state institutions. The Postsecondary
Commission has some small technical changes on this bill, and the
Commission needs regulatory authority to implement this bill.
Number 2185
REPRESENTATIVE GREEN indicated WICHE would only apply to those
students wanting to take something that wasn't offered in-state.
"Do you know what the WICHE repayment percentage has been
compared to non-WICHE students?"
REPRESENTATIVE MULDER responded that this program is not
available now, therefore, he didn't know. He guessed a graduate
students may be more sincere about repayment than an
undergraduate student who may or may not make it and have huge
financial debt several years later.
REPRESENTATIVE GREEN referred to the fiscal note that states
"Program funds disbursed as student loans are not subject to the
Executive Budget Act, therefore an appropriation is not
required." He asked, "if we supply x number of dollars to look
for schools not available here, do we have any idea how much
money the state would have out in perpetuity?"
REPRESENTATIVE MULDER suggested Diane Barrans, Executive
Director, Postsecondary Education Commission, could answer that
question.
Number 2280
REPRESENTATIVE BRICE asked for clarification of the language on
lines 12 and 13 of HB 27 which states, "WICHE graduate education
program." He wanted to be sure it applies to all programs, not
just a graduate program in Education.
REPRESENTATIVE MULDER said the Postsecondary Education Commission
would have to make that interpretation.
REPRESENTATIVE GREEN commented "I think if that had been the
desire, it would have been capitalized."
REPRESENTATIVE KEMPLEN referred to lines 6 and 7 of HB 27 and
suggested the word "program" be changed to "degree".
TAPE 1, SIDE B
Number 0001
REPRESENTATIVE MULDER explained getting a degree isn't required
when financial assistance is offered. The student can be in a
program but it can't be stipulated that the student is going to
get a degree.
REPRESENTATIVE GREEN asked about the word "pursuing". Could
someone qualify for this to just take some courses, or does it
need to be a degree program?
Number 0041
DIANE BARRANS, Executive Director, Postsecondary Education
Commission, explained that it's inherent in the program to be
admitted into a degree program. The term "program" here is not
problematic.
REPRESENTATIVE WHITAKER made a point of clarification: "Medical"
was deleted, "graduate program" was inserted on lines 6 and 7.
REPRESENTATIVE MULDER responded "It is, as well as lines 12
through 14 which state 'Western Interstate Commission on Higher
Education graduate education program to agree to repay to the
state the financial support provided to that person by the state'
which within those lines it stipulates you can get a student loan
to go to graduate school."
Number 0098
REPRESENTATIVE KEMPLEN felt when you're pursuing something, that
indicates you want to eventually attain it. He suggested using
"participating" rather than "pursuing". "Pursuing" doesn't
logically link with the intent.
Number 0195
MS. BARRANS explained residents in this category are pursuing
admission into eligible programs. Once accepted, he/she would be
participating. The Commission could work with either word.
MS. BARRANS informed the committee she contacted the WICHE
Compact office in Boulder and copied them with HB 27. The memo
from the Director of the Professional Student Exchange Programs
(PSEP) supported this effort to revitalize the program. She noted
that if Alaska revises its participation in this format, Alaska
would be the only state in the compact that requires a repayment
without some service obligation as an alternative to repayment.
Other states that support students in graduate education programs
allow them to return to the state and serve to receive some
reduction, in part or in whole, in their obligation to the state.
This would be a philosophical change for a state participating in
the WICHE Compact. The Compact office acknowledges there are
economic constraints and they would invite Alaska's participation
in the program even under these circumstances. The memo will be
made available to the committee.
MS. BARRANS said this legislation will be before the Commission
and the Alaska Student Loan Corporation at the February and March
meetings. Ms. Barrans expected the Commission and Alaska Student
Loan Corporation to support the concept of the bill. Most of the
public institutions in the west only admit residents to their
graduate education programs. The subsidy on the part of the
state is substantial and the only exceptions are students
accepted under the Compact, under the philosophy of regional
resource sharing. This program will allow Alaskans access into
certain graduate fields.
MS. BARRANS identified two structural concerns with this bill:
1) The Commission would need to have explicit authority to adopt
regulations to implement the program;
2) WAMI loan provisions would need to be placed into Section
14:43, Scholarships, Loans and Grants, which is not administered
by WICHE, in order to remove any questions about forgiveness
benefits.
Number 0353
REPRESENTATIVE DYSON asked if Ms. Barrans had language to amend
this bill and would it be done by Thursday.
MS. BARRANS agreed that it could be done. In response to a
question from Representative Brice that even though the state
participated in WICHE before, under HB 27 the loan will be
repaid. It is important to develop conditions and terms that
reduce risk through this program. A separate Professional
Student Exchange Program will loan students amounts which exceed
what is currently available under the Alaska Student Loan
Program.
