Establishes the Hawaii education loan program and special fund for the purpose of providing financial support to students who are enrolled in a program that culminates in the awarding of a teaching license, and who agree to teach in the Hawaii public school system. Appropriates funds. (HB1667 HD2)

A BILL FOR AN ACT

SECTION 1. The National Commission on Teaching and America's Future, a national organization with nineteen partner states, including Hawaii, is focused on improving student learning by ensuring that there is a caring, competent, and qualified teacher in every classroom.

Over the past year, with the lieutenant governor as its chairperson, the Hawaii Policy Group of the National Commission on Teaching and America's Future, composed of a representative group of educational stakeholders, has collaborated on research-based recommendations to improve teaching in Hawaii.

One thing was clear, aside from home and societal factors, teacher quality is, without a question, the most influential factor in student achievement. Standards-based reform has a greater chance of success when teacher quality is addressed and given our highest priority. The legislature finds that teachers must have the resources and skills necessary to ensure that all students attain their full potential.

The major recommendations of this group encompass five key areas:

The purpose of this Act is to create the Hawaii educator loan program and special fund as a tool to recruit college students to become educators and to ensure that these graduates teach in our public schools.

SECTION 2. Chapter 304, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§304-     Hawaii educator loan program; eligibility; repayment; collection. (a) There is created the Hawaii educator loan program to be administered by the University of Hawaii to provide financial support to students who complete a teacher education program approved by the department of education and who agree to teach in the Hawaii public school system.

(b) The University of Hawaii shall award loans to students on a competitive basis and upon proof that the student has been accepted into the college of education at the University of Hawaii. The amount to be loaned to a student shall be determined by the board of regents based on need for financial aid. The maximum aggregate loan that a student may receive under this program shall be an amount equivalent to tuition payments and costs of textbooks and other instructional materials necessary to complete a baccalaureate degree in education.

(c) Except as provided in subsection (e), all loans made under this section shall bear interest at five per cent simple interest. Repayment of principal and interest shall commence one year after graduation or three months after a borrower ceases to be enrolled in the college of education baccalaureate degree program and shall be paid in periodic installments within a ten-year period. The university may charge fees for the collection of delinquent loans and all other reasonable costs.

(d) Upon a showing of proof that a loan recipient has completed a teacher education program approved by the department of education and is employed as a full-time teacher in the Hawaii public school system, one-tenth of the total amount of the loan and interest shall be waived for every year that the loan recipient teaches in a Hawaii public school:

(e) If a loan recipient fails to teach in the Hawaii public school system for a minimum of ten consecutive years from the loan recipient's original date of employment with the department of education, excluding sabbatical and other forms of temporary leaves of absence, then the loan recipient shall repay any remaining loan balance at the rate of ten per cent simple interest.

(f) The university may enter into written contracts with collection agencies pursuant to chapter 103D for the purpose of collecting delinquent student loans. All payments collected, exclusive of a collection agency's commissions, shall be deposited into the Hawaii educator loan program special fund. A collection agency that enters into a written contract with the University of Hawaii for the collection of delinquent student 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.

§304-     Hawaii educator loan program special fund. There is created in the state treasury, the Hawaii educator loan program special fund, to be administered by the University of Hawaii for the purpose of providing loans to students under the Hawaii educator loan program. All state appropriations to the fund, loan payments, loan collections, interest, and fees received under the Hawaii educator loan program shall be deposited into the special fund. All interest earned or accrued on moneys deposited in the special fund shall become a part of the fund."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2001-2002 for student loans under the Hawaii educator loan program to be deposited to the credit of the Hawaii educator loan program special fund.

The sum appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2001.