Legislature(2025 - 2026)ADAMS 519
05/08/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB73 | |
| HB28 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 57 | TELECONFERENCED | |
| += | SB 113 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 28 | TELECONFERENCED | |
| += | HB 73 | TELECONFERENCED | |
HOUSE BILL NO. 28
"An Act establishing a student loan repayment pilot
program; and providing for an effective date."
2:19:05 PM
Co-Chair Foster stated that the committee had previously
taken public testimony on the bill and had reviewed the
fiscal notes. He asked the bill sponsor to provide a brief
recap of the bill.
REPRESENTATIVE ANDI STORY, SPONSOR, reviewed the bill with
prepared remarks:
We had our first hearing on House Bill 28, on April
28, 2025. As we know, Alaska is facing a workforce
crisis. For the past 12 consecutive years, more
residents have left the state than have arrived, and
this outmigration has contributed to high vacancy
rates in our state employee positions and in our
teaching positions. This is impacting the quality of
services Alaskans receive and disrupts our children's
education.
This bill encourages in-migration of former Alaskans
by establishing a student loan repayment program that
aims to bring former Alaskans back to Alaska by
offering student loan repayment assistance for those
who return to work here as state of Alaska employees
or as teachers. These employer-sponsored loan
repayment programs are emerging as a top tool for
recruiting and retaining workers by states. This
program is for individuals who have student loan debt
and are living out of state for a year or more. They
have obtained postsecondary degrees or technical
certificates from our University of Alaska system and
have moved out or they received their certificates
from postsecondary institutions outside of Alaska. I
have nicknamed this bill "Come back home." These are
individuals with personal ties to Alaskan family,
friends, and communities and our seasons here and;
therefore, are more likely to stay once they return,
especially when paired with a benefit like employer
sponsored loan repayment. Employers have seen that
individuals they hire with connections to our state
and communities typically stay longer in their
employment.
This program would provide $8,000 per year for up to
three years and $24,000 total paid directly to a
participant's student loan servicer after each year of
completed service. It is capped at 120 participants.
The pilot would be funded through the Alaska Higher
Education Investment Fund (HEIF), which is currently
managed by the Department of Revenue and supports the
WWAMI Medical Education Program, the Alaska
Performance Scholarship (APS), and the Alaska
Education Grant (AEG). According to the March 6 letter
from ACPE Acting Director Kerry Thomas, included in
your packets and posted on BASIS, the health of the
fund remains good. However, recent policy changes have
increased expenditures from the HEIF:
• WWAMI program funding increased by 50% beginning
in FY25 to support 30 students instead of 20.
• Legislative changes to APS in FY24 raised
projected APS and AEG costs to $25.5 million by
FY26, roughly 20% higher than originally
expected.
Combined, expenditures from the HEIF are projected to
rise by about 30 percent between FY24 and FY26.
Funding HB 28 would require an additional $1 million
per year for three years, a 3 percent increase in
annual spending, further reducing the fund's value.
While this does affect the fund's value, it does not
significantly alter the long-term sustainability of
the fund. ACPE notes that only one year of post-
policy-change data is currently available, so long-
term projections will improve with future cohorts.
Regarding concerns about long-term appropriations, I
want to clarify, as Conor Bell from Legislative
Finance noted: House Bill 28 is a policy bill and does
not appropriate funds. If passed and the fiscal note
is included in the operating budget, the funding would
remain in the base budget through FY28. However, as
with any appropriation, future legislatures or the
Governor could modify or remove that funding. It will
always be subject to appropriation and that would be
made clear to the individuals applying for this
program.
In closing, I believe this $3 million pilot, spread
over three years, is a strategic investment that could
help us bring 120 skilled former Alaskans back into
our workforce, stabilize essential public services,
and help reduce long-term staffing shortages. This
bill represents a smart, targeted investment in our
workforce needs.
I am happy to answer any questions you may have.
2:25:08 PM
Representative Stapp asked about the concept of applying
the bill only to teachers and state employees. He asked why
the bill did not apply to everyone.
