Legislature(2025 - 2026)DAVIS 106
02/17/2025 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB28 | |
| HJR5 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 28 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HJR 5 | TELECONFERENCED | |
HB 28-TEACHER/STATE EMPLOYEE STUDENT LOAN PRGRM
CO-CHAIR HIMSCHOOT announced that the only order of business
would be HOUSE BILL NO. 28, "An Act establishing a student loan
repayment pilot program; and providing for an effective date."
8:06:02 AM
REPRESENTATIVE ANDI STORY, Alaska State Legislature, as prime
sponsor, presented HB 28 to the committee. She read from the
sponsor statement for HB 28 [included in the committee packet]
which read as follows [original punctuation provided]:
Alaska continues to experience an out-migration of its
young, working-age adults. Among the 34% of high
school graduates who enroll in postsecondary education
following high school graduation, 16% attend college
out of state, with only 18% enrolling at in-state
institutions. Statistics show that of those who go
out of state, only 35% return to Alaska with their
earned skills. Additionally, analysis of student loan
information from a national student loan lender report
shows Alaskans have an average balance of $35,821 of
federal and private student loan debt upon graduation.
Teacher and state employee positions are at an all-
time high vacancy rate. Multiple efforts on different
fronts will be needed to attract Alaskans back home to
participate in our economy.
House Bill 28 creates a student loan repayment program
for Alaska residents who travel south for their higher
education degree or technical certificate or who
complete their degree or certification through the
University of Alaska system and have been out of the
state for a year or more. This three-year program
would encourage them to return to Alaska to work as
teachers or state employees by reimbursing their
student loan lender up to $8,000 per year. This grant
would be administered by the Alaska Commission on
Postsecondary Education and funded through the Higher
Education Investment Fund (HEIF).
This program is one solution to increase in-migration.
It provides these students an incentive to return to
Alaska to after completing their postsecondary
education. By investing three years to work as a
public employee or teacher, they can be reimbursed for
up to $24,000 on their student loans while also
contributing to the state's economy. Many of these
students have family and community roots here in
Alaska and are familiar with its unique environment,
meaning they are more likely to remain in these
positions than new arrivals from out of state.
Please join me in supporting House Bill 28 to bring
these skilled individuals back to Alaska and reduce
the vacancies in our schools and state services.
8:10:37 AM
SHERRI BOWMAN, Staff, Representative Andi Story, Alaska State
Legislature, on behalf of Representative Andi Story, prime
sponsor, presented HB 28 to the committee. She read from HB 28's
sectional analysis [included in the committee packet] which read
as follows [original punctuation provided]:
Section 1: Adds a new section to the uncodified
law creating a student loan repayment pilot program:
a) The program will be developed and administered
by the Alaska Commission on Postsecondary
Education. Subject to appropriation, the
commission may award a grant to a person who:
1) applies not later than October 31,
2025;
2) is a full-time state employee or public
school teacher;
3) has a degree or certificate from a higher
education institution from outside Alaska;
4) was an Alaska resident for at least a
year before attending the out-of-state
institution;
5) or has completed a degree or certificate
through the University of Alaska system and
has resided outside of the state for 12
months or more prior to returning to Alaska
to work as a full-time state employee or
public school teacher;
6) owes payment on a student loan taken to
obtain their degree or certificate.
b) The Commission will establish an application
process, along with policies to determine the
efficiency and success of the program in
recruiting and retaining grant recipient
employees with the state and school districts.
The commission will report to the legislature
yearly.
c) To participate, applicants may be required to
refinance their existing student loans through
the commission.
d) Grants awarded are only for full-time teachers
or state employees, and payable only at the
completion of a year of work.
e) Participants may receive a grant each year for
a maximum of three years in an amount not to
exceed $8,000 per year. If the balance of the
participant's outstanding loan is less than
$24,000, the grant will be equal to one-third of
the balance in each year of participation in the
program.
f) Up to 125 grants will be awarded each fiscal
year. The total dollar amount awarded may not
exceed $1,000,000 in a fiscal year. If the amount
appropriated in a fiscal year is insufficient to
meet the amounts awarded, the commission will
reduce the amounts awarded.
Section 2: Adds a new section to the uncodified law
requiring the commission to submit a report on
December 21 of 2025, 2026, and 2027 that describes the
effects of the pilot program on recruitment and
retention of teachers and state employees. The last
report will include an analysis of the overall success
rate and effectiveness of the program.
Section 3: This bill sunsets on December 31, 2027.
Section 4: This Act takes effect immediately.
8:14:06 AM
MS. BOWMAN presented the fiscal note to the committee. She
clarified that the proposed legislation would be funded by the
higher education investment fund.
8:15:27 AM
REPRESENTATIVE EISCHEID asked if there was any reason why the
limit of 125 grants was chosen. He asked if school nurses or
other employees who are not clearly public servants or teachers
would qualify for HB 28's proposed benefits.
REPRESENTATIVE STORY answered that her office chose the number
of 125 grants as a means to equally distribute 125 $24,000
grants from a $1 million dollar funding pool. She said that
nurses and other public servant positions would not be covered
by the proposed legislation.
8:17:35 AM
REPRESENTATIVE ELAM asked if there was "anything preventing our
school districts from doing this already" and asked if giving
teachers pay bonuses might function in the same way that HB 28's
grant funding could.
