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SPONSOR: |
Varela |
DATE TYPED: |
|
HB |
851 |
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SHORT TITLE: |
Student Loan Payback Provisions |
SB |
|
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ANALYST: |
Williams |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
Revenue
Increase |
|
Recurring |
Federal
Funds |
|
|
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
LFC
Files
Commission
on Higher Education (CHE)
SUMMARY
Synopsis of Bill
The bill changes the
names of the state loan-for-service student financial aid programs, along with
corresponding fund names, as follows:
For all
New language would
apply to nursing students in non-compliance; these borrowers would be assessed
a penalty of up to two times principal plus seven percent interest with total
loan, interest and penalty immediately due unless CHE finds acceptable
extenuating circumstances.
FISCAL IMPLICATIONS
No appropriation is included in the bill;
however, CHE notes the potential for an increase in federal matching funds
resulting from the name changes.
ADMINISTRATIVE IMPLICATIONS
CHE notes the bill
would require modifications to the loan tracking system.
OTHER SUBSTANTIVE ISSUES
These programs seek to
increase the number of professionals in shortage areas of the state by
providing educational loans to qualifying students. As a condition of the loan, the student must
practice in a designated shortage area in the state. Penalties apply for failure to provide
reciprocating service.
CHE notes a downward
trend in participation in these programs for five fiscal years; however, in the
current year, the programs posted a five percent increase in
participation. This uptick could be
indicative of the national pattern of significant increases in enrollment
applications in many fields, due in part to the national economic downturn.
POSSIBLE QUESTIONS
1.
What is the intent of the Legislature
with respect to the type of extenuating circumstances for nursing students by
which non-compliance penalties could be waived?
AW/sb