HB 256 AM: "An Act relating to calculation of the default rate for purposes of the student loan program and to regulation of postsecondary educational institutions; and providing for an effective date."
00HOUSE BILL NO. 256 am 01 "An Act relating to calculation of the default rate for purposes of the student 02 loan program and to regulation of postsecondary educational institutions; and 03 providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 14.43.120(d) is amended to read: 06 (d) Scholarship loans may not be made to a student 07 (1) for more than a total of $42,500 for undergraduate study; 08 (2) for more than a total of $47,500 for graduate study; 09 (3) for more than a combined total of $60,000 for undergraduate and 10 graduate study; 11 (4) to attend an institution [,] if the total amount of scholarship loans 12 made to students to attend that institution exceeds $100,000 and the default rate on 13 those loans is (A) greater than 20 percent but less than 25 percent, and the institution 14 is unable to reduce its default rate within 24 months after the rate determination; or
01 (B) equal to or greater than 25 percent for two consecutive calendar years; for 02 purposes of this paragraph, the default rate shall [ANNUALLY] be determined by the 03 commission for each annual group of [FROM] loans required to be repaid under (g) 04 of this section on or after July 1, 1996; if a scholarship loan is refused based on the 05 provisions of this paragraph and, under a subsequent default rate determination, an 06 institution's default rate does not exceed the limits established under this paragraph, 07 the commission may not refuse to issue a scholarship loan to attend that institution 08 based on the provisions of this paragraph. 09 * Sec. 2. AS 14.48.030 is repealed and reenacted to read: 10 Sec. 14.48.030. Exemptions. (a) The following educational programs, and 11 institutions providing only the following educational programs, are exempt from the 12 provisions of this chapter: 13 (1) instruction provided at a level from preschool through grade 12, 14 including preparation for general equivalency diploma examinations; 15 (2) a program operated by the United States; 16 (3) a program that does not offer educational credentials and is 17 provided only to prepare individuals to take graduate examinations; and 18 (4) a program that does not offer educational credentials and is only 19 avocational or recreational in nature. 20 (b) The commission may exempt the following educational programs, and 21 educational institutions only providing programs exempt under (a) of this section and 22 this subsection, from some or all of the provisions of this chapter: 23 (1) a program operated by a state or a political subdivision of a state; 24 (2) instruction sponsored by a bona fide trade, business, labor, 25 professional, or fraternal association or organization, recognized by the commission, 26 and conducted only for that association's or organization's membership; 27 (3) nonprofit postsecondary educational institutions offering 28 undergraduate or graduate educational programs, from a facility in this state, that are 29 acceptable for credit toward an associate, bachelor's, or graduate degree; 30 (4) a program that is provided without a fee, other than the actual cost 31 of materials, to students;
01 (5) a program that does not offer education credentials; 02 (6) a short course of study that is no more than 10 days or 80 hours in 03 duration; 04 (7) a program offered within the state by an out-of-state institution that 05 is authorized to operate by the state in which it is located and is nationally or 06 regionally accredited; 07 (8) a program or institution that is regulated by another agency or 08 political subdivision of the state regarding the quality of course contents, facilities, and 09 operation. 10 (c) In this section, "nonprofit" means an organization that is exempt under 26 11 U.S.C. 501(c)(3). 12 * Sec. 3. AS 14.48.090 is repealed and reenacted to read: 13 Sec. 14.48.090. Fees. The commission shall adopt regulations that establish 14 the amount and manner of payment of fees for applications, authorizations, permits, 15 and renewals under this chapter. 16 * Sec. 4. AS 14.48.120 is repealed and reenacted to read: 17 Sec. 14.48.120. Sanctions; cessation of operation. (a) An authorization to 18 operate or an agent's permit may be revoked, suspended, or conditioned if the 19 commission has reasonable cause to believe that the holder of the authorization or 20 permit has violated this chapter, AS 45.50.471, or regulations adopted under this 21 chapter or under AS 45.50.491. Except as provided in (c) and (d) of this section, 22 AS 44.62 (Administrative Procedure Act) governs the procedure for a revocation, 23 suspension, or other sanction under this section. 24 (b) In addition to the sanctions imposed under (a) of this section, the 25 commission may assess a civil fine, not to exceed $5,000, for costs of investigating 26 and adjudicating a matter under this section if the commission finds that a violation 27 has occurred. 28 (c) Authorization for an institution to operate and a permit for an agent 29 representing that institution are canceled 30 days after the institution ceases to operate 30 as a postsecondary educational institution. The commission shall give the institution 31 and the agent 15 days' written notice, by certified mail, sent return receipt requested,
