03/05/2021 09:00 AM Senate EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| SB94 | |
| SB58 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| *+ | SB 58 | TELECONFERENCED | |
| *+ | SB 94 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE EDUCATION STANDING COMMITTEE
March 5, 2021
9:02 a.m.
MEMBERS PRESENT
Senator Roger Holland, Chair
Senator Gary Stevens, Vice Chair
Senator Shelley Hughes
Senator Peter Micciche
Senator Tom Begich
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 94
"An Act relating to the education loan program and Alaska
supplemental education loan program; and providing for an
effective date."
- HEARD & HELD
SENATE BILL NO. 58
"An Act relating to funding for correspondence programs; and
providing for an effective date."
- HEARD & HELD
"ALASKA ACADEMIC IMPROVEMENT & MODERNIZATION ACT"
- PENDING INTRODUCTION & REFERRAL
PREVIOUS COMMITTEE ACTION
BILL: SB 94
SHORT TITLE: EDUCATION & SUPPLEMENTAL LOAN PROGRAMS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/24/21 (S) READ THE FIRST TIME - REFERRALS
02/24/21 (S) EDC, FIN
03/03/21 (S) EDC WAIVED PUBLIC HEARING NOTICE,RULE
23
03/05/21 (S) EDC AT 9:00 AM BUTROVICH 205
BILL: SB 58
SHORT TITLE: FUNDING FOR CORRESPONDENCE PROGRAMS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/29/21 (S) READ THE FIRST TIME - REFERRALS
01/29/21 (S) EDC, FIN
03/03/21 (S) EDC WAIVED PUBLIC HEARING NOTICE,RULE
23
03/05/21 (S) EDC AT 9:00 AM BUTROVICH 205
WITNESS REGISTER
SANA EFIRD, Executive Director
Alaska Commission on Postsecondary Education (ACPE)
Executive Officer
Alaska Student Loan Corporation (ASLC)
Juneau, Alaska
POSITION STATEMENT: Gave a presentation on SB 94 on behalf of
the administration.
KERRY THOMAS, Director of Program Operations
Alaska Commission on Secondary Education
Juneau, Alaska
POSITION STATEMENT: Answered questions about SB 94.
MICHAEL JOHNSON, Ph.D., Commissioner
Department of Education and Early Development (DEED)
Juneau, Alaska
POSITION STATEMENT: Introduced SB 58 on behalf of the
administration.
HIEDI TESHNER, Director
Finance and Support Services
Department of Education and Early Development (DEED
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 58.
ACTION NARRATIVE
9:02:40 AM
CHAIR ROGER HOLLAND called the Senate Education Standing
Committee meeting to order at 9:02 a.m. Present at the call to
order were Senators Hughes, Begich, and Chair Holland. Senators
Micciche and Stevens arrived shortly thereafter.
SB 94-EDUCATION & SUPPLEMENTAL LOAN PROGRAMS
9:03:12 AM
CHAIR HOLLAND announced the consideration of SENATE BILL NO. 94
"An Act relating to the education loan program and Alaska
supplemental education loan program; and providing for an
effective date."
He stated his intent to have the administration introduce the
bill and then hold it in committee. He asked Sana Efird to
introduce the bill.
9:03:40 AM
SANA EFIRD, Executive Director, Alaska Commission on
Postsecondary Education (ACPE), Executive Officer, Alaska
Student Loan Corporation (ASLC), Juneau, Alaska, began by
presenting the missions of Alaska Commission on Postsecondary
Education (ACPE) and Alaska Student Loan Corporation (ASLC) on
slide 2:
The Alaska Commission on Postsecondary Education supports
Alaskans' access to and success in postsecondary education
and career training after high school.
The Alaska Student Loan Corporation operates as an
enterprise agency of the State of Alaska, funding and
facilitating the Alaska Student Loan Program and the
related work of the Alaska Commission on Postsecondary
Education.
