04/06/2000 03:36 PM Senate STA

           SB 270-STUDENT LOAN CORP PAYMENTS TO STATE                                                                           
                                                                                                                                
MS. DIANE BARRANS, Executive Director for Alaska Commission on                                                                  
Postsecondary Education, stated support for SB 270.  Changes to the                                                             
Alaska Student Loan Program in recent years have resulted in an                                                                 
annual net income.  The program goals are to continue in a                                                                      
direction of fiscal strength and good credit standing, to continue                                                              
to reduce the cost of borrowing for Alaska residents, to continue                                                               
to reduce the corporation's equity deficit, currently at $43                                                                    
million, and to propose a mechanism that makes possible a return of                                                             
contributed capital to the corporation's original financing source;                                                             
the State of Alaska.                                                                                                            
                                                                                                                                
In 1999, the program's improved financial standing was rewarded by                                                              
a double A upgrade.  The interest rate on the 2000/2001 State                                                                   
student loan was reduced to 8 percent.  The interest free borrowing                                                             
policy while students are attending school remains intact, and the                                                              
corporation's equity deficit has been reduced by $7 million over                                                                
the last two years.                                                                                                             
                                                                                                                                
SB 270 provides that in any year the corporation has a $2 million                                                               
net income, the board will declare return of capital payment to the                                                             
State between 10-35 percent of the income amount.  SB 270 has                                                                   
received support from the House and Senate.  Ms. Barrans referred                                                               
to graphs produced by the program.                                                                                              
                                                                                                                                
Number 329                                                                                                                      
                                                                                                                                
SENATOR WILKEN stated the graphs should show more previous years,                                                               
and the graphs are an indication the program is doing great work.                                                               
                                                                                                                                
VICE CHAIR GREEN stated SB 270 would be held in committee.