03/31/2010 09:00 AM Senate FINANCE

SENATE BILL NO. 33                                                                                                            
                                                                                                                                
     "An Act creating a postsecondary scholarship grant                                                                         
     program for Alaska residents based on high achievement                                                                     
     and financial need."                                                                                                       
                                                                                                                                
9:06:41 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman MOVED to ADOPT CSSB 33 (FIN), labeled 26-                                                                      
LS0219\W, Mischel, 3/31/10.                                                                                                     
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
Senator Ellis, sponsor, shared the following information:                                                                       
                                                                                                                                
     I originally introduced Senate Bill 33 in 2006 as the                                                                      
     Alaska Achievers Incentive Program.                                                                                        
                                                                                                                                
        o Worked with student leaders                                                                                           
                                                                                                                                
        o Gained sponsorships from Senators Thomas,                                                                             
          Paskvan, Stevens, and McGuire                                                                                         
                                                                                                                                
        o Endorsed by the Taylor Foundation, Juneau                                                                             
          Assembly, and Fairbanks Assembly                                                                                      
                                                                                                                                
        o Original bill created a hybrid need and merit                                                                         
          based scholarship that would have provided at                                                                         
          least $1,000 per year to high achieving students                                                                      
          with financial need.                                                                                                  
                                                                                                                                
                                                                                                                                
     The governor's introduction of the GPS legislation                                                                         
     this past summer elevated the issue, and I am very                                                                         
     pleased to see the slate of policy options that we                                                                         
     will be discussing today.                                                                                                  
                                                                                                                                
        o Over the past 8 months, I have been engaged in                                                                        
          many conversations with my legislative                                                                                
          colleagues, financial aid experts from the                                                                            
          University of Alaska and around the country, and                                                                      
          hundreds of students and parents.                                                                                     
                                                                                                                                
        o Although I am a strong supporter of the concepts                                                                      
          expressed by the governor in his bill, I am also                                                                      
          very concerned about the implementation of the                                                                        
          bill, as well as the opportunity to get something                                                                     
          passed this year.                                                                                                     
                                                                                                                                
       o SB 33 addresses those concerns in ways that                                                                            
          reflect the many conversations I have had over my                                                                     
          years of involvement in this issue.                                                                                   
                                                                                                                                
             ƒI call this new version of SB 33 the                                                                             
               AlaskAdvantage Grant and Loan Forgiveness                                                                        
               Program.                                                                                                         
                                                                                                                                
     AlaskAdvantage Grant and Loan Forgiveness Program                                                                          
                                                                                                                                
        o Adds a loan forgiveness component to the existing                                                                     
          AlaskAdvantage Grant Program.                                                                                         
             ƒStudents who were eligible for                                                                                   
               AlaskAdvantage Grants can receive funds to                                                                       
               forgive loans made through ACPE for up to                                                                        
               four years after graduation if they attend                                                                       
               Alaska institutions and remain in Alaska.                                                                        
                                                                                                                                
             ƒGPS is fully scholarship based, which                                                                            
               rewards students on potential rather than                                                                        
               performance.                                                                                                     
                                                                                                                                
        o Maintains the emphasis on priority career tracks                                                                      
          (a concern of Senator Huggins)                                                                                        
                                                                                                                                
             ƒIncreased grant amounts for students in                                                                          
               preparation for hard-to-fill jobs.                                                                               
                                                                                                                                
                  · Currently allied health,                                                                                    
                    community/social service, teaching, and                                                                     
                    natural resources extraction/support                                                                        
                                                                                                                                
                       o See article in your packet re:                                                                         
                         workforce shortage for pipeline                                                                        
                                                                                                                                
             ƒFor loan forgiveness, graduates must be                                                                          
               employed in those fields for increased                                                                           
               awards.                                                                                                          
                                                                                                                                
             ƒGPS does not have any emphasis on developing                                                                     
               Alaska's workforce.                                                                                              
                                                                                                                                
        o Adds a merit-based priority                                                                                           
                                                                                                                                
             ƒIncreased grant amounts for students who are                                                                     
               performing at a high level in college.                                                                           
                                                                                                                                
             ƒFor loan forgiveness, increased award                                                                            
               depends on final GPA.                                                                                            
                                                                                                                                
        o Updates the award amounts to reflect today's cost                                                                     
          of higher education.                                                                                                  
                                                                                                                                
             ƒMinimum annual award of $1,000, maximum                                                                          
               annual award of $5,000.                                                                                          
                                                                                                                                