Representative Story responded that she knew residents had
experienced long wait times at the Division of Motor
Vehicles (DMV), for Supplemental Nutrition Assistance
Program (SNAP), and at the Alaska Marine Highway System
(AMHS) due to a high employee vacancy rate. She believed
the overall vacancy rate was 16 percent, but it was 40
percent in payroll. She noted there were certain areas
falling behind that needed state employees. She highlighted
there were 600 teacher vacancies and first day shortages.
She explained that she chose teaching and state employees
to target high need areas.
Representative Stapp asked how the HEIF fund was
capitalized.
Representative Story answered that the HEIF had some
investment earnings. The legislature would have to make a
special appropriation to the fund if it was reduced to a
balance the legislature was concerned about.
Representative Stapp looked at page 2 of the bill
pertaining to being outside the state at least 12 months
before beginning full-time as a certified teacher in a
public school or a full-time employee of the state. He
asked why 12 months had been selected and not 8 or 9
months.
Representative Story replied that the bill targeted in-
migration. She wanted to bring people back home. She did
not oppose the idea of an amendment where a person received
their degree out of state and it was an incentive to get
them to come back home and make their career in Alaska. She
picked one year because she felt it was an adequate amount
of time, but she certainly would welcome individuals back
home who had been out of state for a longer period like
five years.
Representative Stapp thought the intent of the bill was to
bring people into the state to be teachers or work for
state government. He looked at Section 1, page 1 of the
bill and observed that the bill required that a person had
lived in Alaska and then left for a period of 12 months and
the program was aimed at getting them to return to Alaska.
He wondered why the bill required individuals to have lived
in Alaska previously if the objective was to get people to
Alaska to be teachers. He wondered if Representative Story
had considered offering the grant money to teachers or
state employees who had moved to Alaska and worked for a
year.
Representative Story answered that she had been struck by
the number of individuals who moved out of Alaska. She
explained that the bill aimed to incentivize people to move
home. She believed people who left the state had a strong
connection to Alaska. She knew from speaking to many
superintendents that people hired from other states did not
do as well as Alaskans or people who had been associated
with Alaska previously.
Representative Stapp stated his understanding that a person
could get the grant if they lived in Alaska, left for a
year, and came back. He thought it appeared the person
could get the grant and leave again, instead of being
required to remain working in Alaska for another year.
Representative Story replied that a person would be
required to work in Alaska for a year and on their one-year
anniversary date, the $8,000 would go to the individual's
student loan institution. The individual would not touch
the money.
Representative Stapp asked what would happen if a person
did that and then left.
Representative Story replied that the money would then be
available to someone else in the program. She explained
that because it was a three-year program, a person received
$8,000 on their merit anniversary date at the year-one,
two, and three mark. She detailed that if a person left
after the first year, the money would remain in the pot for
someone else. She relayed that Alaska Commission on
Postsecondary Education (ACPE) would be developing the
regulations for the program and if the funding from the
person who left went to another individual, the incoming
individual would only receive funding for two years. She
noted it was a pilot program that the state would try for
three years. If the program was successful, the state may
decide it liked the student loan forgiveness programs.
2:31:57 PM
Representative Stapp looked at page 2 of the bill and
stated his understanding that a person could get the $8,000
for their student loan after their first year and could
leave the next day. He suggested requiring individuals to
stay another year after they received the money or they
would have to pay the money back.
Representative Story shared her perspective that if the
person left after one year, the state would have gotten one
year of work out of the individual and the money would go
directly to the student loan institution.
Representative Allard thought in theory the bill was a good
idea. She explained that in the military a person had to
serve their whole time if they got a bonus or they had to
give the money back. She had hesitation associated with the
bill. She stated her understanding the bill was a
recruiting tool for teachers and government employees. She
remarked that job opportunities were one reason people did
not come back to Alaska, especially between the ages of 20
and 34. She asked what the rate of the return would be. She
highlighted that the state had no money in its budget. She
remarked that the bill meant the state would pay people to
come to Alaska and pay them to work, but the state was not
receiving a rate of return. She remarked that the bill only
pertained to government. She suggested that perhaps it
could be broader for helping to grow the private sector.
She asked how to justify a person only coming for one year.
Representative Story replied that under the bill, the
person accepting the loan assistance program would have to
work for one full year for the state before they would
receive the $8,000. She noted that the money would go
directly to the loan institution. The bill would provide
relief for individuals with significant student loan debt.
