Appropriates funds into the Hawaii educator loan program special fund. Allows monies in the fund to be used to attend any Hawaii teachers standards board state approved teacher education program. Allows recipients to teach in public schools and charter schools in shortage and difficult to fill school-level instructional teacher positions, and requires a six-year commitment.

A BILL FOR AN ACT

SECTION 1. Section 304-20.6, Hawaii Revised Statutes is amended to read as follows:

"§304-20.6 Hawaii educator loan program; special fund. (a) There is created the Hawaii educator loan program to be administered by the University of Hawaii, for the purpose of providing financial support to students who complete a state-approved teacher education program and who agree to teach in the Hawaii public school system[.] including Hawaii charter schools. Eligibility shall be awarded by the University of Hawaii to students on a competitive basis. 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 [a] any state-approved teacher education program [at the University of Hawaii.] recognized by the Hawaii teacher standards board. 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 a state-approved teacher education program.

(b) There is created in the treasury of the State, the Hawaii educator loan program special fund, for the purpose of providing loans pursuant to subsection (a). All loans made under this section 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 borrower ceases to be enrolled in the state-approved teacher education program and shall be paid in periodic installments within a six-year period. The university may charge late fees and all other reasonable costs for the collection of delinquent loans. The following may be deposited into the special fund: appropriations made by the legislature, private contributions, repayment of loans, including interest and payments received on account of principal, and moneys from other sources; provided that:

The university may adopt rules to implement the Hawaii educator loan program. The rules shall be adopted pursuant to chapter 91 but shall be exempt from the public notice and public hearing requirements.

(c) Upon a showing of proof that the individual has completed a state-approved teacher education program and is employed as a full-time teacher in the Hawaii public school system, including charter schools, one-tenth of the total amount of the loan and interest shall be waived for every year of the first five years, and the remaining balance shall be waived after the sixth year that a loan recipient teaches in a Hawaii public school [in a hard-to-fill position] or Hawaii charter school in shortage and difficult to fill school-level instructional teaching positions as determined by the superintendent of education, [including special education, regular education shortage categories, or Title 1 schools,] or the executive director of the charter school administrative office, and in one of the following capacities:

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

(d) If a loan recipient subject to this section fails to teach in the Hawaii public school system including charter schools for a minimum of [ten] six 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.

(e) In accordance with chapter 103D, the university may enter into written contracts with collection agencies for the purpose of collecting delinquent student loans. All payments collected, exclusive of a collection agency's commissions, shall revert, and be credited, to the loan 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."

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $500,000 or so much as may be necessary, for fiscal year 2006-2007 for student loans under the Hawaii educator loan program to be deposited to the credit of the Hawaii educator loan program special fund. The sums appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2006.