HCR 24: Relating to student loan default rates at vocational education schools.
00HOUSE CONCURRENT RESOLUTION NO. 24 01 Relating to student loan default rates at vocational education schools. 02 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 WHEREAS private vocational education is an integral part of Alaska's education 04 system; and 05 WHEREAS private vocational education schools in the state account for 21.96 percent, 06 state funded public schools, universities, and colleges account for 54.42 percent, and schools, 07 universities, and colleges outside the state account for 23.62 percent of the total Alaska 08 Student Loan Program loan dollars in default; and 09 WHEREAS the statutory authority for promulgating 20 AAC 15.925 (Program and 10 Institutional Default Rates) was enacted by the legislature in 1987; and 11 WHEREAS the Alaska Commission on Postsecondary Education did not promulgate 12 20 AAC 15.925 (Program and Institutional Default Rates) until November 1995, eight years 13 after the legislature authorized the regulation; and 14 WHEREAS 20 AAC 15.925 (Program and Institutional Default Rates) applies only
01 to private vocational education schools; and 02 WHEREAS the Alaska Commission on Postsecondary Education has no authority to 03 conduct credit checks on potential borrowers; and 04 WHEREAS The Alaska Student Loan Program has changed dramatically from 1987 05 to 1995; and 06 WHEREAS 20 AAC 15.925 (Program and Institutional Default Rates) does not take 07 into account new owners of private vocational education schools who have a substantially 08 lower default rate than the schools' previous owners and the regulation calculates the schools' 09 average default rate over the life of the school; and 10 WHEREAS 20 AAC 15.925 (Program and Institutional Default Rates) does not give 11 private vocational education schools a grace period to bring down default rates, and the 12 regulation immediately prohibits a school whose default rate is greater than 1.5 times the 13 average default rate from participating in the Alaska Student Loan Program; and 14 WHEREAS 20 AAC 15.925 (Program and Institutional Default Rates) does not 15 provide a mechanism for a private vocational education school to reenter the Alaska Student 16 Loan Program once the school has been prohibited from participating in the program; and 17 WHEREAS the executive director of the Alaska Commission on Postsecondary 18 Education has stated in writing that the reason the regulation was promulgated was at the 19 direction of the legislature in 1995; further, in testimony before the House Labor and 20 Commerce Committee, the executive director's assistant said the direction from the legislature 21 for promulgating this regulation came from a letter of intent attached to legislation that did 22 not pass the legislature; and 23 WHEREAS the Alaska Commission on Postsecondary Education has had no 24 systematic loan default management program; and 25 WHEREAS solving the default rate problem of the Alaska Student Loan Program will 26 require examination of all the loans of the program and not just those loans made to 27 vocational education students; and 28 WHEREAS 20 AAC 15.925 (Program and Institutional Default Rates) is unfair to the 29 private vocational education students in the state; and 30 WHEREAS ameliorating the Alaska Student Loan Program default rate would be 31 assisted by soliciting and utilizing the knowledge and expertise of those who are actively
01 involved in the state's private vocational school industry; and 02 WHEREAS the private vocational education schools have expressed willingness to 03 cooperate fully with the commission to lower default rates; and 04 WHEREAS immediate implementation of 20 AAC 15.925 (Program and Institutional 05 Default Rates) will cause irrevocable harm to private vocational education in the state and is 06 not in the best interests of the students, the schools, or the state; 07 BE IT RESOLVED that the Governor is respectfully requested to urge the Alaska 08 Commission on Postsecondary Education to immediately cease implementation of 20 AAC 09 15.925 (Program and Institutional Default Rates) and take whatever action is necessary to 10 rescind the regulation; and be it 11 FURTHER RESOLVED that the Governor is respectfully requested to urge the 12 Alaska Commission on Postsecondary Education to work and consult with all affected parties 13 in order to achieve a satisfactory resolution of the issues raised by student loan default rates 14 and to craft a more equitable loan default regulation.