01/31/2001 08:04 AM House EDU
| Audio | Topic |
|---|
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON EDUCATION
January 31, 2001
8:04 a.m.
MEMBERS PRESENT
Representative Con Bunde, Chair
Representative Brian Porter
Representative Joe Green
Representative Peggy Wilson
Representative Gary Stevens
Representative Reggie Joule
Representative Gretchen Guess
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Bettye Davis
COMMITTEE CALENDAR
HOUSE BILL NO. 54
"An Act relating to reimbursement of student loans; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 37
"An Act relating to reimbursement of certain student loans; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 54
SHORT TITLE:STUDENT LOAN FORGIVENESS
SPONSOR(S): DAVIES
Jrn-Date Jrn-Page Action
01/10/01 0055 (H) READ THE FIRST TIME -
REFERRALS
01/10/01 0055 (H) EDU, HES, FIN
01/10/01 0055 (H) REFERRED TO EDU
01/12/01 0074 (H) COSPONSOR(S): KERTTULA
01/17/01 (H) EDU AT 9:00 AM HOUSE
FINANCE 519
01/17/01 (H) Heard & Held
01/17/01 (H) MINUTE(EDU)
01/31/01 (H) EDU AT 8:00 AM CAPITOL 106
BILL: HB 37
SHORT TITLE:STUDENT LOAN FORGIVENESS
SPONSOR(S): STEVENS
Jrn-Date Jrn-Page Action
01/08/01 0033 (H) READ THE FIRST TIME -
REFERRALS
01/08/01 0034 (H) EDU, HES, FIN
01/08/01 0034 (H) REFERRED TO EDU
01/17/01 (H) EDU AT 9:00 AM HOUSE
FINANCE 519
01/17/01 (H) Heard & Held
01/17/01 (H) MINUTE(EDU)
01/31/01 (H) EDU AT 8:00 AM CAPITOL 106
WITNESS REGISTER
REPRESENTATIVE JOHN DAVIES
Alaska State Legislature
Capitol Building, Room 415
Juneau, Alaska 99801
POSITION STATEMENT: Testified as sponsor of HB 54.
CHRISTOPHER L. ROBINSON
2613 McKenzie Drive
Anchorage, Alaska 99517
POSITION STATEMENT: Testified on HB 37.
DALE NELSON
409 West Twelfth Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 37.
BETH NORDLUND, Special Assistant
Office of the Commissioner
Department of Education and Early Development (EED)
801 West Tenth Street, Suite 200
Juneau, Alaska 99801-1894
POSITION STATEMENT: Testified on HB 37.
DIANE BARRANS, Executive Director
Alaska Commission on Postsecondary Education (ACPE)
Department of Education and Early Development (EED)
3030 Vintage Boulevard
Juneau, Alaska 99801-7109
POSITION STATEMENT: Answered questions and commented on HB 37.
MELISSA HILL
Alaska Teacher Placement
PO Box 756880
Fairbanks, Alaska 99775
POSITION STATEMENT: Her written testimony on HB 37 was read
into the record by Taran Keeler via teleconference from
Fairbanks.
ACTION NARRATIVE
TAPE 01-4, SIDE A
Number 0001
CHAIR BUNDE called the House Special Committee on Education
meeting to order at 8:04 a.m. Members present at the call to
order were Representatives Bunde, Porter, Stevens, Joule, and
Guess. Representatives Green and Wilson joined the meeting as
it was in progress.
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.]
HB 37 - STUDENT LOAN FORGIVENESS
CHAIR BUNDE announced the next order of business as HOUSE BILL
NO. 37, "An Act relating to reimbursement of certain student
loans; and providing for an effective date."
Number 0491
REPRESENTATIVE STEVENS explained Amendment 1, 22-LS0287\A.3,
Ford, 1/22/01, which read:
Page 1, line 7, following "undergraduate":
Insert "or graduate"
Number 0593
REPRESENTATIVE PORTER made a motion to adopt Amendment 1. There
being no objection, Amendment 1 was adopted.
REPRESENTATIVE STEVENS explained Amendment 2, 22-LS0287\A.5,
Ford, 1/25/01, which read:
Page 1, line 1:
Delete "reimbursement"
Insert "forgiveness"
Page 1, line 5:
Delete "Reimbursement of"
Insert "Loan forgiveness of loans made to"
Page 1, line 6:
Delete "reimburse"
Insert "forgive a loan made to"
Page 1, line 9:
Delete "reimbursed"
Insert "forgiven"
Page 1, line 10, following "payments":
Insert "to be"
Page 2, line 4:
Delete "reimbursed to the borrower"
Insert "forgiven the borrower under this section"
Page 2, line 6:
Delete "reimbursed"
Insert "forgiven"
Page 2, lines 8 - 11:
Delete all material.