REPRESENTATIVE STORY answered that she would follow up with more
information regarding his first question and said that a teacher
most certainly could apply a pay bonus towards their own student
loans.
8:19:43 AM
KERRY THOMAS, Interim Director, Alaska Commission on
Postsecondary Education, Gave invited testimony on HB 28. She
explained that student loan repayments are an employer-sponsored
benefit that is agreed upon through terms defined in a written
agreement between the employer and employee. She emphasized the
difference between loan forgiveness and loan repayment and said
that loan repayment programs often benefit both employers and
employees by both reducing the employee's financial burden and
keeping employers competitive in a "tight labor market." She
said that many states have opted to switch to loan repayment
programs in lieu of loan forgiveness programs due to the
aforementioned benefits.
8:25:49 AM
REPRESENTATIVE ELAM asked if the Alaska Commission on
Postsecondary Education (ACPE) would administer the program
proposed by HB 28 and asked how HB 28 would impact the workload
of ACPE staff.
MS. THOMAS said that she expected to see HB 28 take up the work
of up to a third of a full-time position within the ACPE.
8:27:51 AM
CO-CHAIR HIMSCHOOT asked if Alaska has done a program similar to
HB 28 in it's past.
MS. THOMAS answered that Alaska once had a program called the
"Sharp" funding program that forgave the loans of medical
students.
8:28:55 AM
REPRESENTATIVE ELAM asked how long the proposed benefits of HB
28 might entice someone to stay in Alaska.
MS. THOMAS answered that she would follow up with more
information later.
8:29:44 AM
REPRESENTATIVE SCHWANKE asked how the program proposed by HB 28
would affect the current funding levels of the ACPE. She asked
if HB 28 would disenfranchise Alaskans who chose to study in
Alaska.
MS. THOMAS answered that the Department of Revenue would be a
more appropriate entity to answer her question and clarified
that the current ACPE funding amount is set in Alaska Statute
and would not be affected by HB 28.
REPRESENTATIVE STORY added that she, as prime sponsor, has
nicknamed HB 28 the "come back home bill", as its primary goal
is to address the problem of outmigration in Alaska.
8:34:17 AM
TERRY FAGERSTROM, Former Recipient, Alaska Loan Forgiveness
Program, gave invited testimony on HB 28. She said that the
student loan forgiveness offered by the State of Alaska allowed
her to afford to study out of state and emphasized how the
historic loan forgiveness program allowed her to live and work
in Alaska. She said "the way I look at it, for $11,000 the State
of Alaska got a 31-year very productive, highly educated
employee, I think that's a pretty good return on investment."
8:39:44 AM
REPRESENTATIVE ELAM asked how differing amounts in investments
might entice people differently.
MS. FAGERSTROM said that "money is going to talk" and emphasized
the positive impact of student loan forgiveness and repayment.
8:42:17 AM
CO-CHAIR HIMSCHOOT offered her understanding that the fund
sourcing for HB 28 would come from Designated General Funds
(DGF).
8:42:48 AM
REPRESENTATIVE EISCHEID asked Ms. Fagerstrom if she would have
returned to Alaska if the loan forgiveness program didn't exist
in the 1970s or 1980s.
MS. FAGERSTROM replied that the loan forgiveness program played
an important role in her returning to Alaska.
[Co-Chair Himschoot opened public testimony on HB 28].
8:46:03 AM
LON GARRISON, Executive Director, Association of Alaska School
Boards, Testified in support of HB 28. He said that HB 28 could
play a vital role in the recruitment and retention of born-and-
raised Alaskans. He explained a series of resolutions that the
Alaska Council of School Administrators (ACSA) passed in support
of the creation of a loan forgiveness or repayment program in
Alaska and emphasized that the proposed legislation would invest
in Alaskans, support its schools and students, and strengthen
its communities.
8:48:55 AM
DR. LISA PARODY, Executive Director, Alaska Council of School
Administrators, Testified in support of HB 28. She shared her
admiration for the ACPE and their work in finding ways to
address the issues the face Alaska and its education system. She
said that HB 28 "aligns closely" with the ACSA's resolutions in
support of the creation of a loan forgiveness or repayment
program in Alaska. She said that the proposed student loan
repayment program under HB 28 would provide a "targeted and
practical solution to one of the most significant barriers
facing educators and public employees, student loan debt." She
explained that the proposed policies of HB 28 would directly
incentivize people to both pursue a higher education and live
and work in Alaska.
8:53:17 AM
REPRESENTATIVE EISHEID asked what a school district in Alaska
might lose when they invest in a new employee who eventually
decides to leave.
DR. PARODY explained the outsized impact that poor teacher
retention is having on schools in Alaska and drew a parallel
between poor teacher retention and a dysfunctional business
practice that might always lead to a poor return on investment.
She said that HB 28 would "get to the root" of the issue of
teacher retention in Alaska's schools.
8:57:39 AM
CO-CHAIR HIMSCHOOT asked if the governor's playbook on teacher
retention mentioned educators who were born in Alaska and want
to stay in Alaska. She asked how the loan repayment program
proposed by HB 28 was mentioned in the playbook.
DR. PARODY replied that she would need to review the document
that Co-Chair Himschoot mentioned and follow up with an answer
later.
9:01:25 AM
CO-CHAIR HIMSCHOOT, after ascertaining that there was no one
else who wished to testify, closed public testimony on HB 28.
9:01:36 AM
CO-CHAIR HIMSCHOOT announced that HB 28 would be held over.