00 SENATE BILL NO. 336 01 "An Act relating to student loans and to sanctions for defaulting on a student 02 loan; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 14.43.120(f) is repealed and reenacted to read: 05  (f) Interest on a loan made under AS 14.43.090 - 14.43.160 is equal to the 06 interest rate 07  (1) paid in each year on bonds issued by the Alaska Student Loan 08 Corporation under AS 14.42.220; and 09  (2) necessary to pay a percentage of the administrative cost of the 10 student loan program that is represented by the loan; in determining a rate of interest 11 under this paragraph, the commission shall use a method that ensures that the rate of 12 interest is as low as possible without precluding the ability of the commission to 13 administer loans made under AS 14.43.090 - 14.43.160. 14 * Sec. 2. AS 14.43 is amended by adding a new section to read: 01  Sec. 14.43.122. CONSOLIDATION OF LOANS. (a) The commission may 02 offer 03  (1) a borrower who has received more than one loan under this chapter 04 the option of consolidating the multiple loans into a single loan; or 05  (2) to consolidate loans made to married borrowers if the married 06 borrowers agree to be jointly and severally liable for repayment of the consolidated 07 loan, regardless of the borrowers' future marital status or the death of one of the 08 borrowers. 09  (b) Notwithstanding AS 14.43.120(f), if loans are consolidated under (a) of this 10 section, the consolidated loan shall bear annual interest equal to the weighted average 11 of the interest rates on the loans being consolidated, rounded to the nearest whole 12 percent. 13 * Sec. 3. AS 14.43.125(a) is amended to read: 14  (a) A person may apply for and obtain a scholarship loan if the person 15  (1) is 16  (A) enrolled as a full-time student in a career education, 17 associate, baccalaureate, or graduate degree program; 18  (B) enrolled as a half-time student in a career education, 19 associate, baccalaureate, or graduate degree program in 20  (i) the state; or 21  (ii) a career education, associate, baccalaureate, or 22 graduate degree program and is physically present in the state while 23 attending the career education, associate, baccalaureate, or graduate 24 degree program; or 25  (C) a graduate of a high school or the equivalent, or scheduled 26 for graduation from a high school within six months, with sufficient credits to 27 be admitted to a career education program or to an accredited college or 28 university; 29  (2) is not delinquent or in default on a previously awarded scholarship 30 loan; and 31  (3) is a resident of the state at the time of application for the loan; for 01 purposes of this section, a person qualifies as a resident of the state if at the time of 02 application for the loan the person 03  (A) has been physically present in the state for at least two 04 years immediately before the time of application for the loan; 05  (B) is dependent on a parent or guardian for care, the parent or 06 guardian has been present in the state for at least two years immediately before 07 the time of application for the loan and the person has been present in the state 08 for at least one year of the immediately preceding five years except that the 09 commission may by a two-thirds vote, acting upon a written appeal by the 10 person, grant an exemption to the requirement that the person has been present 11 in the state for one year of the immediately preceding five years; 12  (C) has been physically present in the state, or is a dependent 13 of a parent or guardian who has been physically present in the state, for at least 14 two years immediately before the applicant was absent from the state and the 15 absence is due solely to 16  (i) serving an initial period of up to six years on active 17 duty as a member of the armed forces of the United States; 18  (ii) serving for up to three years as a full-time volunteer 19 under the Peace Corps Act; 20  (iii) serving for up to three years as a full-time volunteer 21 under the Domestic Volunteer Service Act of 1973; 22  (iv) required medical care for the applicant or the 23 applicant's immediate family; 24  (v) being a person who otherwise qualifies as a resident 25 and is accompanying a spouse who qualifies as a resident under (i) - 26 (iv) of this paragraph; or 27  (D) has been physically present in the state, or is a dependent 28 of a parent or guardian who has been physically present in the state, for at least 29 two years immediately before the applicant or the parent or guardian was 30 absent from the state and the absence is due solely to 31  (i) participating in a foreign exchange student program 01 recognized by the commission; 02  (ii) attending a school as a full-time student; 03  (iii) full-time employment by the state; 04  (iv) being a member of or employed full-time by the 05 state's congressional delegation; 06  (v) being a person who otherwise qualifies as a resident 07 and is accompanying a spouse who qualifies as a resident under (i) - 08 (iv) of this paragraph; [AND] 09  (4) does not have a past due child support obligation established by 10 court order or by the child support enforcement division under AS 25.27.160 - 11 25.27.220 at the time of application; and 12  (5) has not, within the previous five years, had a scholarship loan 13 discharged or written off by the commission for any reason. 14 * Sec. 4. AS 14.43 is amended by adding a new section to read: 15  Sec. 14.43.150. ORDER TO ASSIGN WAGES FOR DEFAULTED LOAN. 16 (a) In a court proceeding regarding a defaulted loan under this chapter in which the 17 court has entered judgment in favor of the commission, the court may, on its own 18 motion or motion of the commission, after notice and an opportunity for hearing, order 19 the loan recipient to assign to the commission that portion of salary or wages due the 20 loan recipient currently and in the future in an amount sufficient to pay the amount 21 ordered by the court to be repaid to the commission. 22  (b) The order of assignment is binding upon an employer upon service of a 23 copy of the order upon the employer and until further order of the court. The 24 employer may, for each payment made under the order, deduct $1 from other wages 25 or salary owed to the employee. 26  (c) An assignment of wages made under court order has priority as against an 27 attachment, execution, or other assignment, except for an assignment of child support 28 under AS 25.27 or as otherwise ordered by the court. 29  (d) An employer may not terminate an employee's employment because wages 30 of the employee are subject to an order under this section. 31 * Sec. 5. AS 14.43.740(b) is amended to read: 01  (b) The provisions of AS 14.43.120(p) apply to a loan made under 02 AS 14.43.710 - 14.43.790 with respect to the borrower [FAMILY MEMBER ON 03 WHOSE BEHALF A LOAN IS MADE]. 04 * Sec. 6. AS 14.43.750(a) is amended to read: 05  (a) A person may apply for and obtain a family education loan on behalf of 06 a family member if 07  (1) the borrower is a resident of the state at the time of application for 08 the loan; for purposes of this paragraph, a borrower qualifies as a resident of the state 09 if the borrower has been physically present in the state for at least one year [TWO 10 YEARS] immediately before the time of application for the loan; 11  (2) the family member [HAS BEEN CLAIMED AS A DEPENDENT 12 FOR FEDERAL TAX PURPOSES BY THE BORROWER FOR THE TAX YEAR 13 IMMEDIATELY BEFORE THE TIME OF APPLICATION AND] 14  (A) is enrolled as a full-time student in a career education, 15 associate, baccalaureate, or graduate degree program; or 16  (B) is a graduate of a high school or the equivalent, or 17 scheduled for graduation from a high school within six months, with sufficient 18 credits to be admitted to a career education program or to an accredited college 19 or university; and 20  (3) neither the borrower nor the family member is delinquent or in 21 default on a previously awarded student loan from the state. 22 * Sec. 7. Sections 3, 4, 5, and 6 of this Act take effect July 1, 1994. 23 * Sec. 8. Except as provided under sec. 7 of this Act, this Act takes effect July 1, 1995.