TAPE 94-40, SIDE A Number 000 CHAIR BUNDE called the meeting to order at 3:08 p.m., noted members present and announced the calendar. He then read portions of an article from the Anchorage Daily News regarding students and student loans. He indicated that collectively students in the United States owe $41.9 billion on student loans. He said in many schools 70% of the student body choose to borrow, and the average debt per student is $79,000. He further related that in a survey of 551 recent college graduates, four out of ten students said they could handle their payments; however, one out four said their debt affected their decision as to when or if to marry. One-third stated that it also influenced their decision to start a family, and four out of ten work at two jobs or more because of their debt. He further stated that 1/4 said their loans have caused them to live with relatives and 35% said they have postponed needed health care because of their debt. He also said that 13% said they were forced to drop out of school because of their debt. (CHAIR BUNDE stated for the record that Rep. Nicholia and Rep. B. Davis arrived at 3:10 p.m.) CHAIR BUNDE then brought HB 506 to the table. HB 506 - STUDENT LOAN PROGRAM Number 122 CHAIR BUNDE indicated that Amendment 1 was before the committee, which would address the issue of consolidating loans and would allow loans to be rounded off to the nearest tenth. (He indicated that Rep. Olberg arrived at 3:11 p.m.) He then moved Amendment 1 for purposes of discussion. REP. BRICE objected. CHAIR BUNDE asked Mr. McCormick to speak to the amendment. Number 130 JOE MCCORMICK, Executive Director, Alaska Commission on Postsecondary Education (ACPE), answered questions on HB 506. He stated that "this is just a mechanical, or what I would call a technical, amendment to exact the administration of this provision of the bill. And, this is the only further amendment that we have today..." Number 165 CHAIR BUNDE asked Rep. Brice to speak to his objection. REP. BRICE asked, if loans are consolidated and the average rate is 7.6%, will the rate then be rounded off to 8%? MR. MCCORMICK explained that it is the nearest tenth of a percent. REP. BRICE said he understood. CHAIR BUNDE asked if Rep. Brice still maintained his objection. REP. BRICE said no. Number 194 CHAIR BUNDE, hearing no further objections, declared that Amendment 1 was adopted. He said HB 506 as amended was before the committee. REP. VEZEY proposed an amendment that would incorporate the body of a bill he introduced (HB 488) with that of HB 506 as amended. He said it dealt with the same chapters of Alaska statutes. CHAIR BUNDE interjected and said he assumed Rep. Vezey's amendment would limit student loans to Alaskan schools only. REP. VEZEY said yes. CHAIR BUNDE asked if he were interested in pursuing the issue. REP. VEZEY asked the pleasure of the committee in regards to HB 488. REP. BRICE said he felt that the amendment might hold merit in certain circumstances, but indicated that he would feel much more comfortable with back-up information and the opportunity to debate that specific bill before the amendment would be made. He said he opposed the amendment. Number 262 CHAIR BUNDE asserted that he would rather address HB 488 separately to allow opportunity for testimony and discussion. REP. TOOHEY suggested that a roll call vote be taken. CHAIR BUNDE stated that before the amendment could be addressed it would have to be seen and testified upon. He said the committee would not vote on something that has not been discussed. He reiterated that he wanted to handle it as a separate issue. REP. VEZEY concurred. CHAIR BUNDE asked for further discussion on HB 506. REP. BRICE suggested that perhaps some discussion should be made in the Labor and Commerce Committee in regards to capping the interest rate at 15% or 16%. He referred to the article that indicated that employers are looking for highly skilled and technically trained college graduates. He said that a free floating percentage rate could leave students in very difficult situations and that the loan program would not be making any loans. CHAIR BUNDE asked the pleasure of the committee. REP. VEZEY made a motion to pass HB 506 as amended out of committee with individual recommendations and accompanying fiscal note. CHAIR BUNDE, hearing no objections, stated that HB 506 was so moved. He then brought HB 466 to the table. He asked for public testimony.