9:06:40 AM
MS. EFIRD said that SB 94 addresses requests from Alaska's
higher education community and student loan borrowers by
expanding eligibility for the Alaska refinance loan program,
removing current loan limits from statute, and clarifying
language to offer a loan program with immediate repayment to new
borrowers. As tuition rates and overall costs to attend
postsecondary education have risen nationally and in Alaska and
with the growing need to establish a well-trained Alaskan
workforce to fuel the state's economy, it is now crucial more
than ever that Alaska's students have access to low cost
education funding that meets their full financial needs to
achieve career training and/or college credentials.
MS. EFIRD said federal loans no longer meet Alaska students'
full financial needs. Those loans are not always less expensive
than Alaska loans. Private loans generally cost more with lower
approval rates. Alaska state loan programs fill the gap with
low-cost, high-quality loans. Current state loan limits, though,
are becoming a barrier to Alaska students who may not be able to
attain funding from private lenders due to strict underwriting
criteria. Private loans are also on average subject to higher
interest rates than those from the ASLC. SB 94 would remove loan
limits from statute and provide the loan corporation with the
authority to set loan limits to meet the changing financial
needs of Alaska students. Furthermore, the other changes in the
bill would expand eligibility for the ASLC refinanced loans and
allow Alaska student loan borrowers the option to apply for a
loan program with immediate repayment. These proposed changes
would provide additional loan financing options with reduced
interest rates and overall lower costs.
9:09:22 AM
MS. EFIRD presented the sectional analysis:
Section 1: Amends AS 14.43.122(b)
• Expands Eligibility for Alaska Refinance Loans
o Currently eligible: Alaska residents only
o Proposed: previous borrower, cosigner, or
beneficiary of an Alaska loan
o Proposed: Alaska high schools and postsecondary
institutions graduates
SENATOR BEGICH asked her to confirm that this isn't offering
loans to anybody other than Alaskan residents. It is for those
who may have been eligible for a loan and have moved out of
state but still have the loan burden to Alaska. He asked what is
driving the change.
MS. EFIRD replied the change is at the request of a number of
student loan borrowers. They still have a nexus to Alaska; this
is the reason for the inclusion of must be an Alaska high school
graduate or graduate of a postsecondary education. It also
includes current student loan borrowers or cosigners who have
had a loan with the state of Alaska and moved out of state. Now
they are asking to come back and refinance those Alaska loans
into the new refinance program, which allows them to consolidate
all their loans to a lower-interest rate loan, so it is a
benefit to those student borrowers.
9:12:32 AM
SENATOR MICCICHE said he does not know what the default rate is,
but he assumes the benefit to the state is reducing the default
rate for those who are no longer in Alaska but would like to
meet their commitments.
MS. EFIRD answered that is part of it. She doesn't have the
current default rate in front of her but can get that. This is
really to respond to the requests from borrowers who say, the
state gave them a loan originally and now the state has another
program with a lower interest rate that they are not eligible
for. It is responding to that need to help those borrowers.
SENATOR HUGHES offered her reading of the bill, which is that a
person would not need to be an official resident. That person
could be a resident of another state but if that person was a
graduate of an Alaskan high school or postsecondary institution
that person would qualify.
MS. EFIRD replied yes, a graduate of an Alaskan high school or
postsecondary institution.
SENATOR HUGHES said that she wanted to make that clear because
sometimes students go to school out of state and maintain their
Alaska residency, but this is for those who are not residents.
It is good if they can their repay loans. She noted that the
person would have to be a graduate but people sometimes don't
graduate from high school yet they go on to a postsecondary
institution. Sometimes they do not graduate without a degree but
they may have attended a few years and have a student loan. She
asked if the term "graduated" should be replaced with the term
"attended" high school or postsecondary institution.
MS. EFIRD responded that the administration would entertain that
but she would need to do some research. The reason for saying
graduate is that research and data show that a graduate is more
likely to pay off loans and not go into default.
SENATOR HUGHES said that makes sense.
9:15:52 AM
SENATOR STEVENS said that he would be interested in knowing the
impact that COVID-19 has had on students and the state default
rate. So many people in the state are unemployed and having
financial difficulties. This is a lost year for many students.
He asked if she had any reflections on that.
