(1) Creates the Hawaii educator loan program and special fund, to be administered by the University of Hawaii, for the purpose of making low-interest competitive loans to students based on need for financial aid and proof of acceptance into a state-approved teacher education program at the University of Hawaii;

(2) Limits the maximum amount of loans that a student may receive to an aggregate amount equivalent to tuition payments and costs of textbooks and other instructional materials necessary to complete a state-approved teacher education program, and sets the loan rate at five per cent simple interest;

(4) Requires the repayment of principal and interest charges on a loan to be made in periodic installments within a ten-year period, commencing one year after graduation or three months after a borrower ceases to be enrolled in the state-approved teacher education program;

(5) Requires one-tenth of the total amount of the loan and interest to be waived for every year that a loan recipient teaches in a Hawaii public school in a hard-to-fill position as determined by the Superintendent of Education, including special education, regular education shortage categories, or Title 1 schools;

(6) Requires a loan recipient to repay any remaining loan balance at the rate of ten per cent simple interest if the recipient fails to teach in the Hawaii public school system for a minimum of ten consecutive years from the recipient's original date of employment, excluding temporary leaves of absence; and

(7) Appropriates an unspecified sum for fiscal year 2001-2002 to the credit of the Hawaii educator loan program special fund, for the University of Hawaii to provide loans under the Hawaii educator loan program to students who agree to teach in the Hawaii public school system.