HOUSE BILL NO. 114 am "An Act relating to the education loan program and Alaska supplemental education loan program; and providing for an effective date." 1:40:34 PM AT EASE 1:41:03 PM RECONVENED 1:41:30 PM Senator Hoffman MOVED to ADOPT proposed committee substitute for HB 114, Work Draft 32-GH1644\B (Marx, 5/12/22). Co-Chair Bishop OBJECTED for discussion. 1:41:58 PM ERIN SHINE, STAFF, SENATOR CLICK BISHOP, discussed the changes to the committee substitute. Senator Wielechowski stated that he had a question for someone from the Department of Education and Early Development. 1:42:53 PM SANA EFIRD, EXECUTIVE DIRECTOR, ALASKA COMMISSION ON POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, introduced herself. Senator Wielechowski recalled that he had previously posed the question about the definition of beneficiary on page 1, line 12. Ms. Efird replied that she had submitted the answer to that question, but remarked that the difference for a beneficiary in the program was a person that was the recipient of the benefit of the loan. Senator Wielechowski wondered whether wealthy parents could receive cheaper loans instead of the bank from the state. Ms. Efird replied that if the applicant met the eligibility requirements of the loan, they could receive a state loan. Senator Wielechowski expressed concern, because under current law one must have good credit to receive the state loan. Ms. Efird replied that there were specific credit requirements for the loan. Senator Wielechowski wondered what would happen if someone or someones family had bad credit. 1:45:4 0 PM Ms. Efird replied that a student that may not qualify could get a cosigner for the loan. She agreed that the student loan corporation is responsible for the financial sustainability of the fund. Senator Wielechowski wondered whether a beneficiary also had to be an Alaska resident under the bill. Ms. Efird replied that there were various student loan programs. She shared that there must be proof of Alaskan residency for a student that was taking an in school loan, even if attending out of state. She noted that the bill had expanded the criteria for the refinance loan program. The expansion of the eligibility included those that could have previously received a loan through the student loan corporation, but were now out of state. Co-Chair Bishop queried the definition of Alaskan resident in the bill. Ms. Efird replied that the requirement was the same as the Permanent Fund Dividend (PFD) criteria. Senator Wielechowski noted that the bill allowed the corporation to set a maximum loan amount. He wondered whether the bill allowed the state to cover a large amount of tuition for a wealthy family. Ms. Efird replied that the bill gave the authority to the corporation board the ability to set the loan limits based on current analysis of instate cost an out-of-state costs of where the majority of Alaska student attendance. 1:51:49 PM Senator von Imhof queried the evaluation of the ability for repayment. Ms. Efird replied that she was not the loan specialist, and agreed to provide further information. She did explain that there were credit evaluations. Senator von Imhof queried the ability for a student to sign on a loan, and wondered why there was no cosigner required for all applicants. She queried the repayment timeline. Ms. Efird stated that the default rate for the refinance program had a zero percent default rate. She stated that an in school student loan was deferred while the student was in school. After graduation, the student had six months before repayment begins. She noted that there were a number of different payment plans. 1:55:23 PM Senator Wilson remarked that he took out a loan for his graduate studies from the corporation. He surmised that the intent was to take out low-risk loans. He felt that it was not a competition with banks. Ms. Efird agreed. She explained that the corporation was fulfilling the mission set out in statute. 1:57:43 PM AT EASE 1:57:53 PM RECONVENED 1:57:58 PM Co-Chair Bishop WITHDREW their OBJECTION. There being NO OBJECTION, it was so ordered. 1:58:30 PM Co-Chair Bishop discussed FN 3, a zero fiscal note from the Department of Education and Early Development, OMB Component 2738. Co-Chair Bishop asked about the impact of the changes in the committee substitute. Ms. Efird stated that the effective date was retroactive to 2016. Senator Hoffman MOVED to report SCS HB 114(FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. SCS HB 114(FIN) was REPORTED out of committee with three no recommendation, one amend, and two do pass recommendations; and with one new fiscal impact note from the Department of Education and Early Development, and one previously published zero fiscal note: FN4 (GOV). Co-Chair Bishop discussed the following day's agenda //