Legislature(2021 - 2022)DAVIS 106
04/23/2021 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB132 | |
| HB164 | |
| HB114 | |
| HB132 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 114 | TELECONFERENCED | |
| += | HB 164 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 132 | TELECONFERENCED | |
HB 114-EDUCATION & SUPPLEMENTAL LOAN PROGRAMS
9:26:18 AM
CO-CHAIR DRUMMOND announced that the next order of business
would be HOUSE BILL NO. 114, "An Act relating to the education
loan program and Alaska supplemental education loan program; and
providing for an effective date."
9:26:25 AM
SANA EFIRD, Executive Director, Alaska Commission on
Postsecondary Education, introduced HB 114 on behalf of the
House Rules Standing Committee at the request of the governor.
She said the Alaska Commission on Postsecondary Education (ACPE)
supports access to postsecondary education; the Alaska Student
Loan Corporation (ASLC) operates as an enterprise agency of the
State of Alaska, funding and facilitating the Alaska Student
Loan Program. She then detailed the sectional analysis, which
read as follows [original punctuation provided]:
Section 1:
Amends AS 14.43.122(b), Consolidation of loans, by
expanding the population eligible to apply for Alaska
Refinancing Loans to include previous Alaska borrowers
and graduates from Alaska high schools and
postsecondary institutions, as well as current Alaska
residents.
Section 2:
Amends AS 14.43.173(a), Loan award maximums; use of
loan award, by eliminating the loan maximums in
statute and providing for the Alaska Student Loan
Corporation (Corporation) to set the annual loan
maximums.
Section 3:
Amends AS 14.43.173(b), Loan award maximums; use of
loan award, by eliminating lifetime loan maximums in
statute and providing for the Corporation to set
lifetime loan maximums.
Section 4:
Amends AS 14.43.173(d), Loan award maximums; use of
loan award, with a conforming change to allow the
Corporation to set loan limits for both half-time and
full-time loans.
Section 5:
Amends AS 14.43.175, Repayment of loans, by providing
for the Alaska Commission on Postsecondary Education
to offer future student loan borrowers a loan program
with immediate repayment requirements.
9:32:15 AM
CO-CHAIR DRUMMOND asked Ms. Efird to clarify whether immediate
repayment would mean avoiding interest.
MS. EFIRD replied that interest is normally deferred while
students are in school, and capitalized when students start
making payments six months after graduation. The proposed
legislation, she said, would allow students to pay interest up
front so it's not capitalized into the end amount, thereby
lowering the total cost of the loan.
CO-CHAIR DRUMMOND asked whether "immediate repayment" means
right after closing on a loan.
MS. EFIRD replied that is correct.
9:33:34 AM
REPRESENTATIVE STORY asked whether immediate repayment would be
mandatory.
MS. EFIRD replied that it would be an option.
9:33:50 AM
MS. EFIRD said the proposed legislation would respond to
requests from students and Alaska's higher education community,
and that it would enhance the ability to meet the financial aid
needs of student loan borrowers, allow responsible increases to
annual loan limits, and amend the repayment program to assist
borrowers in keeping overall costs down. She said the changes
are intended to positively impact ASLC in offering economies of
scale and provide the lowest interest rates possible.
9:35:11 AM
LEE DONNER, Regional Managing Director, Hilltop Securities,
testified in support of HB 114, sharing that Hilltop Securities
has served as a financial adviser to ASLC since 2007. He
explained that almost all student loan programs throughout the
country require two eligibility standards. Residency is one
eligibility standard, he said; the other eligibility standard,
he said, is having attended school within the state, which he
noted is an unusual standard. He said the proposed legislation
is not likely to result in a large expansion in a program, and
he noted that it would be limited to refinanced loans instead of
loans initially held by current students. Because the loans
have been refinanced, he said, the proposed legislation would
not pose a credit risk due to the borrowers having established a
post-college credit history. He said HB 114 would bring
Alaska's loan refinancing standards more into line with other
programs that Hilltop Securities advises. Ms. Donner said the
immediate repayment option improves payment performance and
lowers loan delinquency and default. Those who take advantage
of the immediate repayment option not only enjoy a lower loan
cost, he said, but they also perform better overall than those
who don't.
9:41:43 AM
MS. EFIRD pointed out that HB 114 has a zero fiscal note.
[HB 114 was held over.]