She selected teachers and public employees due to high
vacancy rates, which was resulting in Alaskans not getting
the quality service delivery they deserve. She was
concerned about the teacher vacancy rates and noted there
were 600 open positions at the start of the year. She
highlighted that the University of Alaska only graduated
153 teachers per year. She explained that many teachers
were coming to Alaska from international locations on
visas. She noted that reports were that the individuals
were well-trained and doing well. She was hoping to target
public employees to ensure residents received services they
deserved.
2:36:12 PM
Representative Allard thanked Representative Story for her
response. She stated that some of the things impacting
recruitment for the state were job opportunities; however,
there were so many government vacancies that she thought
the lack of job opportunities were in the private industry.
She highlighted other factors including the high cost of
living, state budget issues, isolation and climate, lack of
community for newcomers, education and family, demographics
(elders leaving Alaska for warmer climates and medical
needs), and jobs and infrastructure for individuals between
the age of 20 and 34. She wondered if the legislature could
work on something to target longevity of individuals coming
up and spending the money more wisely than targeting a
short-term of 12 to 36 months for government employees. She
wanted to see some sort of incentive for anyone who wanted
to come to Alaska. She noted the incentives would need to
pertain to the factors she had listed. She appreciated the
bill.
Representative Story believed that losing mid-aged
professionals was something dear and close to "all of us."
She thought targeting former Alaskans who had left the
state helped them when they came back because they likely
had connections with family members and communities and
were more apt to remain in Alaska. The state was currently
using bonuses for employees to ensure it was providing the
current level of service.
Representative Tomaszewski remarked that not every state
job requires a college degree. He asked if there was any
provision for individuals who were coming back to Alaska to
work that did not require a college education.
Representative Story answered that she had targeted people
with degrees based on the job needs in state government and
teaching. She stated that there were certainly people in
state employment in maintenance where there were different
occupational certificates that the state could attract. She
reiterated that she targeted known job and skill set needs,
whether it was occupational endorsements or certificates.
She explained it would include some postsecondary and was
career/technical. She remarked that programs had different
costs that people would need different reimbursements for.
She highlighted the example of a person leaving Alaska to
get a commercial driver's license (CDL) as an example and
remarked that it was expensive.
Representative Tomaszewski noted that some people left
state to go to college, worked full-time, and did not incur
any student loan debt. He asked how the bill did not
discriminate against those individuals.
Representative Story answered that the program was not
meant to discriminate against anyone. She spoke with
Legislative Legal Services and had been told that as long
as there was a clear intent for targeting a certain
population and there was sound rationale, it was
justifiable. The bill would have to target the high vacancy
rates, and she would need to have the data to back up why
the program could be offered to one person and not another.
Representative Tomaszewski understood that Representative
Story had worked hard to ensure it did not happen, but he
observed that it did not change the fact that some people
received degrees out of state who graduated with no debt
for various reasons. He asked if there was a method to
offer it as a bonus or some other way. He thought it seemed
to discriminate against those individuals who worked hard
to not accrue debt. He asked about private sector
professionals including doctors and physical therapists who
were desperately needed in Alaska.
2:42:27 PM
Representative Story replied by providing an example of
AMHS. The state's overall vacancy rate was 16 percent, but
AMHS had a 50 percent vacancy rate. She stressed that it
was impeding ferry service in Southeast Alaska. She
elaborated that the legislature had appropriated enough
money to fund an extra ferry service because service had
been very limited; however, there was not sufficient staff
to run the ferries. The bill targeted public service areas
due to a lack of service in those areas. She highlighted a
document in members' packets [titled "Student Loan Debt by
State" updated October 15, 2024] (copy on file) specifying
that the average Alaskan had $30,000 in student loan debt.
She believed the individuals who had been able to work and
pay for school did not likely have the stress levels that
people with student loan debt had. She was glad for
individuals who did not have to have student loan debt, and
she understood Representative Tomaszewski's point. She
stated that there was a lot of student loan debt and the
bill targeted something other states found helpful. She
added it was a loan incentive program that other states
were moving to. She noted that members' bill packets
contained a letter from ACPE about what other states were
doing to fill employee vacancies [letter from Kerry Thomas,
ACPE Acting Executive Director, dated March 6, 2025] (copy
on file).