REPRESENTATIVE STEVENS explained that this amendment would
forgive a portion of the student loan and would never be a
reimbursement.
Number 0669
REPRESENTATIVE GREEN made a motion to adopt Amendment 2, 22-
LS0287\A.5, Ford, 1/25/01. There being no objection, Amendment
2 was adopted.
REPRESENTATIVE STEVENS reiterated that this is a program that
would encourage Alaskans to stay and teach in Alaska. At a time
when students are required to take exit exams, the state needs
to have quality teachers available. There is a statewide
shortage of teachers, and there is no incentive to return to
Alaska. Other states are doing a lot to attract teachers. This
bill is not complete forgiveness of the student loan; it is 10
percent a year up to five years, and the students have to stay
for that entire period of time before they receive that
forgiveness.
Number 0777
REPRESENTATIVE GUESS asked Representative Stevens if a teacher
only stayed three years, would he/she receive any forgiveness.
REPRESENTATIVE STEVENS explained that the teacher has to teach
one full year and apply for forgiveness at the end of that year.
It is a year-for-year basis.
REPRESENTATIVE GUESS asked him if a student taught two years in
Alaska and then left the state, would he/she get the forgiveness
for only two years.
REPRESENTATIVE STEVENS agreed that was true.
Number 0920
CHRISTOPHER L. ROBINSON testified via teleconference. He is an
Alaskan educator and has been recruiting teachers to Alaska for
the past 19 years. He reminded the committee that teacher
recruiting in the Lower 48 has become intense in the last few
years. Alaska has been competing in this market with posters
that read: "Alaska, take us or leave us, but if you come, bring
your checkbook." In the last decade, teacher retirement
benefits have been reduced and become distinctly average in
adjusted compensation and require most new hires to come up with
perhaps $2,000 in fees and expenses their first two years in the
state. Interested prospects put out $100 just to get
information from the state recruiting service. If they do, they
are told if they really want a job they should spend another
$1,000 or so to come to the job fair. The informational
booklets are only $113, but "we do pay the postage." If they
were a used-car lot, the state would shut them down.
MR. ROBINSON said that though he does support HB 37 as amended,
he suggested two changes. First, he feels it takes too long.
Borrowers who complete training in spring 2002 will begin
teaching in Alaska in a year and a half would have only one year
of forgiveness incentive. A new teacher graduating this spring
and deciding where to work gets no incentive from the current
bill. He suggested that the bill be effective immediately,
provide full incentive beginning with this spring's graduates
and for former Alaskan borrowers who now teach out-of-state by
forgiving loans for those entering their first year of Alaska
teaching. Second, the shortage of special education teachers
and related service personnel is even more severe than the
teacher shortage. Related service providers are non-teaching
specialists who work in school district special education
programs providing mandated services such as speech and language
pathology, physical and occupational therapy, and interpreting
for the deaf. Special education related service personnel
should be included in this bill.
MR. ROBINSON referred to the fiscal note and said it could only
be a best guess at actual utilization. It appears to be a
policy decision more than an economic decision; the economics
are simply too uncertain. He wondered where the fiscal note is
in dollar costs, political costs, social costs for the status
quo. If the committee feels there needs to be a cost limit to
move this bill out of committee and through the two houses, he
urged the committee to consider 50 percent of loan forgiveness
up to an individual dollar cap. He reminded the committee that
the incentive needs to be persuasive in this market. He said
that 50 percent loan forgiveness for Alaskans barely scratches
the surface of what is needed. However, HB 37 as designed, if
it doesn't work, costs the state nothing; if it does work it
will cost the state only to the extent that it also benefits the
state.
Number 1144
DALE NELSON testified via teleconference. He is a registered
professional civil engineer in Anchorage, is in business for
himself, and has been an Alaskan resident since 1967. He is not
opposed to HB 37, but he wanted to suggest that the bill is
limited because teachers are not the only ones faced with
shortages. Scientists and engineers are also faced with
shortages. There is a continual shortage of graduate engineers
and high school students are leaving the state. He referred to
the Alaska Science and Technology Foundation's (ASTF) November
2000 report. This can be found on its web site. There needs to
be a similar consideration for engineers and scientists, and he
requested that that be considered in the bill. He noted a few
things contained in the ASTF report.
