01/31/2001 08:04 AM House EDU

HB 54 - STUDENT LOAN FORGIVENESS                                                                                              
                                                                                                                                
CHAIR BUNDE announced  the first order of business  as HOUSE BILL                                                               
NO. 54, "An  Act relating to reimbursement of  student loans; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
Number 0160                                                                                                                     
                                                                                                                                
REPRESENTATIVE  JOHN  DAVIES,   Alaska  State  Legislature,  came                                                               
forward to  present a committee  substitute (CS)  for HB 54.   He                                                               
has gotten a  lot of support for  HB 54, but there  was a certain                                                               
amount  of  "sticker  shock"  associated  with  the  fiscal  note                                                               
attached to the  first version.  In order to  accomplish the same                                                               
thing  with a  lower  fiscal  impact, he  had  this CS  prepared.                                                               
Instead of offering loan forgiveness,  it offers an interest rate                                                               
reduction.    He  understood  that  this  could  be  accomplished                                                               
without a direct general fund  subsidy.  It would probably impact                                                               
any  dividend that  the student  loan  program would  pay to  the                                                               
general fund,  so there is a  fiscal impact, but it  is much less                                                               
than the original version.                                                                                                      
                                                                                                                                
REPRESENTATIVE DAVIES said  that one of the impacts  of this bill                                                               
seems to  be if there is  a message that Alaska  cares and remind                                                               
people that  there are  some small advantages  to staying  in the                                                               
state, it will  remind people that there  are opportunities here.                                                               
He  talked to  one student  who hadn't  thought about  staying in                                                               
Alaska  after  finishing  school,  but after  reading  about  the                                                               
student loan  forgiveness in the  paper, she made some  calls and                                                               
found some  job offers  in Anchorage.   Just  the fact  that this                                                               
program is advertised  will have a positive effect.   The way the                                                               
proposed CS  is structured, it  will continue to have  an effect;                                                               
the interest rate  reduction would apply as long as  the loan was                                                               
out and the student was in Alaska.                                                                                              
                                                                                                                                
Number 0390                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN made  a motion to adopt the  proposed CS for                                                               
HB  54, version  22-LS0174\C,  Ford, 1/30/01,  as  a work  draft.                                                               
There  being  no  objection,  proposed CSHB  54  was  before  the                                                               
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  BUNDE announced  that  the  committee would  hold                                                               
proposed  CSHB 54  along  with  the two  other  bills related  to                                                               
student loan forgiveness and hear all three of them next week.                                                                  
                                                                                                                                
REPRESENTATIVE  JOULE  asked  about   the  fiscal  note  for  the                                                               
proposed CS.                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAVIES said he hoped to have it by next week.                                                                    
[HB 54 was heard and held.]