Representative Tomaszewski stated that they were talking
about the bill like it would be a long-term solution for
vacancies; however, it was only a three-year program. He
asked if Representative Story envisioned the initial
program as a steppingstone that would continue on after the
first three years that would pay off someone's entire
$35,821 average student loan debt.
Representative Story replied that it was intended as a
three-year pilot program to determine whether it was
successful. She stated that after three years a legislature
could decide if they wanted to continue it if the program
was successful. She stated that often times when starting
programs, it was important to see how long they would last.
She highlighted that information in members' packets
specified that ACPE would provide the legislature with a
report on how the program was going. She stressed the
importance of evaluation components. She relayed that
whether the program should be continued would be up to a
future legislature.
2:45:46 PM
Representative Galvin thanked the sponsor for bringing the
bill forward. She was always happy to see proposed
solutions to ensure the state was delivering public
services it intended to deliver. She noted that
Representative Story had already cited AMHS and education
as examples. She asked how much the state was currently
spending on recruitment for things like signing bonuses and
related items. She recalled that years back a commissioner
from Commonwealth North had identified the amount of money
the state was spending to recruit teachers. She wondered if
Representative Story knew the current number.
Representative Story answered that she would follow up with
the information.
Representative Galvin relayed that former Commissioner
Johnson of the university system [Jim Johonsen served as
University of Alaska president from 2015 to 2020] had
shared that the state was spending $21 million annually [on
recruitment]. She thought there was a history of loan
forgiveness programs, particularly for teachers. She shared
that many teachers had asked her "why aren't you doing
this?" She asked what programs the state offered
historically and whether they were successful.
Representative Story answered that Alaska had a loan
forgiveness program in the past. There had been invited
testifiers in previous bill hearings including Rico Worl.
She explained that the previous program had been different
and ACPE Acting Director Kerry Thomas gave some information
about the reason the loan forgiveness programs had been
discontinued. She explained that many students did not pay
off their loans to the State of Alaska and consequently,
the state had to act like a loan institution and there had
been a lot of defaulting on the loans. She explained that
many states had moved away from those programs. She relayed
that some of the programs were successful. She highlighted
a testifier in a prior committee, Terry Fagerstrom, who had
worked for the state for 30 years with a loan forgiveness
program. Overall, the state did not find the program
successful because it was left with people not paying their
loans. She explained that states had now gone to loan
repayment programs that targeted people with degrees who
were ready to work. She detailed that it had been much more
successful and loan institutions were the ones dealing with
any deferments or payments.
Co-Chair Foster noted that Kerry Thomas with ACPE was
available online.
Representative Galvin stated her understanding that between
all of the universities in Alaska, about 230 teachers
graduated per year. She remarked on the possibility that
the bill may bring in 120 teachers and stressed it was a
significant number, given that Alaska could not grow as
many teachers as it needed. She asked how Representative
Story had selected the number. She wondered if it was based
on fiscal reality. She added that it would be nice if the
number could be even higher.
Representative Story replied that the $1 million in the
bill was a math number that worked out to be 120 employees
over the three years. She noted that if people left early,
some additional individuals could benefit from the program.
The bill used the HEIF as the fund source because it
pertained to education. She elaborated that HEIF had been
used for other programs and it had been a policy call. She
detailed that the HEIF did not have a set expenditure limit
like the Permanent Fund, but it was important to be very
careful how much was withdrawn from the fund. She explained
that the bill contained a targeted program and $1 million
had been selected in order to keep the fund healthy.
Representative Bynum thanked Representative Story for
coming up with a creative idea to encourage individuals to
come back to Alaska. He believed there would be an
opportunity through amendments to work with the bill
sponsor on some different ideas as well. He looked at page
1, line 12 and observed that under the section an Alaskan
who had attended college out of state could come back to
Alaska and be eligible for the program.
Representative Story agreed that the bill aimed to
encourage Alaskans who had left the state for a year to
return to Alaska.