Number 1265
BETH NORDLUND, Special Assistant, Office of the Commissioner,
Department of Education and Early Development (EED), came
forward to testify. She reviewed some of the highlights from a
resolution in the committee's packets from the State Board of
Education & Early Development on Teacher Loan Forgiveness. The
Board sees the teacher shortage as a very serious issue. She
read:
Quality teachers and administrators are a crucial
component for raising student achievement;
Alaska is experiencing a statewide shortage of
teachers and administrators;
Teacher and administrator turnover is at best
disruptive and at worst disabling to education reform,
and an especially acute problem in rural Alaska;
States all across America are going to great lengths
to attract and retain teachers and administrators,
offering a wide variety of incentives; and
Alaska educational institutions currently only supply
Alaska's public K-12 schools with about 30 percent of
the teachers they need.
MS. NORDLUND referred to the document "Public School Funding
Formula Educational Adequacy" that was in the packets. She
highlighted the following portion under "Teachers":
Many states and outside school districts are offering
incentives such as: signing bonuses, down payments on
homes, mortgage subsidies, and student loan repayment
programs. Due to limited resources, Alaska school
districts continue to struggle to be competitive with
other states and outside school districts when
recruiting teachers.
MS. NORDLUND noted there is a listing in the packet of Examples
of Teacher Incentives Offered in Other States. Some of it is
loan forgiveness, but there is a wide variety of options. She
mentioned that the committee has already heard of the rumors
that are actually true. Certain states have come to Alaska's
job fairs looking to recruit Alaskan teachers with signing
bonuses. Alaska is in a severely competitive situation right
now.
MS. NORDLUND referred to page 9 of the "Public School Funding
Formula, Educational Adequacy" and read:
Demand for teachers in Alaska has already exceeded
supply, leaving unfilled positions across the state in
math, special education, and speech pathology. For
the 1999-2000 school year, 1.335 new teachers were
hired in Alaska. On the first day of school 84
teaching positions were still unfilled, and some
remained unfilled for up to two months. Districts
have actually been forced to hire teachers on
emergency certificates and teachers with minimal paper
qualifications.
Number 1419
CHAIR BUNDE asked Ms. Nordlund if the majority of teachers being
hired are non-residents.
MS. NORDLUND replied that Alaska's educational institutions are
only able to create about 30 percent of the teachers needed for
the work force, so the state has to rely on teacher preparation
programs from other states to supply Alaska with an adequate
amount of teachers.
CHAIR BUNDE asked if that meant if every Alaskan who graduated
was hired, would that still only be 30 percent of the need.
MS. NORDLUND answered exactly. If the educational institutions
are able to increase that capacity in the near future, at the
maximum, they will be able to increase it to provide one-third
of the teachers needed.
Number 1550
REPRESENTATIVE GREEN asked, "How many did we get of the
graduating class from Alaska?"
MS. NORDLUND said she didn't have those exact numbers but
thought the committee had heard testimony on that last week.
CHAIR BUNDE noted he was really trying to ask how many of
Alaska's teaching graduates are leaving the state.
REPRESENTATIVE STEVENS said another important figure would be to
know how many Alaskan students went to institutions outside of
Alaska and returned to teach.
REPRESENTATIVE WILSON pointed out that it is important to
realize that the salaries in Alaska are approximately equal to
those in the Lower 48. Eight years ago at the Fairbanks job
fair, there were 700 applicants; this year at that same job fair
there were only 70. Teachers aren't coming up from the Lower 48
like they used to.
CHAIR BUNDE commented that the majority of new teachers hired in
the smaller and rural schools are often non-residents.
Number 1638
REPRESENTATIVE JOULE said another piece of useful information
would be to find out what percent of the [rural] districts'
teaching staff are from the local area.
REPRESENTATIVE DAVIES remarked that there is also a shortage of
principals around the state. He wondered if they were included
in HB 37.
Number 1703
REPRESENTATIVE STEVENS explained that HB 37 does say: "is
employed at a public elementary or secondary school within the
state as a teacher," and he would interpret that as anyone who
is a certificated teacher, so that would include principals. It
would be full-time, certificated teachers, not substitute
teachers, whether they were serving as a classroom teacher or in
a special education situation or as a principal. He didn't
think it would apply to a lot of principals; normally students
who come back and get the student loan forgiveness would be
younger students entering the profession. Maybe it would apply
to a principal going back to graduate school, but he can't see
it applying to a large number.