MS. EFIRD replied that she has had three months in her new role
and has a lot to learn. The committee should have received the
current higher education almanac from ACPE. That has information
about what is known at this point in time about COVID. ACPE is
still unraveling the ramifications of COVID, which are going to
be long term and far reaching. The almanac does have COVID
specific information. There has been a decrease in applications
for postsecondary institutions. Students are postponing their
plans to attend postsecondary programs. ACPE is trying to
encourage Alaskans that now is the time to get on the road to
getting a degree or certificate or training credentials, so they
can get to work and get the economy on track.
SENATOR STEVENS observed this is an anomaly this year and
perhaps next. Eventually things will get back to normal and
young people will want to get a higher education.
9:18:56 AM
SENATOR BEGICH followed up on Senator Hughes's comment saying
that only Alaska residents are eligible for the Alaska student
loans. He asked if that was correct for the original loans.
MS. EFIRD answered that is correct; the program currently is
only open to Alaska residents.
SENATOR BEGICH said that to reinforce what Senator Hughes said
about whether someone is a graduate or not of high school or
postsecondary institution located in the state, someone who
received a loan in the first place was once a resident. He
encouraged her to change that to "have attended" a high school
or postsecondary institution physically located in the state. It
is not changing the fact that someone out of state is not
getting any benefits. He clarified that the only people who
could have gotten these loans were Alaskan residents at the time
they got the loans.
MS. EFIRD replied yes if they have a loan, but this would be
expanded to include those who may not have a loan. The
administration is asking to expand the refinance options to
those who have graduated from an Alaska high school or
postsecondary institution. They may not have current loans. The
administration will expand the pool of eligibility for the
refinance loans.
SENATOR BEGICH stated that is not making out-of-state residents
eligible for a new loan. They would have had to have had a
previous loan. He doesn't want to take the state's resources and
give them through a loan process to out-of-state residents. If
they were once residents, received a loan from the state, and
time has passed, they come to the state and ask for help to
consolidate the loans they legitimately got with the state of
Alaska even though they are no longer Alaska residents--that is
what the administration is trying to.
MS. EFIRD responded yes, the proposed change is to allow
previous borrowers or cosigners who are no longer Alaska
residents to refinance the original loans, but the
administration is asking to allow the refinance program to be
used by others who have a nexus to Alaska through being a high
school or postsecondary institution graduate.
9:22:25 AM
SENATOR BEGICH said that is a concern. He asked if she is saying
if he had once attended and graduated high school in Alaska and
had federal loans or loans from other institutions from out of
state he could come with his loan package and the ACPE will help
him refinance his entire package of loans that he might have
gotten from Idaho or the U.S. government or is the
administration asking for the ability to take multiple years of
students loans that were given in Alaska and refinance them as a
new package. The first thing is unacceptable to him. The second
is extraordinarily acceptable to him.
MS. EFIRD asked Director Kerry Thomas to address this.
9:23:56 AM
KERRY THOMAS, Director of Program Operations, Alaska Commission
on Secondary Education, Juneau, Alaska, said the request the
administration is putting forth in legislation is to expand
eligibility for the refinance program as Director Efird
described. One of the primary reasons is to assist the Alaskans
who took out loans and have left the state. It is also to expand
the reach with the loan program to generate income to sustain
Alaska's loan program into the future. It is an economy of scale
issue. As the corporation's loan portfolio gets smaller, there
are certain fixed costs spread across borrowers. It is a way to
increase the size of the loan portfolio and generate income so
the corporation can provide the loan program to Alaskans in the
future.
SENATOR BEGICH said his concern is that the corporation is
saying to people who were once residents of Alaska that whatever
loans they have from Idaho, California, or the federal
government, Alaska will buy and refinance their loans, and they
will have only one payer, Alaska. Alaska is taking on the burden
of their debt. That is what this bill is saying. He asked if
that is correct.
MS. THOMAS replied that that is what the bill is putting
forward.
CHAIR HOLLAND said he wants to know the default rates, but he
can understand where the corporation is going with this as far
as generating profits to keep the program going in the future.
9:27:03 AM
MS. EFIRD continued the sectional:
Sections 2, 3 & 4: Amends AS 14.43.173(a), (c) & (d
• Removes annual loan limits from statute
• Removes lifetime maximums from statute
• Provides for the Corporation to set annual and
lifetime limits for both half-time and full-time loans
MS. EFIRD said that the ASLC would be able to set the annual
loan maximums to be more responsive to the needs of Alaska's
students and Alaska's higher education institutions, especially
as tuition costs change.