Representative Bynum looked at page 2, line 2 and thought
the section applied to individuals who had graduated from
the University of Alaska and had been working in another
state for at least 12 months. He surmised the individuals
would be eligible for the program if they moved back to
Alaska.
Representative Story answered affirmatively. She noted the
provision had been added in an amendment because the
university felt strongly that it did not want to neglect
University of Alaska graduates.
Representative Bynum asked if there was any student debt
relief program for individuals who had graduated from the
University of Alaska and had elected to remain in Alaska to
teach. Alternately, he wondered if an individual would have
to leave Alaska for one year to be eligible for the debt
relief.
Representative Story deferred to Ms. Thomas with ACPE for
information on any teacher loan programs that may exist.
She noted there may be some innovative things done by
different districts. She explained that it cost money to
move out of Alaska and the bill intended to target
individuals who had left the state.
Representative Bynum wanted to incentivize Alaska's kids
attending college in Alaska to remain in the state to work.
He looked at language on page 1, line 10, pertaining to
full-time certified teachers in the public school system.
He highlighted that during the Department of Education and
Early Development subcommittee process there had been a lot
of testimony about retention, not only pertaining to
certified teachers, but many other fields within the
education realm (e.g., career technical education
instructors, reading specialists, literacy coaches, special
education teachers, language programs, technical
specialists, school nurses, health educators, and
individuals working with mental health in schools). He
understood all of the programs were very needed in Alaska's
schools. He did not know that they would all qualify under
the bill. He asked if the bill would extend to some of the
other positions such as a CTE technical person, principals,
and superintendents.
Representative Story believed the individuals would be
covered because superintendents and principals were
certified teachers who had moved up the chain of command.
Additionally, special education teachers and career
technical teachers had teaching degrees that were full time
in the district. She noted there may be some part-time
employees with a type-M certificate or something else. The
bill targeted full-time, certified teachers.
2:56:58 PM
Representative Bynum remarked that the bill currently
required an individual to get their degree in order to
qualify. He stated that a teaching degree was very related
to the "field of much need." However, the bill seemed
pretty wide open for individuals with a degree in other
fields coming back to Alaska to work for the state. For
example, there was not a limit based on highly needed state
positions such as fish biologist or Department of
Transportation and Public Facilities engineers. He asked if
the intent was to get people to come back or to fill hard-
to-fill positions requiring degrees. He considered whether
the committee should think about tying the loan repayment
to a job position requiring a degree.
Representative Story replied that ACPE would be responsible
for crafting regulations for the program. She stated that
there had been discussions about whether there would be 200
applications for the program and if applicants would be
selected on a first come, first served basis or based on
high need occupations. She deferred Ms. Thomas with ACPE to
discuss the regulation aspect.
KERRY THOMAS, ACTING EXECUTIVE DIRECTOR, ALASKA COMMISSION
ON POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT (VIA TELECONFERENCE), replied that ACPE
would have to determine how to handle prioritization or
allocation of funds between certified teachers and state
employees in the regulation process. The agency would
assess high need occupations and how much of the
appropriation would be reserved for teachers or state
employees or if it would be on a first come, first served
basis. She highlighted that it was a three-year pilot
program, and she envisioned putting together a relatively
simple model for the pilot program and looking at the
outcomes after the first three years to inform whether it
was a successful program model for Alaska to attract and
retain talent in its workforce.
3:00:32 PM
Representative Bynum pointed to language on page 2, line 14
of the bill specifying that ACPE may require a person to
refinance their outstanding student loan. He asked about
the reasoning and believed it was a large step to take. He
highlighted that loan structures changed when refinanced
and interest rates could dramatically change. He explained
that individuals may find that the benefit was not worth
the process of refinancing.
Representative Story replied that Alaska had a student loan
corporation and the state wanted to see the number of
participants increase. She noted that she had previously
been on the commission at ACPE and she had learned that the
state's program had some of the best loan terms. For
example, there was no fee if a borrower paid off their loan
early. There were several things Alaska's student loan
corporation did, which other lenders charged more money
for. As a public institution, Alaska's corporation could
not advertise its program; therefore, many times Alaskan
students were getting loans through outside private
institutions and paying more than they would if they
financed through Alaska's student loan corporation. She
deferred to Ms. Thomas for additional detail.
