THE SENATE

S.B. NO.

348

TWENTY-NINTH LEGISLATURE, 2017

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to THE hawaii public service loan forgiveness program.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Chapter 304A, Hawaii Revised Statutes, is amended by adding a new subpart to part II to be appropriately designated and to read as follows:

"   . Hawaii Public Service Loans

304A-A Hawaii public service loans; eligibility; amounts; Hawaii public service loan forgiveness program; repayment; collection. (a) There is created the Hawaii public service loan forgiveness program to be administered by the University of Hawaii, in partnership with a financial institution whose operations are principally conducted in Hawaii, to provide financial support to students who:

(1) Complete an associate, bachelor, or graduate degree program at a school within the University of Hawaii system; and

(2) Agree to work as a full-time employee of the State or county for a period of time to be determined by the university prior to the award of a loan.

Eligibility shall be determined by the university on a competitive basis; provided that students or teachers who qualify for the Hawaii educator loan forgiveness program pursuant to section 304A-701 shall not be eligible for the Hawaii public service loan forgiveness program. The amount to be loaned to a student shall be determined by the board of regents based on need for financial aid and proof of acceptance into an associate, bachelor, or graduate degree program at a school within the University of Hawaii system. The maximum amount of loans that a student may receive under this program shall be an aggregate amount equivalent to tuition payments and costs of textbooks and other instructional materials necessary to complete an associate, bachelor, or graduate degree program pursuant to this subsection.

(b) All loans made under this subpart shall bear interest at five per cent simple interest. Repayment of principal and interest charges shall commence one year after graduation or three months after a loan recipient ceases to be enrolled in an associate, bachelor, or graduate degree program pursuant to subsection (a) and shall be paid in periodic installments within a seven-year period. The university may charge late fees and all other reasonable costs for the collection of delinquent loans.

(c) The university shall adopt rules to implement the Hawaii public service loan forgiveness program. The rules shall be adopted pursuant to chapter 91, but shall be exempt from the public notice and public hearing requirements.

(d) Liability for repayment of a loan shall be canceled upon the death or permanent total disability of the borrower.

(e) Upon a showing of proof that the loan recipient has completed an associate, bachelor, or graduate degree program and for each year that the loan award recipient is employed by the State or county pursuant to subsection (a), loan forgiveness shall be provided to the recipient as follows:

(1) Ten per cent of the total amount of the loan award and interest shall be waived each year for the first five years of repayment; and

(2) Twenty-five per cent of the total amount of the loan award and interest shall be waived each year for the sixth and seventh years of repayment.

(f) If a loan recipient who is a graduate of an associate, bachelor, or graduate degree program pursuant to subsection (a) and employed by the State or county fails to work as a state or county employee for the minimum number of years, as determined by the university prior to the loan, from the recipient's original date of employment with the State or county, excluding temporary leaves of absence, then the recipient shall repay any remaining loan balance at the rate of ten per cent simple interest.

(g) In accordance with chapter 103D, the university may enter into written contracts with collection agencies for the purpose of collecting delinquent loans. All payments collected, exclusive of a collection agency's commissions, shall revert, and be credited, to the Hawaii public service loan program revolving fund. A collection agency that enters into a written contract with the university for the collection of delinquent loans pursuant to this section may collect a commission from the debtor in accordance with the terms of, and up to the amounts authorized in, the written contract.

304A-B Capacity of minors in qualifying for Hawaii public service loans. Any student otherwise qualifying for a loan under the Hawaii public service loan program revolving fund shall not be disqualified because the student is under the age of eighteen years, and for the purpose of applying for, receiving, and repaying the loan, any such person shall be deemed to have full legal capacity to act and shall have all rights, powers, privileges, and obligations of any adult with respect thereto."

SECTION 2. Chapter 304A, Hawaii Revised Statutes, is amended by adding a new section to subpart D of part V to be appropriately designated and to read as follows:

"304A-C Hawaii public service loan program revolving fund. There is established the Hawaii public service loan program revolving fund, for the purpose of providing loans pursuant to section 304A-A. Appropriations made by the legislature, private contributions, repayment of loans, including interest and payments received on account of principal, and moneys from other sources shall be deposited into the revolving fund and shall be expended by the university. An amount from the revolving fund not exceeding five per cent of the total amount of outstanding loans may be set by the university to be used for administrative expenses incurred in administering the revolving fund."

SECTION 3. In codifying the new sections added by section sections 1 and 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Hawaii Public Service Loan Forgiveness Program; Loan Repayment; State and County Employees

 

Description:

Creates a public service loan forgiveness program and revolving fund in the University of Hawaii. Establishes eligibility and repayment requirements for individuals who complete an associate, bachelor, or graduate degree program within the University of Hawaii system and agree to work full-time for the State or county for a specified number of years as determined by the university.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.