CHAIR BUNDE suggested that if Representative Stevens wanted
administrators included, he should do some more research to
decide if that needed to be delineated more.
Number 1784
DIANE BARRANS, Executive Director, Alaska Commission on
Postsecondary Education (ACPE), Department of Education and
Early Development (EED), came forward to answer questions on HB
37. On behalf of the commission she applauded the efforts of
the members spending time on this issue. The ACPE is very
cognizant of this worker shortage in Alaska. She commented on
behalf of the Alaska Student Loan Corporation that is concerned
about any bill that would imply any obligation of the finances
of the corporation. As she understands the bill, the program is
subject to appropriation, and the corporation would be happy to
administer any funding that is available for a loan forgiveness
program.
MS. BARRANS provided some information on the past forgiveness
program for the general Alaska Student Loan (ASL) Program and
the current Teacher Scholarship Loan (TSL) Program. The ACPE is
currently preparing a brief report on the status of the TSL that
should be available within a week or so, and she will deliver
that to the committee members. However, there are two notable
statistics in looking at the Teacher Scholarship Loan Program:
1) over the 15 years that the program has existed and for those
participants who have left school, only 22.4 percent of them
have actually claimed one or more of the forgiveness benefits.
The Teacher Scholarship Loan Program that currently exists does
target rural schools. In order to qualify, program participants
have to earn their credential and then return to the rural
schools to teach. The 22.4 percent that have returned for at
least one year would represent the "success rate" for that
program.
Number 1898
REPRESENTATIVE GREEN asked Ms. Barrans if that means it is 22
percent of those who are in that program or 22 percent of the
total program.
Number 1907
MS BARRANS answered that the 22.4 percent is that percentage of
participants who are no longer in school, so the participants
who are still in school are not counted. Basically a little
more than one-fifth of those who have left school have actually
taught in a qualifying position. It is total program.
MS. BARRANS explained that the schools that qualify for [TSL]
forgiveness benefits are those defined in statute as rural; it
is a certain size community that is not on road or rail to
Anchorage or Fairbanks. Juneau, Ketchikan, Haines, Sitka,
Fairbanks, and Anchorage do not qualify. All other districts in
the state qualify if they hire these teachers.
Number 1952
REPRESENTATIVE GREEN asked: If this applies to the people who
are no longer in the program, is there a period of time they
have to teach in a rural school to qualify.
MS. BARRANS explained that to receive 100 percent forgiveness of
the loans, they have to teach for five years, but it is pro
rata.
MS. BARRANS said that another statistic that is of concern is
that cumulatively, 30 percent of the participants in this
program have defaulted on their loans. Why people don't pay
isn't often known; the participants have entered into their
contracts with a perception that they're not going to have to
pay back the loan. They may not do the analysis that they need
to or that can be expected from an 18-year-old to perform
whether or not they're really ready to succeed in college,
whether or not teaching is the only career that interests them,
and whether or not they're willing to return to a rural area and
teach. When passed through those three steps, the end result is
that 22 percent are prepared, do complete, and do return.
Anecdotally there are stories that it was very successful or it
wasn't successful, but those are the numbers.
CHAIR BUNDE referred to the time when there was universal
forgiveness for student loans if the person remained in the
state and said there was also an extremely high default problem.
The loan program had some other problems then, but from what Ms.
Barrans said, there appears to be a relationship between
forgiveness and the default problem.
MS. BARRANS said she thinks there is, and it is the expectation
of the borrower at the time of incurring the debt. A number of
problems contributed to that high default rate. She also
reported that the annualized rate calculated this month for the
Teacher Scholarship Loan has dropped to less than 8 percent
defaulting. The measures that the commission has taken to
address the default rate globally with student loans from the
state have also had an impact on these. A lot of that has to do
with the ability to collect through involuntary means including
the permanent fund dividend. She added that the general default
rate is just under 10 percent for the entire Alaska Student Loan
Program.
CHAIR BUNDE asked if the Teacher Scholarship Loan Program is
doing better than the general student loan program.
MS. BARRANS replied that that was correct.
Number 2092
REPRESENTATIVE JOULE asked: If very many people who have had
previous work experience apply for the scholarship program, is
there the same default rate with those people.
