CSHB 506(FIN): "An Act relating to student loans; to sanctions for defaulting on a student loan, including denial of a state occupational license; and providing for an effective date."
00CS FOR HOUSE BILL NO. 506(FIN) 01 "An Act relating to student loans; to sanctions for defaulting on a student loan, 02 including denial of a state occupational license; and providing for an effective 03 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 borrower and the Department of Commerce and Economic Development have 11 received notice from the Alaska Commission on Postsecondary Education that the 12 licensee is in default on a student loan provided to the licensee. This action may be 13 taken no sooner than 60 days after the Alaska Commission on Postsecondary 14 Education has notified the borrower of the default status of the loan as provided under
01 AS 14.43.120(i). Denial of renewal of a license shall continue until the Department 02 of Commerce and Economic Development receives notice from the Alaska 03 Commission on Postsecondary Education that the licensee is no longer in default on 04 the student loan. 05 (b) The Department of Commerce and Economic Development shall provide 06 the applicable licensing board, if any, a copy of a notice received under (a) of this 07 section. 08 * Sec. 2. AS 14.43.120(f) is repealed and reenacted to read: 09 (f) Interest on a loan made under AS 14.43.090 - 14.43.160 is equal to the 10 interest rate 11 (1) paid in each year on bonds issued by the Alaska Student Loan 12 Corporation under AS 14.42.220; and 13 (2) necessary to pay a percentage of the administrative cost of the 14 student loan program that is represented by the loan, but the amount under this 15 paragraph may not exceed three percent of the amount determined under (1) of this 16 subsection; in determining a rate of interest under this paragraph, the commission 17 shall use a method that ensures that the rate of interest is as low as possible without 18 precluding the ability of the commission to administer loans made under AS 14.43.090 19 - 14.43.160. 20 * Sec. 3. AS 14.43.120(i) is amended to read: 21 (i) If a loan is in default, the commission 22 (1) shall notify the borrower that, if the borrower has an occupational 23 license issued under AS 08, the license may not be renewed under AS 08.02.025 24 and that repayment of the remaining balance is accelerated and due by sending the 25 borrower a notice by registered or certified mail; 26 (2) may take the borrower's [. THE] permanent fund dividend [OF 27 A BORROWER MAY BE TAKEN] under AS 43.23.065(b)(3) to satisfy the balance 28 due on the defaulted loan; and 29 (3) shall provide notice of the default to the Department of 30 Commerce and Economic Development, if the loan recipient is licensed under 31 AS 08.
01 * Sec. 4. AS 14.43 is amended by adding a new section to read: 02 Sec. 14.43.122. CONSOLIDATION OF LOANS. (a) The commission may 03 offer 04 (1) a borrower who has received more than one loan under this chapter 05 the option of consolidating the multiple loans into a single loan; or 06 (2) to consolidate loans made to married borrowers if the married 07 borrowers agree to be jointly and severally liable for repayment of the consolidated 08 loan, regardless of the borrowers' future marital status or the death of one of the 09 borrowers. 10 (b) Notwithstanding AS 14.43.120(f), if loans are consolidated under (a) of this 11 section, the consolidated loan shall bear annual interest equal to the weighted average 12 of the interest rates on the loans being consolidated, rounded to the nearest 1/10 of a 13 percent. 14 * Sec. 5. AS 14.43.125(a) is amended to read: 15 (a) A person may apply for and obtain a scholarship loan if the person 16 (1) is 17 (A) enrolled as a full-time student in a career education, 18 associate, baccalaureate, or graduate degree program; 19 (B) enrolled as a half-time student in a career education, 20 associate, baccalaureate, or graduate degree program in 21 (i) the state; or 22 (ii) a career education, associate, baccalaureate, or 23 graduate degree program and is physically present in the state while 24 attending the career education, associate, baccalaureate, or graduate 25 degree program; or 26 (C) a graduate of a high school or the equivalent, or scheduled 27 for graduation from a high school within six months, with sufficient credits to 28 be admitted to a career education program or to an accredited college or 29 university; 30 (2) is not delinquent or in default on a previously awarded scholarship 31 loan; and