SENATOR MICCICHE said that he is concerned himself. Limits are
being removed and the ASLC is being opened up to unlimited out-
of-state exposure. He would like to see a stress test on that.
Obviously, Alaska is a small pool, which is not efficient. This
expands the pool. There must be some benefit that is perhaps not
obvious to the committee, but this is a big change. There is a
reason to include Alaska residents. It is easier to reach out
and touch them than someone who has no interest in coming back
to the state. He is a little worried, but he has a lot of
respect for Ms. Pitney. He is sure that she has a document where
she has stress tested what she is asking to do here, what the
department is asking to do. He would like to see that. Without a
limit, the corporation is potentially taking on hundreds of
thousands of dollars per student. That is millions of dollars of
additional exposure that may or may not have the same
connectivity for collecting those dollars in the future. He said
it would be nice to see the math.
9:30:22 AM
SENATOR BEGICH said he would agree if the issue is to make a
more robust portfolio that provides some level of financial
security. He needs evidence of that. He is not convinced, but he
understands. Like Delaware attracted corporations by changing
its laws, maybe this would make Alaska the student loan Delaware
of America. Then there could be profit, but what is the evidence
to back that up before jumping into a perhaps high-risk strategy
that may not have a benefit for Alaskans at all. It has no
Finance Committee because it is a zero fiscal note. As a
consequence, Senate Education may be the only committee that
gets to have this discussion. The committee needs to know what
the policy is.
CHAIR HOLLAND suggested that Ms. Efird could address that in the
future.
SENATOR HUGHES pointed out that the bill has a referral to
Finance.
MS. EFIRD addressed some of the concerns saying the refinance
loan program has a high criteria for borrowers to meet. With
that and some other provisions in the program, there is a lower
possible default rate. She will be happy to provide some data
about why the corporation feels this would be beneficial to
Alaska student borrowers.
9:33:02 AM
SENATOR STEVENS commented that the organization has fixed costs
that have to be spread across borrowers. He suggested the
solution is to expand the reach and bring in more students, but
what about reducing the fixed costs.
SENATOR HUGHES clarified that there is a higher, stricter
criteria to refinance than for a basic loan.
MS. EFIRD answered that is correct. She will provide information
on the interest rates for all of the loan programs.
SENATOR HUGHES asked her to also provide the criteria for the
different loans.
MS. EFIRD answered yes.
SENATOR MICCICHE shared that he added the Finance referral
because he had difficulty understanding that there would be no
fiscal impact. Before he supports moving the bill out of
committee, he wants a greater understanding of that.
9:35:53 AM
MS. EFIRD continued the sectional.
Section 5: Amends AS 14.43.175
• Adds clarifying language that ACPE can offer future
student loan borrowers a loan program with immediate
repayment
MS. EFIRD said such a loan would reduce costs for student
borrowers because interest would not be deferred and
capitalized. Such a loan would not impact current borrowers.
Immediate repayment has been shown to be an option where in-
school student borrowers would start repaying their loans to get
in the habit of making loan payments, helping them to understand
the obligation for the loan, and over the life of the loan
reduces the amount because the interest is not accruing when
they are in school.
MS. EFIRD said the bill has an effective date of July 1, 2021,
the beginning of FY22.
MS. EFIRD said the ACPE did determine that the bill has a zero
fiscal note. It is not anticipated to increase agency operating
costs. All of loan operating costs are funded from receipts of
the Alaska Student Loan Corporation.
9:38:31 AM
SENATOR HUGHES asked if there are any projections of additional
applications and how much additional debt the corporation would
take on in a year's time.
MS. THOMAS replied that the corporation has not projected that.
