SJR 2-CONST. AM: G.O. BONDS FOR STUDENT LOANS  2:27:11 PM CHAIR LEDOUX announced that the next order of business would be SENATE JOINT RESOLUTION NO. 2, Proposing an amendment to the Constitution of the State of Alaska relating to contracting state debt for postsecondary student loans. 2:27:28 PM KRISTEN PRATT, Staff, Senator Anna MacKinnon, Alaska State Legislature, said that SJR 2 is a constitutional amendment permitting the issuance of general obligation bonds for the purpose of funding postsecondary student loans by amending the Constitution of the State of Alaska Article IX, Section 8. Currently Article IX, Section 8, allows for general obligation bonding for capital improvements as well as housing loans for veterans. The intent of this legislation, she explained, is for students to have better access to lower cost loans, essentially the intent is to lower interest rates on student loans. It would also give the Alaska Student Loan Corporation (ASLC) more flexibility with its underwriting criteria. 2:29:12 PM DIANE BARRANS, Executive Director, Alaska Commission on Postsecondary Education (ACPE), Alaska Student Loan Corporation (ASLC), Executive Officer, advised that the sponsor is focused on making lower cost financing available to both students currently going through the pipeline, but also to holders or borrowers of education loans who might have those loans at higher interest rates and are interested in refinancing them at a lower rate. In the event the people of Alaska are presented with this opportunity to decide on the ballot to amend the Alaska State Constitution, and vote in the affirmative, her office would be able to enter the market with the state's credit behind these loans. Therefore, not only would Alaskans enjoy a lower rate in the market, and in the event the state retains its AAA rating, she estimated there would be a full 1.1 percent interest rate advantage in the market. In the event that rate drops to AA rating, Alaskans would still maintain a 95 basis points advantage in the market. Therefore, there is a material benefit to students increasingly looking to alternatives to finance their education. She noted that the state is in an era where, with the rising cost of education within the state and outside the state, the need for this type of assistance and support from the state is higher than ever. The beauty of this structure is that her office could leverage the state's credit rating without having to tap the general fund because the loans would be made with the underwriting criteria that would make them fully capable of repaying the bonds as they become due. They would be able to sustain themselves without any general fund draws and the corporation would design the related programs accordingly, she explained. CHAIR LEDOUX opened public testimony. After ascertaining no one wished to testify, closed public testimony. 2:32:37 PM CHAIR LEDOUX advised that she is holding the bill. [SJR 2 was held over.]