MS. BARRANS answered that the ACPE doesn't have a "bio-
demographic" statistic on these students. There hasn't been a
lot of time and effort put in on developing a data base that
"parses" them out in various degrees, so she can't respond to
that. The criteria for being in this program are graduating
from an Alaska high school and being nominated by a rural
district. In the early 90s when the commission saw the high
dropout rate from this program, it did make some connections
between the education departments at the University of Alaska
and the districts that nominate students. That may be one of
the contributing factors to the improving default rate with the
Teacher Scholarship Loan, but she can't precisely point to that
as one of the defining changes.
Number 2161
REPRESENTATIVE STEVENS clarified that his bill is not talking
about the Teacher Scholarship Loan Program. He noted it was
important to him to know that often in the Teacher Scholarship
Loan Program it is 17-year-olds who make that decision in their
junior year of high school to commit to four years of college
and a fifth year of graduate school to become teachers, so there
is a high default rate. He is not sure that the default rate of
the Teacher Scholarship Loan Program necessarily transfers to
the teachers under the regular student loan program in HB 37.
He said he didn't think there was any connection between the
22.4 percent rate of the Teacher Scholarship Loan Program and
what he is proposing.
CHAIR BUNDE noted that there is a broader issue that forgiveness
may encourage a mindset, and the committee just has to be
mindful of that.
MS. BARRANS told the committee that the question about the
efficacy of forgiveness is motivating behavior. When there was
50 percent forgiveness in the general program, only about 20
percent of the borrowers ended up benefiting from that. There
was an $84 million price tag for that 20 percent. Her point
would be if the objective is recruitment and retention, a
blanket loan forgiveness may not be the most effective approach.
Number 2262
TARAN KEELER read via teleconference from Fairbanks the written
testimony of Melissa Hill, Alaska Teacher Placement:
Thank you for allowing me the opportunity to testify.
Any effort the state can take that will increase in
the teacher recruitment effort is a positive one.
With NCATE [National Council for Accreditation of
Teacher Education] accreditation standards still in
progress and implementation of new degree programs not
yet in place, the "potential increase" of educators
will not adequately impact Alaska for at least another
3 to 4 years.
With the limited number of UA [University of Alaska]
teachers contributing to Alaska's hiring pool, I would
recommend that the committee consider implementing a
two- to three-year loan forgiveness program for
teachers coming from the Lower 48. Preference should
be given to those willing to teach in rural Alaska.
Many people remember when the Santa Clara California
School District attended the Anchorage job fair. They
were offering signing bonuses of $3,000 to any
applicants willing to sign a letter of intent.
Many Alaskan residents and UA graduates with special
education endorsement ended up leaving the state
specifically for that bonus to apply towards their
current loans.
As the statewide clearinghouse, Alaska Teacher
Placement serves as the first point of contact for
teachers seeking information on jobs in Alaska. Very
often the first questions we get are: What are the
incentives like? Does Alaska have a loan forgiveness
program? Many first year teachers are more than
willing to relocate to rural Alaska but are shopping
around for the best deal.
By district requests and the state's need to fill
vacancies, our services have been expanded to include
recruiting teachers in the Lower 48. ATP would
greatly benefit from the ability to market a program
that included teachers from the Lower 48. As a nearly
self-supported organization that relies on district
and registrant funding to maintain our budget, it is
essential that we have some marketing incentives such
as HB 37 to recruit educators for Alaska. Ten years
ago the incentives were: great salaries, excellent
retirement packages, and the adventure. Now we rely
on marketing the [permanent fund] dividend, adventure,
rich culture, and the beauty.
The facts are UA grads are producing only a fraction
of the need, and of that number only a fraction are
contributing to the hiring pool. In addition
endorsements in high demand areas, such as speech
pathology, are not offered through the university
system. We know the University is working hard to
expand programs and increase funding, but unless they
add additional programs such as speech pathology, the
state will have to continue to rely on students and
applicants from the Lower 48.
The need for teachers is now, and that is [why] I
strongly encourage you to consider extending the loan
forgiveness program, even if for a limited time, to
the students from the Lower 48.
REPRESENTATIVE PORTER commented that he thought Ms. Barrans was
politely trying to say: After diligence and perseverance and
finally getting the [student loan] fund into the black, if
you're going to do this again, for heaven's sakes, fund it.
TAPE 01-4, SIDE B
Number 2378
MS. BARRANS said she certainly wouldn't disagree with that.
CHAIR BUNDE asked Ms. Barrans to expand on the comment "previous
forgiveness programs seem to more reward those people who
already have chosen to stay in Alaska than it did recruit people
who had chosen to leave or had already left and brought them
back to Alaska."
