HB 506: "An Act relating to student loans; to sanctions for defaulting on a student loan, including denial of a state occupational license or disbursement of state money; and providing for an effective date."
00HOUSE BILL NO. 506 01 "An Act relating to student loans; to sanctions for defaulting on a student loan, 02 including denial of a state occupational license or disbursement of state money; 03 and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 08.02 is amended by adding a new section to read: 06 Sec. 08.02.025. COMPLIANCE WITH STUDENT LOAN REQUIREMENTS. 07 (a) A person licensed under this title shall comply with the student loan repayment 08 provisions under AS 14.43 that are applicable to the person. Notwithstanding another 09 provision of law, a license issued to a person under this title may not be renewed if 10 the Department of Commerce and Economic Development has received notice from 11 the Alaska Commission on Postsecondary Education that the licensee is in default on 12 a student loan provided to the licensee. Denial of renewal of a license shall continue 13 until the Department of Commerce and Economic Development receives notice from 14 the Alaska Commission on Postsecondary Education that the licensee is no longer in
01 default on the student loan. 02 (b) The Department of Commerce and Economic Development shall provide 03 the applicable licensing board, if any, a copy of a notice received under (a) of this 04 section. 05 * Sec. 2. AS 14.43.120(f) is repealed and reenacted to read: 06 (f) Interest on a loan made under AS 14.43.090 - 14.43.160 is equal to the 07 interest rate 08 (1) paid in each year on bonds issued by the Alaska Student Loan 09 Corporation under AS 14.42.220; and 10 (2) necessary to pay a percentage of the administrative cost of the 11 student loan program that is represented by the loan; in determining a rate of interest 12 under this paragraph, the commission shall use a method that ensures that the rate of 13 interest is as low as possible without precluding the ability of the commission to 14 administer loans made under AS 14.43.090 - 14.43.160. 15 * Sec. 3. AS 14.43.120(i) is amended to read: 16 (i) If a loan is in default, the commission 17 (1) shall notify the borrower that repayment of the remaining balance 18 is accelerated and due by sending the borrower a notice by registered or certified mail; 19 (2) may take the borrower's [. THE] permanent fund dividend [OF 20 A BORROWER MAY BE TAKEN] under AS 43.23.065(b)(3) to satisfy the balance 21 due on the defaulted loan; 22 (3) shall provide notice of the default to the Department of 23 Administration as required under AS 37.10.010(b); and 24 (4) shall provide notice of the default to the Department of 25 Commerce and Economic Development, if the loan recipient is licensed under 26 AS 08. 27 * Sec. 4. AS 14.43 is amended by adding a new section to read: 28 Sec. 14.43.122. CONSOLIDATION OF LOANS. (a) The commission may 29 offer 30 (1) a borrower who has received more than one loan under this chapter 31 the option of consolidating the multiple loans into a single loan; or
01 (2) to consolidate loans made to married borrowers if the married 02 borrowers agree to be jointly and severally liable for repayment of the consolidated 03 loan, regardless of the borrowers' future marital status or the death of one of the 04 borrowers. 05 (b) Notwithstanding AS 14.43.120(f), if loans are consolidated under (a) of this 06 section, the consolidated loan shall bear annual interest equal to the weighted average 07 of the interest rates on the loans being consolidated, rounded to the nearest whole 08 percent. 09 * Sec. 5. AS 14.43.125(a) is amended to read: 10 (a) A person may apply for and obtain a scholarship loan if the person 11 (1) is 12 (A) enrolled as a full-time student in a career education, 13 associate, baccalaureate, or graduate degree program; 14 (B) enrolled as a half-time student in a career education, 15 associate, baccalaureate, or graduate degree program in 16 (i) the state; or 17 (ii) a career education, associate, baccalaureate, or 18 graduate degree program and is physically present in the state while 19 attending the career education, associate, baccalaureate, or graduate 20 degree program; or 21 (C) a graduate of a high school or the equivalent, or scheduled 22 for graduation from a high school within six months, with sufficient credits to 23 be admitted to a career education program or to an accredited college or 24 university; 25 (2) is not delinquent or in default on a previously awarded scholarship 26 loan; and 27 (3) is a resident of the state at the time of application for the loan; for 28 purposes of this section, a person qualifies as a resident of the state if at the time of 29 application for the loan the person 30 (A) has been physically present in the state for at least two 31 years immediately before the time of application for the loan;