01 (3) is a resident of the state at the time of application for the loan; for 02 purposes of this section, a person qualifies as a resident of the state if at the time of 03 application for the loan the person 04 (A) has been physically present in the state for at least two 05 years immediately before the time of application for the loan; 06 (B) is dependent on a parent or guardian for care, the parent or 07 guardian has been present in the state for at least two years immediately before 08 the time of application for the loan and the person has been present in the state 09 for at least one year of the immediately preceding five years except that the 10 commission may by a two-thirds vote, acting upon a written appeal by the 11 person, grant an exemption to the requirement that the person has been present 12 in the state for one year of the immediately preceding five years; 13 (C) has been physically present in the state, or is a dependent 14 of a parent or guardian who has been physically present in the state, for at least 15 two years immediately before the applicant was absent from the state and the 16 absence is due solely to 17 (i) serving an initial period of up to six years on active 18 duty as a member of the armed forces of the United States; 19 (ii) serving for up to three years as a full-time volunteer 20 under the Peace Corps Act; 21 (iii) serving for up to three years as a full-time volunteer 22 under the Domestic Volunteer Service Act of 1973; 23 (iv) required medical care for the applicant or the 24 applicant's immediate family; 25 (v) being a person who otherwise qualifies as a resident 26 and is accompanying a spouse who qualifies as a resident under (i) - 27 (iv) of this paragraph; or 28 (D) has been physically present in the state, or is a dependent 29 of a parent or guardian who has been physically present in the state, for at least 30 two years immediately before the applicant or the parent or guardian was 31 absent from the state and the absence is due solely to
01 (i) participating in a foreign exchange student program 02 recognized by the commission; 03 (ii) attending a school as a full-time student; 04 (iii) full-time employment by the state; 05 (iv) being a member of or employed full-time by the 06 state's congressional delegation; 07 (v) being a person who otherwise qualifies as a resident 08 and is accompanying a spouse who qualifies as a resident under (i) - 09 (iv) of this paragraph; [AND] 10 (4) does not have a past due child support obligation established by 11 court order or by the child support enforcement division under AS 25.27.160 - 12 25.27.220 at the time of application; and 13 (5) has not, within the previous five years, had a scholarship loan 14 discharged or written off by the commission for any reason. 15 * Sec. 6. AS 14.43 is amended by adding a new section to read: 16 Sec. 14.43.150. ORDER TO ASSIGN WAGES FOR DEFAULTED LOAN. 17 (a) In a court proceeding regarding a defaulted loan under this chapter in which the 18 court has entered judgment in favor of the commission, the court may, on its own 19 motion or motion of the commission, after notice and an opportunity for hearing, order 20 the loan recipient to assign to the commission that portion of salary or wages due the 21 loan recipient currently and in the future in an amount sufficient to pay the amount 22 ordered by the court to be repaid to the commission. 23 (b) The order of assignment is binding upon an employer upon service of a 24 copy of the order upon the employer and until further order of the court or until the 25 employment of the obligee is terminated. The employer may, for each payment made 26 under the order, deduct $1 from other wages or salary owed to the employee. 27 (c) An employer may not terminate an employee's employment because wages 28 of the employee are subject to an order under this section. 29 * Sec. 7. AS 14.43.740(b) is amended to read: 30 (b) The provisions of AS 14.43.120(p) apply to a loan made under 31 AS 14.43.710 - 14.43.790 with respect to the borrower [FAMILY MEMBER ON
01 WHOSE BEHALF A LOAN IS MADE]. 02 * Sec. 8. AS 14.43.750(a) is amended to read: 03 (a) A person may apply for and obtain a family education loan on behalf of 04 a family member if 05 (1) the borrower is a resident of the state at the time of application for 06 the loan; for purposes of this paragraph, a borrower qualifies as a resident of the state 07 if the borrower has been physically present in the state for at least one year [TWO 08 YEARS] immediately before the time of application for the loan; 09 (2) the family member [HAS BEEN CLAIMED AS A DEPENDENT 10 FOR FEDERAL TAX PURPOSES BY THE BORROWER FOR THE TAX YEAR 11 IMMEDIATELY BEFORE THE TIME OF APPLICATION AND] 12 (A) is enrolled as a full-time student in a career education, 13 associate, baccalaureate, or graduate degree program; or 14 (B) is a graduate of a high school or the equivalent, or 15 scheduled for graduation from a high school within six months, with sufficient 16 credits to be admitted to a career education program or to an accredited college 17 or university; and 18 (3) neither the borrower nor the family member is delinquent or in 19 default on a previously awarded student loan from the state. 20 * Sec. 9. Sections 5, 6, 7, and 8 of this Act take effect July 1, 1994. 21 * Sec. 10. Except as provided under sec. 9 of this Act, this Act takes effect July 1, 1995.