Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Education, to which was referred H.B. No. 2752, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the licensing authority to suspend, deny, or refuse to renew, reinstate, or restore the license of any person who has defaulted or breached any obligation under a student loan, student loan repayment contract, or scholarship contract.

Your Committee received testimony in support of the measure from the State Representative of District No. 14, Department of Education, Department of Commerce and Consumer Affairs, University of Hawaii, and Hawaii Credit Counseling Service. Your Committee received comments on the measure from the Hawaii Nurses' Association.

Your Committee finds that this measure would provide an additional mechanism for recovering defaulted student loans, encouraging student loan repayment, and deterring potential defaulters. As student loans are administered as revolving funds, timely repayments would facilitate replenishment of funds for the issuance of loans to new borrowers as well. Your Committee further finds that the Department of Commerce and Consumer Affairs may adopt rules as necessary to implement this measure.

Your Committee has amended the measure by changing the effective date to July 1, 2050, and by adding a provision stipulating that the measure shall not apply to an individual against whom a court order is entered in connection with the default or breach in the nature of a garnishment process or other form of court-ordered repayment.

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. 2752, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2752, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.