HB 407 - TEACHER SCHOLARSHIP LOANS Number 1415 CHAIRMAN BUNDE announced the next order of business would be HB 407, "An Act relating to repayment of teacher scholarship loans." REPRESENTATIVE GARY DAVIS, sponsor, came before the committee. He informed the committee HB 407 addresses a problem that was brought to his attention and the wording of the legislation speaks right to the problem. REPRESENTATIVE DAVIS explained the Teacher Scholarship Loan Program provides incentive to Alaskans who want to teach in the rural areas of the state. It gives them a scholarship to attend college and when they graduate, when they teach in rural areas, there's a process of forgiving the loan. There are stipulations that require you to teach in rural areas to qualify for forgiveness. REPRESENTATIVE DAVIS told the committee there was an instance when a medical problem arose with one of the students that graduated and due to medical procedures required that she be within the Anchorage area to receive treatment. He indicated the student is able to teach, she doesn't want to claim a full disability because she is not fully disabled. REPRESENTATIVE DAVIS said they attempted to write language that gave the department discretion in some of these situations, but he doesn't blame the department. He thinks it wasn't specifically said that they do not want the discretion, but they didn't pursue that and they wrote the legislation to address this specific problem. He further explained HB 407 addresses an additional condition that the loans can be forgiven. Number 1565 GARY REED, testified via teleconference from Kenai. He briefed the committee that he is the father of the person the bill was drafted for. He said the reason the bill was drafted was that his daughter graduated from high school in 1991, and had a 3.87 grade point average (GPA). After high school she attended college in Anchorage to pursue the career of becoming a teacher. Her goal was to become a teacher and teach in rural Alaska. He advised the committee in January, 1996, she was diagnosed with a degenerative disease which there is no cure for, but it can be greatly reduced in its progression by medical treatment. The treatment is continuous and has to be quite regular. The disease prevented his daughter from going to the Bush and has also affected her mentally. Mr. Reed said her rheumatologist wanted her to take disability, but she refused. She is capable of teaching at this time, but in five to ten years from now, that might change. He continued by stating his daughter is devastated because she is unable to teach in the Bush and has a loan she anticipated would be forgiven by fulfilling the obligations under the program. MR. REED informed the committee he wrote a letter to Commissioner Holloway of the Department of Education. Commissioner Holloway told him the current legislation allows only for people who are claiming total disability. There is no option for any partial disability. Mr. Reed said HB 407 would give the commissioner another option to consider and another tool to take into consideration special circumstances. Mr. Reed urged the committee members to take this situation into consideration and pass the legislation. Number 1738 MARCIA REED was next to come before the committee to testify. She stated she is the mother of the daughter who finished college and wanted to teach in the Bush, but now has been diagnosed with a medical condition that doesn't enable her to do that. Ms. Reed said her daughter is not totally disabled and wants to work. She encouraged the committee members to support and pass HB 407 so that her daughter's scholarship funds may be forgiven. Number 1788 CHAIRMAN BUNDE said this is the first time the committee has heard HB 407, and normally bills are not passed out of committee at the first hearing because it will give the members a chance to address concerns they might have. Chairman Bunde told Representative Davis he is looking for wording in the legislation which says "diagnosed" or "required by"; some certification by a medical professional that would require that they stay in an urban area. REPRESENTATIVE DAVIS responded that they haven't gotten into that detail in the legislation. He said he would assume that statutes and regulations written on the legislation would protect the Department of Education to assure them that that is the condition. He pointed out they could rephrase the bill and put it in statute. CHAIRMAN BUNDE recommended Representative Davis check with the Department of Education and see if they can take care of that in regulation. Number 1867 MIKE MAHER, Director, Student Financial Aid, Postsecondary Education Commission, Department of Education, came before the committee to testify. He stated the department would promulgate regulations similar to the medical write-off that would require two doctors' opinions that this individual would have to stay in an urban area of the state to receive their medical treatment which would be sufficient for the department. Number 1900 REPRESENTATIVE GREEN asked Mr. Maher if sees this type of a condition very often. MR. MAHER replied very seldom; two or three times. He indicated the regulations would fill in a loophole for individuals that have good intentions and go off to school and get a degree, come back and want to work in the rural areas, and through nothing they have done, they are prohibited to do that. As long as they teach in an urban area, they would receive the same yearly forgiveness benefits as an individual going to the Bush. Number 1969 REPRESENTATIVE PORTER commented that this is a narrow exception and no other facts are needed to make a decision. Therefore, Representative Porter made a motion to move HB 407 out of committee with individual recommendations and the attached fiscal note. There being no objection, HB 407 moved from the House Health, Education and Social Services Standing Committee.