Ms. Thomas responded that she did not yet know whether ACPE
would require a participant in the pilot program to
refinance their loans. She explained that the decision
would require financial analysis and coordination with the
Alaska Student Loan Corporation board. She noted that it
was highly unlikely a three-year pilot program would
establish the requirement. She stated that if the program
was extended into the future, the refinancing component may
be worth looking at. She detailed that ACPE offered
extremely competitive interest rates because it was a
nonprofit lender not trying to make a profit. Almost all
other student loan lenders Alaskan students were borrowing
from were profit motivated. She stated that refinancing
with ACPE would likely be a financially beneficial decision
for a program participant. She noted that it would also
bring the interest students were paying on their loans to
Alaska to support its higher education financial aid
programs. She reiterated that no decision had been made on
whether or not ACPE would require refinancing, but she
believed it was more likely it would not be required for
the pilot program. The pilot program would be used as a
period to learn how the program operated, and it would
inform ACPE's long-term strategy based on the outcome.
3:04:42 PM
Representative Bynum spoke to his concern about a scenario
where an individual moved back to Alaska to teach and they
were let go from their teaching position after some period
of time because of a shortfall in a school district or some
reason that was no fault of their own. He asked if there
would be language in the program to protect the
individual's ability to receive the benefit they returned
to Alaska to receive.
Representative Story deferred the question to ACPE.
Ms. Thomas replied that there likely would not be
protection for the individual because it was a benefit
based on service provided. She explained that program
participants would be required to work for a year to earn
the $8,000 benefit. For example, if a person worked for a
school district or the state for a year and was not
retained after that time, they would not be eligible to
receive additional funds.
3:06:25 PM
Representative Stapp asked how to prevent people from
abusing the program. He referenced language on page 1, line
12 of the bill: "complete a postsecondary degree from
outside the state." He provided a scenario where an Alaskan
kid took out student loans to attend a Western
Undergraduate Exchange (WUE) program state to receive lower
tuition. Under the scenario, the individual moved back to
Alaska and the fund that paid for the Alaska Performance
Scholarship (APS) paid back their student loans they
already received a discount on for going out of state. He
asked if there would be requirements in the regulations
specifying that a person could not double dip on the APS
and the student loan forgiveness. He provided another
scenario of a high school kid who took advantage of the WUE
program to go to an out of state university, who then paid
half their tuition and moved back to Alaska to make the
state pay for their loan.
Ms. Thomas replied that it would not be an issue because
APS funds did not leave the state. Any students attending
school outside of the state could not receive their APS
awards.
Representative Stapp restated the question. He looked at
language on page 1, line 12 specifying that the bill
applied to a person who had been an Alaska resident for at
least 12 months prior to leaving to complete a
postsecondary degree out of state. He provided a scenario
where an individual graduated from high school in Alaska
and entered into the WUE program, which gave a student
discounted tuition for going to college out of state in
western states. Under the scenario, the individual took out
student loans and returned to Alaska to work for state
government or as a teacher. He explained that the HEIF
money paid for APS. He explained that under the bill it was
possible for a person to take $8,000 out of a student loan
that they could have received through APS by attending
college in state. Instead, the student had gone to school
out of state at a discount rate and had returned.
Ms. Thomas asked for a repeat of the question.
Representative Stapp reiterated his question. He added that
HEIF also funded the Washington, Wyoming, Alaska, Montana,
and Idaho (WWAMI) program. He viewed the bill as creating
an incentive for Alaskans to leave the state to get a
degree.
Ms. Thomas answered that Representative Stapp was correct
that the program would incentivize that Alaskan to return
to Alaska. She shared that about 50 percent of Alaskan
students attending college went out of state and only about
one-third returned to Alaska. She believed the bill
incentivized those students to return to Alaska.
Representative Stapp considered that the APS was available
to pay for students' tuition who were attending the
University of Alaska. He wondered why a person would not
choose to go to college out of state (e.g., USC) if they
could come back after they graduated and get a state job
and have the state pay their tuition. He suggested that if
he was a kid and could go to USC and Alaska would basically
pay him to go to USC when he returned after his degree, he
did not know why he would go to his own university in
Alaska.
