Legislature(1999 - 2000)
02/08/1999 01:37 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
HOUSE BILL NO. 27
"An Act relating to graduate student loans; and
providing for an effective date."
Co-Chair Mulder, Sponsor explained that he introduced HB 27
as a response to comments by his constituents. In the past,
the state of Alaska secured positions in the Western
Interstate Commission on Higher Education (WICHE) program as
a direct grant program. In 1997, the state of Alaska decided
that it could no longer afford the grant process. Under the
WICHE program students are allowed to pursue degrees in
selected programs in other state institutions. Student fees
are at a reduced rate. Rates are either at the in-state rate
or at a reduced out-of-state rate. The program helps reduce
costs and secure positions at other WICHE schools. Students
are allowed opportunities to get degrees at a greatly
reduced rate.
Co-Chair Mulder explained that the original legislation was
amended in the House Health, Education and Social Services
Committee. He observed that repayment of the loan portion
was in AS 14.44.040. Legislative Legal Division drafters
felt that the program should be placed in AS 14.44.030. The
committee substitute incorporates this technical change.
Representative Bunde expressed support for the legislation.
He observed concerns by students regarding opportunities to
enter into programs at WICHE institutions. He maintained
that students are willing to repay the state of Alaska for
the cost of their education if they have the opportunity for
a seat in the program.
In response to a question by Representative Bunde, Co-Chair
Mulder explained that the department would set appropriate
fees under section 3 on page 3. He did not know the interest
rate.
In response to a question by Co-Chair Therriault, Co-Chair
Mulder reviewed the changes made by HB 27. Sections 1 and 2
relocate the program to AS 14.44.030. The changes proposed
by Co-Chair Mulder are incorporated in sections 3, 4, and 5.
Section 6 is the effective date.
Co-Chair Therriault observed that the state used to
negotiate with Washington, Alaska, Montana, Idaho Medical
Education Program (WAMI) schools for the number of spots
that would be reserved for Alaskan students.
DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION
COMMISSION, DEPARTMENT OF EDUCATION provided information on
HB 27. She noted that the Commission did not have a position
because it had not yet reviewed the legislation. She pointed
out that the Commission is supportive of an effort to
increase access. She observed that the legislation would
increase access. The mechanism will remain the same. The
WICHE administrative office would continue to manage the
program. Students would apply with the Commission for
certification in the Professional Student Exchange Program.
The Commission acts as a conduit for Alaskan residents to
get their name into the WICHE pool for the schools that
participate. The WICHE administrative staff would negotiate
what the support fee would be in each field. Students would
have to sign a contract agreeing to pay the support fee plus
interest. The Commission sets the fee and the students sign
a promissory note. There would be a direct transmittal
through the WICHE administrative offices to the institution.
The range of fees would be between $7,000 per year for a
three-year program, or $15,000 for a four-year program. The
fifteen fields available are divided into two categories;
those that need WICHE support to get the WICHE slot and
those fields of study that do not require WICHE support for
entry. Support would be focused on fields that require
WICHE support. This is the area of greatest need.
In response to a question by Representative J. Davies, Ms.
Barrans explained that there may be as many as 7 schools
participating in the physical therapy program. If a student
were admitted to the Professional Student Exchange Program,
in the North Dakota or California programs they would pay
that state's resident rate plus the support fee. The support
fee would be constant. The WICHE staff, based on a range of
differentials, negotiates the support fee. For some schools
it is in excess of the non-resident rate. The benefit for
the student would vary depending on which program they
attend. Ms. Barrans explained that students would not be
considered for admission to some programs, except as a
certified WICHE student. The surcharge that the student pays
in some schools provides them consideration and admission
into the program.
In response to a question by Representative J. Davies, Ms.
Barrans explained that students must be a one-year resident
of the state of Alaska in order to apply for certification
in the program.
Representative Bunde noted that Alaska has maintained its
membership in the program even though the program was not
funded. Ms. Barrans confirmed that the state of Alaska
maintained its membership fees. She observed that Alaskan
students have continued to participate in the Western
Regional Graduate and Undergraduate exchange. She observed
that 800-900 Alaskans participate annually. These benefits
are available as a member state.
Representative Bunde questioned if the reluctance to embrace
loans has been addressed.
Ms. Barrans noted that the WICHE Commission has not been
notified of Alaska's return to the program. If HB 27 is
adopted the program would operate under new terms. She
anticipated that the Commission would restate concerns that
students are incurring debts without the opportunity for a
service obligation that would allow them to retire the debt
through service in the state. She observed that the
Commission recognizes that, due to Alaska's economic
condition, the program can only operate under these terms.
In response to a question by Representative Bunde, Ms.
Barrans explained that each institution retains its ability
to decide admissions.
Representative Bunde observed that there is a zero fiscal
note attached to the legislation. Ms. Barrans explained that
there is no forgiveness attached to the legislation.
Co-Chair Mulder acknowledged that it is the desire of the
WICHE Council to have a forgiveness clause. He pointed out
that the state forgiveness would be $500 to $750 thousand
dollars a year, if half of the participating students
returned to the state to reduce their obligation. He pointed
out that there are fiscal restraints.
Representative Mulder MOVED to report CSHB 27 (HES) out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
CSHB 27 (HES) was REPORTED out of Committee with a "do pass"
recommendation and with a fiscal impact note by the
Department of Education, dated 2/8/99.
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