It is challenging to project how many former Alaskans or
additional borrowers the corporation would get and what amount
of debt they would have. When the corporation originally rolled
out the refinance program several years ago, the corporation set
an amount in the budget for the first year without knowing what
to anticipate. The corporation does have a history of
controlling for an unexpected large number of applications. To
address the discussion about loan limits, Sections 2-4 don't
relate to the refinance loan program. They relate to in-school
loans, the Alaska supplemental education loan. Those are only
available to Alaskan residents or those attending postsecondary
education in Alaska. The current maximum for those loan programs
is for the annual costs that are unmet after grants,
scholarships, and federal aid, and they are insufficient to meet
a large number of student needs on an annual basis. The request
to increase the maximum is not related to the refinance loan
request. It is strictly for the annual loans made to Alaska
residents or students attending postsecondary institutions in
Alaska.
9:41:31 AM
SENATOR BEGICH said this is a good idea given that the cost of
education continually changes, and it gives power to ACPE to
adjust to those changes that are absolutely out of its control.
The state has arbitrary limits that were set years ago. He
appreciates these three sections.
SENATOR MICCICHE said for the analysis of exposure and benefits
of expanding the program, what happens if this administration
actually does forgive student loans. He asked if that would
dramatically affect their interest income. He asked if that has
that been analyzed. He doesn't need an answer now, and perhaps
no one knows how that would work.
CHAIR HOLLAND asked if anyone had a comment on that. It sounds
like a complicated subject.
MS. EFIRD said that the corporation is in conversations about
how any loan forgiveness options may affect the corporation.
That is on their minds.
9:43:33 AM
SENATOR BEGICH said that in the past forgiveness has been
considered part of income that had to be reported. He read that
a bill being considered would remove that stipulation.
SENATOR HUGHES asked regarding the immediate payback, if there
is any research that shows those students are apt to do better
academically and are more apt to graduate.
MS. EFIRD answered that in conversation with the Education
Finance Council and other professional organizations, she has
heard anecdotal reference to what Senator Hughes is talking
about--that it does create that connection between working for
something that a student is paying for. She is not sure about
any specific data, but she will look for that.
MS. EFIRD thanked the committee for allowing the introduction of
bill and thoughtful consideration. To address Senator Stevens
comment, the ACPE over the past five years has reduced its
operating footprint. It is down almost half of its positions
from a few years ago. Everyone is working diligently on
operating costs, doing due diligence to provide the best service
at the lowest cost for Alaskans.
9:46:26 AM
CHAIR HOLLAND held SB 94 in committee.
SB 58-FUNDING FOR CORRESPONDENCE PROGRAMS
9:46:33 AM
CHAIR HOLLAND announced the consideration of SENATE BILL NO. 58
"An Act relating to funding for correspondence programs; and
providing for an effective date."
He asked Commissioner Johnson to introduce the bill.
9:46:52 AM
MICHAEL JOHNSON, Ph.D., Commissioner, Department of Education
and Early Development (DEED), Juneau, Alaska, said Alaska
currently offers a multitude of public education options for
families, including traditional brick and mortar schools,
correspondence programs, and charter, vocational, alternative,
residential schools. Offering this educational variety
recognizes student learning needs, creates ways to diversify,
enhances the vibrancy of communities, and is critical to the
state's economic future. Currently, the state funds students
differently based on how they choose to engage with a public
school. Correspondence students are funded at 90 percent of the
Base Student Allocation (BSA) without going through the formula.
This means that under current law, the district does not receive
the full value of an Average Daily Membership (ADM) for
correspondence students, nor the extra funding that is part of
the ADM multipliers, such as funding for special needs students
and career and technical education (CTE). This school year,
2020-2021, the state saw a 92.3 percent increase in
correspondence students from the previous year, largely due to
the pandemic, but beyond that, over the last ten years, from
FY11 to FY20, correspondence students counts have increased at
an average rate of 3.6 percent every year.
9:49:44 AM
COMMISSIONER JOHNSON said some students will return to their
neighborhood schools, but a significant number may not or may
take a couple of years to do so. More likely, some families will
want to explore hybrid models where students remain connected to
their neighborhood schools and teachers yet have flexibility in
scheduling, calendars, and content.
COMMISSIONER JOHNSON said the bill has three specific benefits.
One is that it provides long-term stability for school
districts. The best way to stabilize the impact of shifting
enrollment that the state has seen this year and will probably
continue is to recognize that the cost of educating a student
remains no matter where a student is enrolled. This conversation
started before the pandemic as students began participating in
online learning and remote learning in the last decade.
