SSHB 272: "An Act providing for a reduction in interest on postsecondary education loans for residents."
00 SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 272 01 "An Act providing for a reduction in interest on postsecondary education loans for 02 residents." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 14.43 is amended by adding a new section to read: 05 Sec. 14.43.123. Interest rate reduction for residents. (a) Notwithstanding a 06 contrary provision of law, the commission shall provide for a reduction of three 07 percent a year from the established interest rate for a loan issued under AS 14.43.091 - 08 14.43.160, 14.43.161 - 14.43.168, or 14.43.170 - 14.43.175 for the time period in 09 which the borrower establishes and maintains residency in the state while repaying the 10 loan if 11 (1) the loan for which the reduction in interest is allowed is not in 12 default; and 13 (2) any portion of the principal or interest on the loan is not eligible to 14 be repaid or forgiven by a third party.
01 (b) For a borrower eligible for a reduction in the interest rate under (a) of this 02 section, the commission shall provide for a three percent reduction in the interest rate, 03 amortized and prorated from the beginning of the interest accrual period for the loan to 04 the date the borrower becomes eligible under (a) of this section, but not for a period 05 longer than five years, if the borrower established residency in the state in the 06 two-year period immediately following completion of the education for which the loan 07 was issued. 08 (c) The commission shall prorate on an annual basis a reduction in the interest 09 rate under (a) of this section over the period of residency that coincides with the loan 10 repayment period. 11 (d) A reduction in interest rate provided under this section is in addition to any 12 other available reduction in interest rate. 13 (e) Notwithstanding the reduction in interest rate available to a student under 14 this section, the corporation may maintain a minimum three percent interest rate for 15 loans issued by the corporation if necessary for a purpose that is consistent with the 16 duties of the corporation. 17 (f) A person who is issued a reduction in the interest rate under this section in 18 error shall repay the amount of the reduction, plus interest. 19 * Sec. 2. AS 14.43.165 is amended by adding a new subsection to read: 20 (d) A borrower under AS 14.43.161 - 14.43.168 may be eligible for a 21 reduction in the interest rate under AS 14.43.123. The commission shall reduce the 22 interest rate of a loan under AS 14.43.161 - 14.43.168 as specified in AS 14.43.123 if 23 the borrower meets the eligibility requirements of that section. 24 * Sec. 3. AS 14.43.171 is amended to read: 25 Sec. 14.43.171. Applicability of other laws. The provisions of 26 AS 14.43.120(d)(4), 14.43.122, 14.43.123, 14.43.135, 14.43.140, 14.43.145 - 27 14.43.160, 14.43.164, 14.43.166, and 14.43.168 apply to the loans made under 28 AS 14.43.170 - 14.43.175 as if the loans were made under those applicable provisions.