Representative Story answered that a university like USC
cost over $50,000 per year to attend. She remarked that it
was possible a person may do that and return to Alaska
after a year to make $8,000. She appreciated Ms. Thomas
talking about how half of Alaska's graduating class left
the state and only one-third came back. She explained that
those were the individuals the bill was aiming to entice to
return to Alaska. She hoped that the longer they remained
in Alaska to work, the longer they would stay in Alaska.
She appreciated the concern about the health of the HEIF.
She understood that the APS could only be used at the
university at the current time and top-tier students
received a $7,000 discount, meaning students should leave
with much less student debt. She thought the bill would
only be attractive to individuals with high student debt.
3:13:33 PM
Representative Stapp referenced the statistic provided by
Ms. Thomas that one-third of the graduates who left the
state came back. He asked how the bill would prevent people
from merely taking the money when they returned.
Representative Story replied that people returning would
use the $8,000 to pay off any student loan debt and it
would go directly to their loan institution. She stated
they would have lived in Alaska for a year and given the
state a year of service.
Representative Stapp stated that the one-third of Alaskans
who graduate out of state and already return to Alaska
could also receive the money. He wondered how to know the
bill was reaching other people apart from individuals who
already return.
Representative Story thought there would likely be some
situations like that, but the intent was to incentivize
people to return to Alaska because there was a shortage [of
state workers and teachers]. She heard Representative
Stapp's concern and replied that individuals were not
coming back. The point of the bill was to try to encourage
people to come back for state employment and make their
careers in Alaska.
3:15:29 PM
Representative Johnson asked why not focus on individuals
already in Alaska who hold the certificates and have a
student loan to incentivize them to return to the teaching
field or go to work for the state.
Representative Story replied that it was certainly
something that could be done. She had chosen to target
people who had left the state to incentivize them to return
to Alaska. She noted that the state provided some incentive
bonuses to keep people working in Alaska. The bill targeted
the outmigration of people to get them to return.
Representative Johnson asked if the bill would also apply
to international locations.
Representative Story answered it was her intention for the
bill to only apply to the Lower 48.
Representative Johnson asked if a recipient would have to
be a resident to be eligible for the funds. She wondered if
the state may be paying people who were not Alaska
residents.
Representative Story believed after one year the
individuals would be residents. She deferred to Ms. Thomas
for additional detail.
Ms. Thomas answered that ACPE could address the residency
definition for the program in regulation. She stated that
as the bill was written, there was no requirement for
residency to receive the funds.
3:18:12 PM
Representative Johnson recalled that Representative Story
was not in favor of teacher bonuses. She asked if her
understanding was accurate.
Representative Story corrected that she was in favor of
teacher bonuses, but she was in favor of an increase to the
Base Student Allocation (BSA) first. She explained that
when the BSA was increased, local districts could increase
teacher contracts and when teachers went to apply for a
loan for a house or vehicle, the lending institution knew
they had the income. She noted that lending institutions
did not know about bonus income. She would like to see
teacher bonuses if there was an increase in the BSA first.
Representative Johnson asked if Representative Story would
be supportive of making the benefit in the bill an $8,000
payment instead of a loan repayment.
Representative Story did not support the idea. She believed
it was very important for the money to go to loan
institutions to pay off an individual's student loan debt.
Representative Johnson stated that the concept put students
who had been responsible and perhaps worked through college
and had no student debt at a bit of a disadvantage.
Representative Story replied, "Yes."
Representative Johnson liked the idea of spending money on
Alaskans; therefore, she was having some challenges with
the bill. She underscored that the HEIF needed to be
protected. She remarked that it was a pot of money that
seemed to be attracting people to use the money for a
multitude of things merely because it was there and
capitalized. She read portions of how the fund had been set
up in statute:
As soon as practicable, after July 1 of each year the
commissioner of Revenue shall determine the market
value of the fund established in this section. On June
30th of the immediately preceding fiscal year, the
commissioner shall identify 7 percent of the amount,
as available for appropriation as follows: one-third
of the grant account established from which the Alaska
Commission on Postsecondary Education may award grants
and two-thirds for a scholarship account established
under Alaska statute, from which the Alaska Commission
on Postsecondary Education may award scholarships.