Districts asked about how to count a student who took one or
more classes online but also took courses at the local school.
If students participate in a class remotely, is that home school
or regular school for funding. SB 58 moves in the direction of
recognizing all students and the cost of their education.
9:51:14 AM
COMMISSIONER JOHNSON said the second benefit is that it provides
flexibility and funds innovation for educators. The formula uses
multipliers to reflect the cost of education. The typical
correspondence students in the past are different from today.
There is no special ed factor for correspondence students, yet
more and more special needs students participate in
correspondence. There is no factor for vocational ed, which has
a growing need for using distance and remote technology to
expand opportunities for voc-ed. The funding allows educators to
innovate outside of the traditional classroom walls. The third
benefit is flexibility. This bill gives opportunity to school
districts and schools without correspondence programs. It
provides enough funding so that district can develop programs
based on the needs and desires of families, even with only a few
correspondence students. In addition to those benefits, this
provides a pathway for families to remain connected to local
neighborhood schools or districts. It will take a while for
families to sort out how the pandemic has affected their lives
and routines. Families value their local schools and want them
to be funded. This bill gives them the assurance that they can
remain connected to public educators and schools while also
adjusting how they remain connected. It appears that telework
and other changes in societal routines will remain for many
families. That will likely result in families wanting more
options and flexibility in education routines and funding that
supports those opportunities for schools and districts.
9:54:08 AM
SENATOR BEGICH clarified that when the commissioner said there
has been an increase of 3 percent a year in the number of
correspondence students, but that does not mean an increase of 3
percent of the total student population.
COMMISSIONER JOHNSON responded yes. Director Teshner has the
exact numbers. Before this year, about 10 percent of the
students in the state were correspondence students, but that has
been steadily growing.
SENATOR BEGICH asked why the funding was set at 90 percent. He
asked if it was because correspondence schools do not provide
some of the services provided within the schools, such as
counseling services and the ability to work as readily with
special ed students. He asked why that changed, if those were
the reasons.
9:55:56 AM
COMMISSIONER JOHNSON said he not sure what the rationale was. It
used to be 80 percent and then the legislature increased that to
90 percent. In the past a typical correspondence student got the
packet, did the assignments, and put the coursework in the mail.
A typical correspondence student 20 years ago is very different
from today because of advances in technology, advances in
society and the economy. Correspondence programs in the state
are exciting. They offer all those services now and serve
students with all needs, not just students who are high
achievers. Some correspondence schools are serving students who
didn't do well in traditional schools. The correspondence
programs serve those students with counseling and extra academic
support and connections to the local school district. The
conversation to increase funding started several years ago
because correspondence schools are now offering many, if not
all, of the same services as traditional schools.
SENATOR BEGICH said that answer is what he perceived as true.
The commissioner mentioned it will only affect 32 of 54
districts. He is wondering if the other 22 school districts are
mostly rural or semiurban or urban. He asked how the state
addresses those districts so as not to create more inequity.
9:58:47 AM
COMMISSIONER JOHNSON replied that he doesn't have a list of
which districts don't have programs. This incentivizes districts
because any district can have a correspondence program if it
wants. Funding correspondence students at 90 percent of the BSA
without going through the formula makes it financially difficult
for districts to start a program for a few students in a way
that will attract families, especially like the large programs.
This bill provides districts the incentive and opportunity and
resources to develop their own programs and connect with local
families that may be considering the hybrid model of engagement
with local schools. Even if a district had 10 students
initially, it would be enough funding to develop the program and
be innovative and enhance the existing programs.
10:00:16 AM
SENATOR HUGHES said she is aware of current correspondence
programs because Mat-Su Central School, a correspondence
program, is the largest school in the Mat-Su district. Mat-Su
Central shares space with a Legislative Information Office. That
is a busy parking spot with families coming and going. It might
be helpful for the committee to perhaps hear from a school about
different services. She doesn't know if they have a school
nurse, organized field trips, access to libraries, etc. It would
be helpful to understand how correspondence schools have evolved
and what they offer because it is a growing trend. She has heard
from some families who plan to continue with that after the
pandemic because it did work for their children. Other families
are eager to have their back children back in brick-and-mortar
schools. The committee needs to understand what the programs are
offering.
