HOUSE BILL NO. 27 "An Act relating to graduate student loans; and providing for an effective date." CS FOR HOUSE BILL NO. 27(HES) "An Act relating to financial aid received for medical education and financial aid received by students participating in the Western Interstate Commission on Higher Education Professional Student Exchange Program; relating to the Western Regional Higher Education Compact; and providing for an effective date." REPRESENTATIVE ELDON MULDER was invited to join the committee. He thanked the committee for hearing HB 27 and explained that it was a simple bill. It would allow Alaska students opportunities or access to special "slots" through use of the Alaska Student Loan program. As he said, the bill would allow the holding of slots within WITCHIE for Alaska students. It would be a full loan repayment plan. The biggest concern is one of access. These are professional fields, which are very competitive to get into. These included for example, dentistry, which were not available at the University of Alaska. And it would be too expensive to establish these degree programs at the University. The bill would allow for slots to be held for Alaskan students. He referred to a letter written from a woman from Wasilla. (read into the record) He felt that the letter explained the situation completely for Alaskan students. Further, passage of the bill would help to correct these difficulties. At this time Representative Mulder passed out an amendment which he said was a technical correction. Co-chair Torgerson asked him to explain this. (No number was issued for this amendment at this time.) Amendment #1 was MOVED by Senator Wilken. Representative Mulder asked that Diane Barrans to be invited to join the committee to explain the amendment. DIANE BARRANS, Executive Director, Post Secondary Education Commissioner, Department of Education was invited to join the committee. Co-chair Torgerson asked her to explain amendment #1, specifically section two. Senator Green asked about section 1 of the bill, the HES version. "Are we just bringing WITCHIE back?" Ms. Barrans explained "WAMI" and "WITCHIE". Senator Green asked the sections of the bill to be identified where these slots would fit in. Representative Mulder said they would come under section three. Ms. Barrans referred again to the amendment. Senator Green asked if the WITCHIE program was being repealed? Ms. Barrans indicated that was correct. Senator Leman asked if there were slots in other states that were given to their residents. He further asked if our students, through the WITCHIE compact, would have the same priority? Ms. Barrans said at the time when we were participating and funding slots that was true. But since the program was no longer funded to include these slots and that the State no longer participated in the programs that was no longer true. Senator Adams asked if in looking at the slots for Alaska students, was there any benefit to the State versus a student paying out-of-state tuition? Ms. Barrans said generally not. Support fee was more than the differential for non-resident tuition. In some other cases it was less. It would all depend on the fee schedule for the degree program. There could be some minor economical benefit, however, the major benefit was that the student would get considered. Senator Donley said he did not understand how forgiveness bought more seats at a university? "We have to buy seats for students applying to the program?" Ms. Barrans asked the question be repeated. Senator Donley asked if we were buying our way into the WITCHIE program? Ms. Barrans indicated that was correct. She explained that the exchange program required states to pay an additional cost in advance. The schools have to know that the money will be available. Ms. Barrans explained the bottom line of the fiscal analysis. It was not an appropriated item, however. Senator Donley asked about the fee being paid. Representative Mulder said the student would not only pay the loan but the slot fee. Senator Donley said there was a special component already in the medical WITCHIE program. Ms. Barrans replied that the students would be incurring about $200,000 debt. Senator Donley asked if the bill would take money from the existing users of the loans to sign at universities for slots for Alaskans? Ms. Barrans said they would just reactivate their status in the program. Senator Donley referred to page two of the bill, WAMI. Where is the repayment program in the bill? Ms. Barrans said it was in the amendment. Senator Donley said he needed more clarification of the amendment. Senator Green asked about changes to the student loan program dealt with about two to three years ago. Is there a ceiling? Ms. Barrans said a cap could not really be put in because they are renegotiated each year. At present, the cap for an undergraduate is $60,000. Senator Wilken asked the total amount of loans to be put out this year. She responded about $69 million. Senator Wilken said this year they recorded a profit. Would this piece of legislation cause a negative impact on this profit? She did not expect so. Senator Donley asked how much a non-WAMI student could borrow? Ms. Barrans responded that the amount was $9,500/year. Senator Donley said there used to be a line item in the budget to pay for WAMI. Would this bill cover the line item effect of previous? Would the department make decision as to what slots were purchased? Senator Donley also asked about medical school? He was concerned that an undergraduate would have maxed out their capacity to borrow. Senator Parnell asked about the $9,500/year borrowing capacity. Ms. Barrans explained this. Senator Parnell asked if there was a medical student loan program only? Ms. Barrans said there was no special loan program. WITHOUT OBJECTION amendment #1 was ADOPTED. Co-chair Torgerson took a brief at ease at approximately 11:31 a.m. Senator Wilken MOVED SCS CSHB 27(FIN) and WITHOUT OBJECTION it was REPORTED OUT with individual recommendations and accompanying fiscal note from the Department of Education, indeterminate amount. Co-chair Torgerson called HB 10.