Representative Johnson elaborated that one statutory
section was for the WWAMI program, and one section was for
needs based education grants. She stated that the needs
based education grants the state was putting out were
$4,000 to $5,000 per year. She stressed that $4,000 to
$5,000 per year was half of the amount offered in the bill
to entice people to come home by paying money towards their
student loans. She highlighted that the HEIF was a percent
of market value (POMV) style account and currently, between
the House and Senate, the account was being overdrawn at 8
to 9 percent. She emphasized that the account had been
established to create higher education programs in Alaska
and to provide needs based grants for current residents
trying to get their education in Alaska. She stated that
the bill would overdraw the fund more than it had been to
give funding to entice people who had left Alaska to
return. She believed they needed to focus on residents. She
was also concerned about the health of the fund. She
remarked that there had been numerous bill proposals that
identified the fund as a fund source. She had a challenge
with spending money from the fund. She stated there was no
restriction on the use of funds, but it was not the reason
the fund was capitalized. She highlighted that at one point
the state did not have enough doctors, which was the idea
behind the WWAMI program. She was concerned the fund was
being drawn down. She stated the [bill's] intention was to
draw it down at double the rate of what was offered to low
income students who stayed in Alaska. She had a challenge
with spending money from an account that was not
overcapitalized. She thought low-income residents should be
the priority.
3:24:47 PM
Representative Story responded that she also wanted to
ensure the HEIF remained healthy. She shared that when she
began working on the bill, the APS had not yet been
modernized and there had been much more money and less
demand on the HEIF. She explained that one of the reasons
for targeting $1 million from the fund that had a current
balance of ~$400 million was that it was an amount the fund
could absorb. She took Representative Johnson's comments to
heart. She underscored the importance of protecting the
fund.
Co-Chair Josephson asked if the bill could apply to
graduate students as well.
Representative Story replied that it may be something that
needed to be worked out in regulation, but she had not
thought about the idea.
Co-Chair Josephson recalled that he had paid $254.56 per
month in student loans when he was 22 years old, which had
seemed scary at the time. He paid the monthly cost for
about five years and was forgiven about $15,000. He shared
that it had made his college tuition about half of what it
would have been at Whitman College in Washington. He
highlighted there was a connection that the bill that
individuals living out of state would have previously lived
in Alaska and if they were enrolled at the University of
Alaska Anchorage or the University of Alaska Fairbanks they
lived in Alaska. He believed Representative Story's point
was well taken that the pilot program would use $1 million
out of a $400 million fund. He recognized that the [HEIF]
fund had been tapped more for APS inflation adjustments. He
recalled the bill sponsored by Representative Justin
Ruffridge had been widely popular.
Co-Chair Josephson was struck by the fact that when he
started college in 1982, tuition plus room and board at
Whitman College was $8,900. The cost currently exceeded
$60,000. He read online that tuition at USC started at
$68,000. He stated that the bill was a meaningful amount of
money. He remarked that the inflation adjustment was a bit
problematic. Fundamentally, he viewed HB 28 as a good bill
because it was relatable and familiar to him. He likely
would not have needed the incentive to return to Alaska
because Alaska was all he knew. He added that it certainly
did not hurt to receive savings from his bachelor's degree
experience. The only difference was the bill focused on
public employees and teachers, which were needed. He
highlighted that the legislature did not know what would
happen with the defined benefit bill. Additionally, the
state had recruitment and vacancy factor problems. He liked
the bill.
3:28:41 PM
Co-Chair Foster highlighted the May 13, 5:00 p.m. amendment
deadline for HB 28 and HB 105.
Representative Story thanked the committee.
HB 28 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 73 CS WorkDraft FIN 050825 v.N.pdf |
HFIN 5/8/2025 1:30:00 PM |
HB 73 |
| HB 73 Legal Memo SC FIN v.N 050825.pdf |
HFIN 5/8/2025 1:30:00 PM |
HB 73 |
| HB 73 Public Testimony Rec'd by 050825.pdf |
HFIN 5/8/2025 1:30:00 PM |
HB 73 |