COMMISSIONER JOHNSON responded that Mat-Su Central Principal
John Brown would be fantastic to have in front of the committee.
He has suggested some programs to hear from to the chair. Mat-Su
Central has a library, a study area, counseling, and many other
services in the facility. That is great example of how
correspondence programs have evolved because parents want some
of those expanded opportunities, but they want to remain
connected to public educators in their public schools. Principal
John Brown would be a fantastic person to share that
information.
10:03:17 AM
SENATOR MICCICHE asked whether home school is 1.9 students per
ADM vs. the .9 for correspondence students.
COMMISSIONER JOHNSON answered that sometimes home school is used
and sometimes correspondence, but they are the same thing.
Correspondence or homeschool students are .9 of the BSA. The
terms are used interchangeably and a better term is needed.
SENATOR MICCICHE said he must have misunderstood that they were
double counted.
CHAIR HOLLAND said that is if districts lose 5 percent of their
recruitment and get 75 percent because of hold harmless that
winds up being about 1.6 for the first year. That is what
Senator Micciche may be thinking of.
SENATOR HUGHES said that within a district, during the pandemic,
if a student moves from a brick-and-mortar school and goes to
correspondence, the districts are asking that they get paid as
though the child was in a brick-and-mortar school and also get
the .9, so it is the 1 plus the .9.
CHAIR HOLLAND commented that with hold harmless, attendance has
to drop five percent for that to kick in.
10:05:40 AM
HIEDI TESHNER, Director, Finance and Support Services,
Department of Education and Early Development (DEED), Juneau,
Alaska, presented the sectional analysis:
Section 1 amends AS 14.17.410(b)(1)(C), the public school
funding, by moving the correspondence student ADM up in the
foundation formula after the district cost factors and
before the special needs and technical instruction funding
multipliers. Section 1 further amends AS 14.17.410(b)(1)(D)
by removing the correspondence student calculation from the
end of the formula adjustments when determining basic need.
Section 2 amends AS 14.17.430, the state funding for
correspondence study, by removing the 90 percent factor for
a correspondence student and clarifying that the new
funding allocation for a correspondence program is
calculated by using the ADM report as recorded under AS
14.17.410(b)(1)(C), essentially counting a correspondence
student as a full ADM.
Section 3 establishes the effective date of July 1, 2021,
the start of FY2022.
10:07:45 AM
MS. TESHNER said the committee has three documents. The first
document is labeled Foundation Funding Formula. The first page
shows the steps of the current funding formula as set out in
statute. The page shows the factors and the statewide totals for
projected FY22 for each of the elements in the formula. The
correspondence ADM is applied at the end of the formula, right
before determining the district-adjusted ADM. As the
commissioner noted, based on current law a district does not
receive the full value of a correspondence student or the extra
funding formula factors for special needs and vocational
education.
10:09:02 AM
MS. TESHNER said page two of that documents shows the change
under SB 58. The green box shows where correspondence would lie
in the formula. There are two changes to correspondence under
this bill. The first is that a correspondence student will be
one full ADM, not 90 percent, and the ADM for correspondence
students would be included in the formula after the district
cost factors and before the special education, vocation
education, and special education intensives factors are applied.
MS. TESHNER said that through SB 58 more financial resources
would be available to school districts to help cover the cost of
provide special ed services to correspondence students and would
provide more resources so that correspondence students would
have a larger allotment to pursue career and technical education
opportunities. Since the proposed change would provide more
financial resources to districts, it could be assumed that the
allotment provided to students for their education should go up,
affording students more educational options and opportunities.
10:10:54 AM
SENATOR HUGHES observed that the document shows a difference of
$35 million. She asked if that is the estimated cost to the
state for FY22 if SB 58 were to pass.
MS. TESHNER answered yes; it is about a $35 million cost to the
state under the proposed legislation.