             ƒTotal lifetime cap (whether received in                                                                          
               grants or loan forgiveness) of $20,000 per                                                                       
               student.                                                                                                         
                                                                                                                                
             ƒStructure allows the Legislature through                                                                         
               appropriations process to manage the cost,                                                                       
               in contrast to GPS which is set up as an                                                                         
               entitlement in which programs drive costs.                                                                       
                                                                                                                                
        o Other GPS concerns addressed by AlaskAdvantage                                                                        
          Grant and Loan Forgiveness                                                                                            
                                                                                                                                
             ƒNon-traditional students - continuing                                                                            
               education, workers changing careers, older                                                                       
               first-time students - are ineligible for                                                                         
              GPS, but qualify for this bill.                                                                                   
                                                                                                                                
             ƒMany rural students are disqualified for the                                                                     
               GPS by the curriculum requirements that are                                                                      
               not available in 20% of Alaska high schools.                                                                     
                                                                                                                                
                  · Those requirements also create an                                                                           
                    unfunded mandate of uncertain cost on                                                                       
                    local school districts and REAA's.                                                                          
                                                                                                                                
Senator Ellis listed several options if no bill can pass:                                                                       
                                                                                                                                
        o Fund existing AlaskAdvantage Grant Program -                                                                          
          currently receiving no General Fund.                                                                                  
                                                                                                                                
        o Fund existing UA Scholars Program - currently                                                                         
          receiving no General Fund.                                                                                            
                                                                                                                                
        o Task    force    to    continue    studying    the                                                                    
          transformative   scholarship   concepts   in   the                                                                    
          Governor's Scholarship Program                                                                                        
                                                                                                                                
9:12:36 AM                                                                                                                    
                                                                                                                                
MAX  HENSLEY, STAFF,  SENATOR  JOHNNY  ELLIS, dispelled  the                                                                    
idea  that this  legislation  was the  old loan  forgiveness                                                                    
program. There are several  significant differences: it only                                                                    
includes  students  who  attend  college  in  the  state  of                                                                    
Alaska,  it  has a  limited  cost,  and  it is  more  easily                                                                    
tracked  because it  is limited  to loans  made through  the                                                                    
state's loan programs.                                                                                                          
                                                                                                                                
Mr. Hensley reported on the sections of the bill:                                                                               
                                                                                                                                
        · Section one amends the purpose of the                                                                                 
          AlaskAdvantage Grant Program to include loan                                                                          
          forgiveness.                                                                                                          
        · Sections 2, 3, and 9 are conforming amendments to                                                                     
          add 'loan forgiveness' to the title of the                                                                            
          chapter.                                                                                                              
                                                                                                                                
        · Section 4 defines the size of the program, set at                                                                     
          $10M annually in this draft.                                                                                          
                                                                                                                                
        · Section 5 extends the current priority for career                                                                     
          tracks and adds a merit-based priority for                                                                            
          students with a GPA over 3.0, with a higher                                                                           
          priority for students with a GPA over 3.5.                                                                            
                                                                                                                                
        · Section 6 outlines the qualifications for loan                                                                        
          forgiveness - Alaska resident, graduated from                                                                         
          Alaska higher education, in good standing on                                                                          
          their repayment.                                                                                                      
                                                                                                                                
        · Sections 7 and 8 set the level of awards per                                                                          
          student.                                                                                                              
                                                                                                                                
9:16:02 AM                                                                                                                    
                                                                                                                                
Senator   Thomas  asked   how   the   allocation  for   loan                                                                    
forgiveness and/or grants is made  to eligible students. Mr.                                                                    
Hensley  clarified  that the  decision  is  left up  to  the                                                                    
Commission on  Postsecondary Education. The  current program                                                                    
places the  highest priority on  the students with  the most                                                                    
need. Senator Thomas spoke in  support of the changes in the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
9:17:08 AM                                                                                                                    
                                                                                                                                
Senator  Olson   asked  about  the  fiscal   note  from  the                                                                    
Department  of Revenue  for $25,000.  Mr. Hensley  said that                                                                    
fiscal note refers  to the previous version of  the bill and                                                                    
there wasn't a new note yet.                                                                                                    
                                                                                                                                
9:18:03 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  noted two old  fiscal notes  which require                                                                    
updating.                                                                                                                       
                                                                                                                                
Senator Ellis thanked the committee for hearing the bill.                                                                       
                                                                                                                                
SB  33  was   heard  and  HELD  in   Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
AT-EASE        9:19:07 AM                                                                                                     
RECONVENED     9:22:10 AM