Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Education, to which was referred H.B. No. 1411 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize Secondary Market Services Corporation – Hawaii, the state designated student loan secondary market, to purchase student loan notes held by mainland financial institutions.

Your Committee received testimony in favor of this measure from the University of Hawaii, American Savings Bank, United Student Aid Funds, Inc., Pacific Financial Aid Association, and HawaiiUSA Federal Credit Union.

Your Committee finds that a strong state student loan secondary market can only benefit students because it is charged with giving student loan borrowers opportunities by which to reduce the cost of borrowing by providing borrower benefit programs, such as interest rate reductions which reward borrowers for on-time payments, or the use of auto-debit when making monthly payments.

As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1411 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.