10:11:25 AM
SENATOR BEGICH commented that this represents a $35 million
state investment in enhanced correspondence to meet the needs of
students. He noted that the committee has had a number of
conversations about SB 42 and SB 8, bills that enhance reading
and prekindergarten. Those bills at best, over time, would offer
an additional $17 million to the formula funding. If the state
is going to invest $35 million, and he is supportive of full
count for correspondence programs, the state should make sure it
gets a return on its investment. If the state is going to do
this level of investment, then it absolutely should do a level
of investment in prekindergarten and the reading opportunities
to ensure that the state is not just throwing $35 million out
into the wind. It is important to make sure the $35 million is
an investment in education because it has been backed up by a
strong reading program and a strong prekindergarten program. He
asked if his numbers are right, and if she believes that will
make a difference in educating children in Alaska.
10:13:20 AM
MS. TESHNER stated that those two numbers are correct; $35
million under SB 58 and $17.1 million under SB 42 or SB 8.
COMMISSIONER JOHNSON said that regarding a return on money
invested, the evidence is that money invested in correspondence
programs have a great return. Those students compare well to
students in brick-and-mortar schools. The administration has a
high degree of confidence that the return will be great and the
state will see innovation. The pandemic has had an impact and
will continue to have an impact. The bills the committee are
considering, reading bills, virtual education, this bill, all
can work well in tandem to shape the public education system
coming out of the pandemic and into the future in a way that
meets families' needs.
10:14:52 AM
SENATOR HUGHES asked if there is any chance of using some
federal COVID funds for the $35 million if this were to pass,
given that correspondence picked up during the pandemic and it
is not totally eradicated.
COMMISSIONER JOHNSON said that federal money comes in different
buckets. The largest bucket goes directly to school districts
with wide discretion about how to use the money. They could
choose to use it that way. The department cannot direct them
about how to use the funds. Other buckets include the set aside
that goes to the department. He looks forward to working with
the committee on how to move the education bills forward and
possibly using those funds with other projects the department is
working on. That is a yes, it is possible, but it is a
conversation to have with the committee.
CHAIR HOLLAND asked if DEED cannot direct the funds, is there
any control over the districts to ensure this money would go to
correspondence schools.
10:17:04 AM
COMMISSIONER JOHNSON replied that funding amount is based on
student counts and locally elected school boards allocate that.
A brick-and-mortar school, based on its student count, may
generate more funding than it spends and the school board
decides how to allocate that funding around the district. The
school board may choose to have a more expensive program at one
school and also balance out the money between elementary and
high school. There is not a way to say the money could only go
to the school that generates it based on the count, but that is
usually how school districts allocate the money.
10:18:28 AM
SENATOR BEGICH said that is a wonderful clarification for
Senator Hughes; the bill in the U.S. Senate today has a
substantial amount of money for summer and other remedial
programming for education directly, billions of dollars, and
thanks to the state's Senate delegation, there is an increased
amount of flexibility for small-population states, including a
substantial amount of money for broadband and other issue like
that. There should be a lot more resources coming into the
state. For the last few years, the legislature has provided
money outside of the BSA, $20 or $30 million or even more to
schools. These various concepts, whether correspondence schools
or prekindergarten or the reading program, actually target the
money instead of just tossing it out there. A comprehensive
package is here, combined with those federal resources as well,
that could be useful for all of them.
COMMISSIONER JOHNSON said that he will work with the committee
on funding sources.
10:20:08 AM
CHAIR HOLLAND held SB 58 in committee.
10:20:17 AM
There being no further business to come before the committee,
Chair Holland adjourned the Senate Education Standing Committee
meeting at 10:20 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB58 - Senate Education Hearing Request 1.29.21.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 58 |
| SB94 - Senate Education Hearing Request 03.01.21.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 94 |
| SB 94 Support Letter from UA State Director Hutchison.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 94 |
| SB 94 3.5.21 (S) EDC Presentation.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 94 |
| SB 94 - Charter College - Letter of Support 3.2.21.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 94 |
| SB58 - Correspondence Programs as of 12.2020.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 58 |
| SB58 CorrespondenceADM&CostHistoryFY12-FY22Proj - Legal Size.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 58 |
| SB58 FY2022 Foundation Funding Program.pdf |
SEDC 3/5/2021 9:00:00 AM |
SB 58 |