01 (B) is dependent on a parent or guardian for care, the parent or 02 guardian has been present in the state for at least two years immediately before 03 the time of application for the loan and the person has been present in the state 04 for at least one year of the immediately preceding five years except that the 05 commission may by a two-thirds vote, acting upon a written appeal by the 06 person, grant an exemption to the requirement that the person has been present 07 in the state for one year of the immediately preceding five years; 08 (C) has been physically present in the state, or is a dependent 09 of a parent or guardian who has been physically present in the state, for at least 10 two years immediately before the applicant was absent from the state and the 11 absence is due solely to 12 (i) serving an initial period of up to six years on active 13 duty as a member of the armed forces of the United States; 14 (ii) serving for up to three years as a full-time volunteer 15 under the Peace Corps Act; 16 (iii) serving for up to three years as a full-time volunteer 17 under the Domestic Volunteer Service Act of 1973; 18 (iv) required medical care for the applicant or the 19 applicant's immediate family; 20 (v) being a person who otherwise qualifies as a resident 21 and is accompanying a spouse who qualifies as a resident under (i) - 22 (iv) of this paragraph; or 23 (D) has been physically present in the state, or is a dependent 24 of a parent or guardian who has been physically present in the state, for at least 25 two years immediately before the applicant or the parent or guardian was 26 absent from the state and the absence is due solely to 27 (i) participating in a foreign exchange student program 28 recognized by the commission; 29 (ii) attending a school as a full-time student; 30 (iii) full-time employment by the state; 31 (iv) being a member of or employed full-time by the
01 state's congressional delegation; 02 (v) being a person who otherwise qualifies as a resident 03 and is accompanying a spouse who qualifies as a resident under (i) - 04 (iv) of this paragraph; [AND] 05 (4) does not have a past due child support obligation established by 06 court order or by the child support enforcement division under AS 25.27.160 - 07 25.27.220 at the time of application; and 08 (5) has not, within the previous five years, had a scholarship loan 09 discharged or written off by the commission for any reason. 10 * Sec. 6. AS 14.43 is amended by adding a new section to read: 11 Sec. 14.43.150. ORDER TO ASSIGN WAGES FOR DEFAULTED LOAN. 12 (a) In a court proceeding regarding a defaulted loan under this chapter in which the 13 court has entered judgment in favor of the commission, the court may, on its own 14 motion or motion of the commission, after notice and an opportunity for hearing, order 15 the loan recipient to assign to the commission that portion of salary or wages due the 16 loan recipient currently and in the future in an amount sufficient to pay the amount 17 ordered by the court to be repaid to the commission. 18 (b) The order of assignment is binding upon an employer upon service of a 19 copy of the order upon the employer and until further order of the court. The 20 employer may, for each payment made under the order, deduct $1 from other wages 21 or salary owed to the employee. 22 (c) An assignment of wages made under court order has priority as against an 23 attachment, execution, or other assignment, except for an assignment of child support 24 under AS 25.27 or as otherwise ordered by the court. 25 (d) An employer may not terminate an employee's employment because wages 26 of the employee are subject to an order under this section. 27 * Sec. 7. AS 14.43.740(b) is amended to read: 28 (b) The provisions of AS 14.43.120(p) apply to a loan made under 29 AS 14.43.710 - 14.43.790 with respect to the borrower [FAMILY MEMBER ON 30 WHOSE BEHALF A LOAN IS MADE]. 31 * Sec. 8. AS 14.43.750(a) is amended to read:
01 (a) A person may apply for and obtain a family education loan on behalf of 02 a family member if 03 (1) the borrower is a resident of the state at the time of application for 04 the loan; for purposes of this paragraph, a borrower qualifies as a resident of the state 05 if the borrower has been physically present in the state for at least one year [TWO 06 YEARS] immediately before the time of application for the loan; 07 (2) the family member [HAS BEEN CLAIMED AS A DEPENDENT 08 FOR FEDERAL TAX PURPOSES BY THE BORROWER FOR THE TAX YEAR 09 IMMEDIATELY BEFORE THE TIME OF APPLICATION AND] 10 (A) is enrolled as a full-time student in a career education, 11 associate, baccalaureate, or graduate degree program; or 12 (B) is a graduate of a high school or the equivalent, or 13 scheduled for graduation from a high school within six months, with sufficient 14 credits to be admitted to a career education program or to an accredited college 15 or university; and 16 (3) neither the borrower nor the family member is delinquent or in 17 default on a previously awarded student loan from the state. 18 * Sec. 9. AS 37.10.010 is amended to read: 19 Sec. 37.10.010. DISBURSEMENTS. Except as provided under (b) of this 20 section, the [THE] Department of Administration shall 21 (1) disburse money only upon vouchers certified by the department, 22 establishment, or agency concerned, or an officer or employee of it authorized in 23 writing to certify the vouchers; 24 (2) make an examination of vouchers necessary to ascertain whether 25 they are in proper form, certified and approved, computed on the basis of the facts 26 certified; and 27 (3) be held accountable accordingly. 28 * Sec. 10. AS 37.10.010 is amended by adding a new subsection to read: 29 (b) The Department of Administration may not disburse money to a person 30 under (a) of this section if the department has received notice from the Alaska 31 Commission on Postsecondary Education that the person is in default on a student loan
01 under AS 14.43. The prohibition against disbursement required under this subsection 02 shall remain effective until the Department of Administration receives notice from the 03 Alaska Commission on Postsecondary Education that the person is no longer in default 04 on the student loan. 05 * Sec. 11. Sections 5, 6, 7, and 8 of this Act take effect July 1, 1994. 06 * Sec. 12. Except as provided under sec. 11 of this Act, this Act takes effect July 1, 1995.