REPRESENTATIVE BRICE asked if there is current authority to
participate in the WICHE program. He questioned if the financial
aid to that is not through the student loan program, it stands to
reason that the Commission does not need explicit authority to
adopt regulations to do this, but that you already have that
authority under general provisions.
MS. BARRANS explained in the past, the program utilized pass
through dollars. Money was passed along to the WICHE Compact
staff in Boulder who then dispersed it directly to institutions.
None of the money went directly to the students. Ms. Barrans
referred to Alaska Statutes, Section 14.44.025 which explicitly
speaks to services under that Compact: "State participation
under Articles VIII and XIII of the Western Regional Higher
Education Compact shall be limited to the provision of adequate
services and facilities in the professional fields of study
available through the Professional Student Exchange Program
administered by the Western Interstate Commission on Higher
Education." Under Section 14.44.035. Administration. "The ACPE
shall administer the state's participation in the Western
Regional Higher Education Compact" but according to the Attorney
General's office, we need to have explicit authority if we're
going to promulgate regulations.
Number 0550
MS. BARRANS responded to a question from Representative Green
regarding reciprocity. The Professional Student Exchange Program
identified those programs as ones having a high cost to establish
and for which there is a need to share resources in the west.
Those programs are identified by WICHE staff and ratified by the
representatives to the Commission. Currently there are only 14
fields available through the PSEP. There are two other exchange
programs that are administered under the WICHE Compact: Western
Regional Graduate Exchange Program (WGRP) and Western
Undergraduate Program (WUE). Residents from other states
participate in Alaskan education programs under those other two
programs. We are a receiving state but not in the Professional
Student Exchange Program.
REPRESENTATIVE GREEN asked would the state be subsidizing those
outside students in expensive programs to some degree.
MS. BARRANS responded the rates vary depending on which exchange
program is used: graduate students pay resident tuition;
undergraduate students pay 150% of the resident tuition. The
reason a support fee is paid by a participating state in the PSEP
is to offset the cost of subsidizing the graduate education
program. A state can choose to subsidize their own residents,
but usually doesn't choose to subsidize the education of non-
residents. When 10 Alaskans attend a physical therapy program in
North Dakota through this program, a support fee is paid that's
associated with each student. The fee goes to the institution
receiving those students. The student pays a resident rate of
tuition out-of-pocket but the state sends a support fee. In HB
27 the participants will incur the support fee as an additional
debt. Those are the terms and conditions that the Commission
needs to establish by regulation.
REPRESENTATIVE GREEN asked if it would be desirable to include
provisions for a resident to work off some of their indebtedness
by returning to Alaska.
MS. BARRANS replied, "It has always been the Commission's
position that if the public policy objective of the program is
not only to gain access but to provide a source of a work force
to the state of Alaska, that there has to be an incentive for
folks to return if in fact they're incurring all this debt. We
have always supported a forgiveness benefit in the past." It
couldn't be funded through corporation receipts because they are
obligated funds under the Alaska Student Loan Corporation. The
amount eligible for forgiveness would have to be funded from the
general fund.
MS. BARRANS responded to questions by Representative Brice about
the student indebtedness to the state and what loan program is
being used. The support fees vary depending on the field of
study. HB 27 establishes a new loan program in addition to the
regular student loan program the state now provides.
Number 874
TERESA WILLIAMS, Assistant Attorney General, Fair Business
Practices, Civil Division (Anchorage), Department of Law,
testified via teleconference from Anchorage. There needs to be
explicit authority in HB 27 for the Commission to draft
regulations to implement the loan program. The language of HB 27
merely states that there will be a repayment obligation and it
would be necessary to set up how that loan program works which
the Commission would need to do through regulation. "I also
agree that the WAMI program needs to be pulled out of WICHE
program. Under the current language the forgiveness provisions
apply to the WICHE program because that particular statute which
was enacted last year allows for receipt of financial aid under
the WICHE section. If it remains where it is, there will be
confusion that there would be forgiveness of all the WICHE
programs." Ms. Williams agreed with Representative Dyson that
new wording for HB 27 would be ready on Thursday for action.
Number 953
MS. WILLIAMS agreed the word "degree" could be substituted for
"program" and that would be more appropriate.
REPRESENTATIVE MULDER reported he will work with the staff to
prepare a committee substitute to incorporate changes and
recommendations of the attorney general's office which should be
ready for the committee Thursday morning.
Number 1059
REPRESENTATIVE GREEN asked if there was any merit to trying to
pursue a forgiveness benefit if a student returned to the state
and worked.
REPRESENTATIVE MULDER responded he would love to see that happen
again but considering the fiscal restraints we have, we can't
afford it right now.
REPRESENTATIVE DYSON said the hearing on HB 27 would be continued
on Thursday. [HB 27 was held over.]
ADJOURNMENT
Number 1214
CO-CHAIRMAN DYSON adjourned the House Health, Education and
Social Services Standing Committee meeting at 4:18 p.m.
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