MS. BARRANS said having thought about the rather low forgiveness
rate of 20 percent, people could have half of their loans
forgiven There are people with huge debts who didn't return to
Alaska. It strikes her that the things that motivate a person's
behavior, especially in a strong economy, are salary, living
conditions, and family connections. Her concern was that if
even modest amounts of funds are being put into programs that
would motivate behavior, it should be done in a way that would
affect that behavioral change. That was one piece of the
conversation with Chair Bunde. The other was that the people
who do default are the ones who can't afford to repay. They are
the ones who didn't complete their education, they are the ones
who, for whatever reason, did not achieve the credential, don't
have the economic power that those with degrees do.
MS. BARRANS indicated that the corporation and commission have
been working to reinvest resources to lower the cost of
borrowing for all individuals. That has been their focus
because they do understand that as the cost of the program went
up for those people less able to pay, they became increasingly
less able to pay. In five years the lending rate has come down
over a full percent from 9 to 7.8 percent, and ways are being
looked at to reduce costs for some of the existing loans.
Number 2249
REPRESENTATIVE PORTER asked Ms. Barrans if there is any
correlation in the failure rate between the students who
attended school outside and the ones who attended inside.
MS. BARRANS replied that the ACPE doesn't have a research
section but does periodic reviews so there isn't great data.
However, those that attended out-of-state default at lower
rates. She said she thinks there may be significant reasons for
that. If there was "bio-demographic" information, she thinks
they would find that those who are more mobile and are able to
go out-of-state are probably students from middle to upper
income; it's more expensive to go out-of-state. Many of the
schools they go to are extremely selective, so the academic
credentials of those students may statistically be higher,
therefore leading to success.
MS. BARRANS noted that those students also tend to be "lock-
step" students who have gone right from high school to college,
which means that probably one or both parents graduated from
college, and they are able to commit four or five years of their
lives to getting through. The average age of students who
attend the University of Alaska is somewhere in the late 20s to
early 30s, so these are people with other lives. Their ability
to go through a continuous education process is much more
limited. She emphasized that she doesn't want that statistic of
higher default rate to reflect poorly on the students that
attend in Alaska.
REPRESENTATIVE STEVENS said he wasn't sure he is hearing enough
information. He referred to what the chairman had said: that
previous plans have rewarded those who decide to stay and not
rewarded those who come in from the outside.
Number 2127
CHAIR BUNDE rephrased this thought. His impression is that
previous forgiveness programs were a reward for those who had
already decided to stay in Alaska and weren't a major factor in
influencing the decision to stay in Alaska.
REPRESENTATIVE STEVENS said he didn't know how that could be
proved. He would like some quantification of why Chair Bunde
would agree with that. He wondered if there were any statistics
that would agree with that statement.
MS. BARRANS noted that she agrees with Chair Bunde's statement.
"You can talk to a half dozen Alaskans who received these
benefits and perhaps get a half dozen different responses as to
how much that played a part in their decision to stay or return
to Alaska." She indicated that it was not a motivating factor
for her personally. The statistic she would point to is that
only one in five of the borrowers who had an option to receive
forgiveness benefits actually did during the years that it was
offered.
Number 2068
REPRESENTATIVE STEVENS said he just doesn't see the connection,
and maybe he is missing a fundamental point. He knows just as
many Alaskans who were educated outside and decided to come back
to teach in Alaska because of the forgiveness program. He
doesn't see how that can be quantified. He is not sure that
Chair Bunde's statement is true, and his experience would tell
him that it is not true.
CHAIR BUNDE said if only 20 percent are returning to Alaska and
there is a financial reward, he guesses it has limited impact on
people's choices where they live. It would be interesting to
know what percentage of loan recipients choose to locate in
Alaska after the forgiveness program went away, and maybe that
would show some level of effectiveness.
MS. BARRANS mentioned that the number of Alaskans who have
returned or remained in Alaska since the end of forgiveness has
actually increased. There are just other issues that persuade
where people locate. She is gathering that information in
response to questions from the House Finance Committee, and she
will share that information with this committee.
CHAIR BUNDE added he is certainly not anti-teacher. His point
is there are limited educational funds, and he'll make sure they
are spent where they have the greatest impact. The research
that he has looked at and his legislative experience show him
that the one factor that has the greatest impact on educational
success for young people is a caring and talented teacher, way
beyond class size and computers. He wants to encourage good
teachers, and his questions are just focused on what is the best
way to invest the limited resources.