01 to the last known address of the institution and agent. 02 (d) The institution or the agent may appeal a cancellation under (c) of this 03 section by filing an appeal in writing with the commission within 30 days after the 04 cancellation showing that the institution has not ceased operating as a postsecondary 05 educational institution. 06 * Sec. 5. AS 14.48.130(c) is repealed and reenacted to read: 07 (c) If, based on the evidence at a hearing, the commission finds that a 08 postsecondary educational institution or its agent, or both, has engaged in an act or 09 practice that violates this chapter or regulations adopted under this chapter, the 10 commission 11 (1) shall serve on the institution or agent, or both, an order requiring 12 the institution or agent, or both, to cease and desist from the act or practice; 13 (2) may award the individual or class of individuals named in the 14 complaint full or partial restitution for damage or loss if the commission finds that the 15 individual or class of individuals has suffered loss or damage as a result of the act or 16 practice; 17 (3) may impose the penalties provided for in AS 14.48.190; 18 (4) may assess a civil fine, not to exceed $5,000, for costs of 19 investigating and adjudicating a matter under this section; and 20 (5) may, based on its own investigation and the evidence presented at 21 the hearing, begin an action to revoke an institution's authorization to operate or an 22 agent's permit. 23 * Sec. 6. AS 14.48.130 is amended by adding a new subsection to read: 24 (d) If the commission makes an award under (c)(2) of this section to an 25 individual who owes principal or interest to a lender for a loan received for the 26 purpose of financing education provided by the institution, the institution, or surety, 27 if applicable, shall pay the amount of the award that does not exceed the outstanding 28 loan balance to the lender to be credited against the loan. Notwithstanding this 29 subsection, the commission may, for good cause shown, order that all of the award be 30 paid to an individual who receives an award from the commission. 31 * Sec. 7. AS 14.48.210(3) is amended to read:
01 (3) "authorization to operate" means approval of the commission to 02 operate or to contract to operate a postsecondary educational institution that provides 03 education or grants educational credentials in the state; 04 * Sec. 8. AS 14.48.210(5) is amended to read: 05 (5) "education," [OR] "educational program or services," "instruction," 06 or "instructional program" [OR LIKE TERM] includes any class, course, or 07 program of training, instruction, or study; 08 * Sec. 9. AS 14.48.210(8) is amended to read: 09 (8) "postsecondary educational institution" means [INCLUDES AN] 10 academic, vocational, technical, home study, business, professional, or other school, 11 college, or university offering education [, OR OTHER ORGANIZATION OR 12 PERSON, OFFERING EDUCATIONAL CREDENTIALS, OR OFFERING 13 INSTRUCTION OR EDUCATIONAL SERVICES] primarily to persons who have 14 completed or terminated their secondary education, or who are beyond the age of 15 compulsory high school attendance, for attainment of educational, professional, or 16 vocational objectives; 17 * Sec. 10. AS 14.48.210(11) is amended to read: 18 (11) "to operate a postsecondary institution" means to establish [,] or 19 maintain a facility or location [IN THE STATE] where education is provided 20 [OFFERED OR GIVEN,] or postsecondary educational credentials are [OFFERED 21 OR] granted to persons in the state [,] and includes contracting with any person, 22 group, or entity to operate such an educational institution. 23 * Sec. 11. TRANSITIONAL PROVISIONS. (a) Until a new fee schedule is adopted by 24 regulation under AS 14.48.030, as amended by sec. 3 of this Act, the commission may charge 25 the fees set out in the following schedule for an authorization to operate an institution in this 26 state and for an agent's permit related to activities for postsecondary educational institutions: 27 (1) authorization to operate $100; 28 (2) renewal of authorization to operate $100; 29 (3) an agent's permit $ 50; 30 (4) renewal of an agent's permit $ 50. 31 * Sec. 12. The commission may immediately proceed to adopt regulations necessary to
01 implement the changes made by this Act. The regulations take effect under AS 44.62 02 (Administrative Procedure Act), but not before the effective date set out in sec. 14 of this Act. 03 * Sec. 13. Section 12 of this Act takes effect immediately under AS 01.10.070(c). 04 * Sec. 14. Except as provided in sec. 13 of this Act, this Act takes effect July 1, 1997.