Number 1935
REPRESENTATIVE GREEN wondered if there is a way to find the
number of people who are staying and also plot that against the
comparative salary for Alaska teachers and outside teachers. Is
it the incentive of loan forgiveness, or is it the relative
degree of compensation? At one time Alaska had among the
highest paid teacher salaries and now does not. Is it going to
change because of this incentive, or is it strictly
compensation?
MS. BARRANS answered that this is getting out of her arena and
she deferred to the people at EED. She commented that since
these issues have come up nationwide, she has been paying
attention to the types of strategies that states are developing.
There is not a single element; there are strategies that look at
what teachers want. Do they want assured housing? Do they want
assistance buying a home? Do they want a salary at a certain
level? Certainly loan assumption or forgiveness is a piece of
that, but it is one piece of a package that's aimed at being
effective. She doesn't want her comments to be perceived as
negative. They are just questioning whether or not a single
piece can have the effect. If a single piece is going to be
invested in and there isn't some assurance that it will be
effective, how valuable is that investment?
Number 1814
MS. NORDLUND came forward to address Representative Green's
question. She referred to the "Public School Funding Formula
Educational Adequacy" handout and said there is an interesting
analysis of teacher's salaries in that report. She read a
paragraph on page 10:
As recently as 1989 Alaska was reported to have the
highest average teacher salaries in the nation.
According to the NEA [National Education Association],
Alaska's average teacher salary in 1989 was $42,818.
In 1999, Alaska is reported to have slipped to number
eight in the nation with an average teacher salary of
$48,085. The average teacher salary in Alaska has
increased about 12.3 percent for the past ten years,
but when stated in constant dollars to reflect
inflation it has decreased by approximately 11.7
percent.
MS. NORDLUND explained that there is a table in this report that
talks about the increases in teacher salaries, she believes, in
constant dollars in the Lower 48. There has been a dramatic
change in teacher salaries. What other states are doing to
recruit teachers and the competitiveness of Alaska has certainly
decreased in that area.
REPRESENTATIVE GREEN commented that he would assume that this
same decrease through cost in current dollars has affected
teachers in the rest of the nation.
MS. NORDLUND referred to the chart in the report and pointed out
that teacher salaries have increased substantially in other
states due to the teacher shortage.
Number 1728
REPRESENTATIVE GREEN wondered if that is comparing across the
board about total salaries then those would probably have had to
been reduced by inflation just like the Alaska salaries.
MS. NORDLUND answered that she thinks it is comparing "apples to
apples." Even in constant dollars there has been an increase.
She suggested that the committee go back and look at the chart
to see what is happening in other states, but to her knowledge
there has actually been a significant increase. She has some
anecdotal information. It is reported that in the school reform
efforts this year, California is going to spend $30 million just
to attract algebra teachers to the profession. A lot of
innovative things are happening especially as schools embark on
standards.
REPRESENTATIVE PORTER mentioned that this same phenomenon has
happened in the Anchorage Police Department and Alaska State
Troopers, which used to be the two highest paid law enforcement
agencies in the United States; they are not anymore. "When we
had that amount of money, we paid it; when we don't, we can't."
Number 1629
REPRESENTATIVE STEVENS expressed concern that it is so easy to
make a statement that could hang in the air forever and poison
any further consideration of this. The one statement, "this
program will reward those who already decided to come back to
Alaska," he doesn't think is true, and he thinks if the
department does, he would like to see something in writing, some
specifics, not just a generalization. "We all have anecdotal
information; we can all say people we know have or have not made
the decision, but yet you have made that statement, and I would
like to see something in writing to show that it is true." He
asked if that was possible.
MS. BARRANS replied that she will have to look at the numbers
that are available. She repeated that her office doesn't have
research staff, so it means taking staff off programmatic
projects to put them on that sort of data collection project.
She can characterize that [statement] as being her experience.
If she needs to put some borders around that to limit its
impact, she can do that. She is not certain her office has
statistics. There is very little unit tracking of these
individuals. One way to look at it is to say the reason the
borrowers didn't claim forgiveness is it isn't known whether
they got their degree or not. There are two criteria: they had
to complete their program and return to Alaska.
MS. BARRANS said her point would be that if somebody had to do
just these two things to get the cash benefit, and only one in
five did, it was only motivating 20 percent of the people who
had that motivation available to them. She can provide that
statistic in writing and would be happy to do that, but as far
as having detailed surveys of these people to find out why they
did what they did, that's probably not readily available without
investment of time and money.
REPRESENTATIVE STEVENS said he understood what she was saying
and he is not asking her to go to a lot of work for this. It is
probably something that is not provable. It seems to him it's a
new world out there, entirely different than it was 20 or 30
years ago. There has been testimony that young teachers are
shopping around for the best deal, which is absolutely true.
They have large bills to pay, so they need to look at things
like loan forgiveness and the cost of living and other things.
This is just a piece of the package; it's not the whole answer.
Number 1466
REPRESENTATIVE JOULE referred to the "Examples of Teacher
Incentives Offered in Other States" and wondered if this
information was compiled by districts. He wondered what it
would take for Alaska to be competitive in this market.
MS. NORDLUND answered that in looking at the incentives offered
in other states, it looks generalized, but it isn't known
whether any of these are purely district initiatives. She
imagined that other state legislatures are really going to these
types of measures and making statewide policies. It is not
reflected in this list, and she cannot actually speak to the
details. She believes that they are state policies, and that is
why they are listed this way.
CHAIR BUNDE indicated that the committee may want to consider
how much difference will it take to make a difference. He
asked: What kind of reasonable return can we expect on the
investment.
MS. NORDLUND added that the State Board of Education doesn't see
loan forgiveness as the one answer to the teacher shortage. It
has embarked upon other initiatives to try to attract teachers,
but this one is especially in their minds as part of a package.
The board has decreased teacher certification fees by half in
the past few months. The board has also sought out those
teachers around the nation who have national board certification
to try to get them to come to Alaska; those are very high
quality teachers and the board would like to offer free
certificates to those people. The board is also working on a
number of other initiatives, but this one is obviously a nice
financial one.
CHAIR BUNDE commented that many people came to Alaska in the
past to see the other side of the world, and now the children
want to see other parts of the world and leave. He said he
doesn't see the fact that the children choose to leave as an
indictment of Alaska's educational system; it's more just
curiosity.
REPRESENTATIVE PORTER related that his family is a good example
of the local versus non-local phenomenon. He has three
children, two of whom went to college outside and now live
outside; the third attended the University of Alaska Anchorage
and now lives in Anchorage. He believes that is the most
significant statistic.
Number 1230
REPRESENTATIVE JOULE referred to the document from EED and read:
A tax exemption or signing bonuses may not be the
right answer here. But when states from New York to
California are wading into a teacher bidding war, we
[Oregon] had better offer something more than scenery.
He commented that statement was from Oregon, but it does
highlight the whole situation as it relates to trying to draw in
teachers.
MS. BARRANS asked: If a loan forgiveness program was
established, would the commission have authority to set
prioritization for the funds in times when funding may be
inadequate to forgive all the loans that may have people seeking
forgiveness, or would that be something that the EED could be
charged with since that is its area of expertise?
CHAIR BUNDE agreed that was an excellent question. He guessed
that the legislature would want to "get their hands all over
it." Another response to "there isn't enough money" is to ask
for a supplemental. "If the interest is that intense and then
we in our wisdom can say no, you don't get anymore and then you
have to prioritize on first come, first served. I guess you'd
get 60 different answers from 40 different legislators."
Number 1073
REPRESENTATIVE STEVENS clarified that it wasn't the intention of
his bill to gut the Teacher Scholarship Loan Program or to make
it no longer available. He sees this as a change to the regular
student loan program, but the teacher loan program will
continue. This would have no impact on that, so still the rural
students could apply for the teacher loan program. He asked Ms.
Barrans if she saw this in any way a deterioration to the
Teacher Scholarship Loan Program.
MS. BARRANS replied no, not at all. Her concern was in a
shortage of funding in this particular program, if there are
teachers who are not TSL participants but who borrowed the ASL
and they are willing with some incentive to go into some of
these areas, but there isn't sufficient funds, how is it decided
which teachers receive the forgiveness benefit when there is
$50,000 available and the demand is $200,000.
CHAIR BUNDE asked: Should we simply reward those people who
choose to go there or shall we try to pay them enough to want to
go there?
Number 0996
REPRESENTATIVE STEVENS said that has not been addressed in his
bill, and he doesn't attend to address it. He thinks the TSL is
a good program that will encourage students to teach in the
rural areas. This is a way to level the playing field and
encourage not only people to teach in the Bush but also to teach
in urban areas as well.
CHAIR BUNDE announced the committee would take up the three
bills on student loan forgiveness next Wednesday and look to
find the appropriate thing to do. [HB 37 was heard and held.]
ADJOURNMENT
Number 0897
There being no further business before the committee, the House
Special Committee on Education Committee meeting was adjourned
at 9:25 a.m.
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