HB1530 SD1

SECTION 1. In 2001, the Hawaii educator loan program and special fund were established to recruit college students to become educators and to ensure that these graduates teach in our public schools. The legislature finds that although the program has proven to be successful, the State is still experiencing a teacher shortage. In particular, hard-to-fill positions, including special education, regular education shortage categories, and teacher positions in rural areas have posed a significant teacher recruitment and retention challenge for our public schools.

The legislature also finds that a similar problem exists with attracting and retaining educational assistants, especially certified educational assistants, to work in schools located in rural areas. Community colleges and adult community schools offer educational assistant certification training programs, but only in limited areas, where access may be a problem for those who live in rural areas. Moreover, many educational assistants who are already working part- or full-time in these communities cannot afford the tuition costs at a community college.

The purpose of this Act is to establish educational assistant loan and loan forgiveness programs to recruit and retain qualified educational assistants to work in rural areas and hard-to-fill positions in public schools throughout the State.

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A- Educational assistant loan forgiveness program; special fund. (a) There is created the educational assistant loan forgiveness program to be administered by the department in partnership with a financial institution whose operations are principally conducted in Hawaii, for the purpose of providing financial support to educational assistants who complete a state-approved certification training program and agree to teach in the Hawaii public school system at a school located in a rural area, as determined by the department and for a period of time to be determined prior to each award. Eligibility shall be determined by the department on a competitive basis. The amount awarded to an educational assistant shall be determined by the department based on need for financial aid and proof of completion of a state-approved certification training program. The maximum amount that an educational assistant 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 certification training program.

(b) There is created in the treasury of the State the educational assistant loan forgiveness program special fund, for the purpose of providing funds pursuant to subsection (a). 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; moneys received from collection agencies under subsection (g); and moneys from other sources; provided that:

(1) Moneys on balance in the special fund at the close of each fiscal year shall remain in that fund and shall not lapse to the credit of the general fund; and

(2) An amount from the special fund not exceeding five per cent of the total amount of the special fund may be set by the department to be used for administrative expenses incurred in administering the special fund.

(c) The department shall adopt rules to implement the educational assistant loan forgiveness program. The rules shall be adopted pursuant to chapter 91, but shall be exempt from the public notice and public hearing requirements.

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

(e) Upon a showing of proof that the loan recipient has completed a state-approved certification training program and for each year that the loan recipient teaches in the Hawaii public school system at a school located in a rural area, loan forgiveness shall be provided to the recipient as follows:

(1) Ten per cent of the total amount of the loan and interest shall be waived every year for the first five years of repayment; and

(2) Twenty-five per cent of the total amount of the loan and interest shall be waived every year for the sixth and seventh years of repayment.

(f) If an educational assistant who is a graduate of a state-approved certification training program subject to this section fails to teach in the Hawaii public school system at a school located in a rural area for a minimum number of years, as determined by the department prior to the award, from the recipient's original date of employment with the department, excluding temporary leaves of absence, then the recipient shall repay any remaining loan balance.

(g) In accordance with chapter 103D, the department may enter into written contracts with collection agencies for the purpose of collecting delinquent loans. All payments collected, exclusive of a collection agency's commissions, shall revert, and be credited, to the educational assistant loan forgiveness program special fund. A collection agency that enters into a written contract with the department for the collection of delinquent 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 3. Chapter 304A, Hawaii Revised Statutes, is amended by adding a new subpart to part II to be appropriately designated and to read as follows:

" . Hawaii Educational Assistant Loans

§304A-A Hawaii educational assistant loans; eligibility; amounts. There is created the Hawaii educational assistant loan program to be administered by the University of Hawaii, to provide financial support to students who complete a state-approved certification training program, who agree to serve as an educational assistant in the Hawaii public school system. Eligibility shall be determined by the university 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 state-approved certification training program available through the University of Hawaii community college system. 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 certification training program.

§304A-B Repayment of loans; waiver; collection. (a) All loans made under this subpart shall bear interest at five per cent simple interest. Repayment of principal and interest charges shall commence one year after certification or three months after a loan recipient ceases to be enrolled in a state-approved certification training program and shall be paid in periodic installments within a seven-year period. The university may charge late fees and all other reasonable costs for the collection of delinquent loans.

(b) Upon a showing of proof that the loan recipient has completed a state-approved certification training program and is employed as a part- or full-time certified educational assistant in the Hawaii public school system, one-tenth of the total amount of the loan and interest shall be waived for every year of the first five years, and twenty-five per cent of the total amount of the loan and interest shall be waived every year for the sixth and seventh years of repayment that a loan recipient works in a hard-to-fill position as determined by the superintendent of education, including special education, regular education shortage categories, or Title 1 schools, as a part- or full-time educational assistant who has met the certification requirements set forth by the department of education.

(c) Liability for repayment of a loan shall be canceled upon the death or permanent total disability of the loan recipient.

(d) If a loan recipient who is a certified educational assistant subject to this section fails to serve in the Hawaii public school system in a hard-to-fill position for a minimum of five consecutive years from the loan recipient's original date of employment with the department of education, excluding 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 Hawaii educational assistant loan program special fund established under section 304A-E for the Hawaii educational assistant loan program. A collection agency that enters into a written contract with the university 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.

§304A-C Capacity of minors. Any student otherwise qualifying for a loan under this subpart shall not be disqualified because the student is under the age of eighteen years, and for the purpose of applying for, receiving, and repaying the loan, any person shall be deemed to have full legal capacity to act and shall have all rights, powers, privileges, and obligations of an adult with respect thereto.

§304A-D Rules. The university may adopt rules to implement this subpart. The rules shall be adopted pursuant to chapter 91, but shall be exempt from the public notice and public hearing requirements."

SECTION 4. Chapter 304A, Hawaii Revised Statutes, is amended by adding a new section to part V to be appropriately designated and to read as follows:

"§304A-E Hawaii educational assistant loan program special fund. There is established the Hawaii educational assistant loan program special fund, to be administered by the University of Hawaii for the purpose of providing loans pursuant to section 304A-A. 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:

(1) Moneys on balance in the special fund at the close of each fiscal year shall remain in that fund and shall not lapse to the credit of the general fund; and

(2) An amount from the special fund not exceeding five per cent of the total amount of outstanding loans may be set by the university to be used for administrative expenses incurred in administering the special fund."

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ for fiscal year 2007-2008 and the same sum for fiscal year 2008-2009 for deposit into the educational assistant loan forgiveness program special fund.

SECTION 6. There is appropriated out of the educational assistant loan forgiveness program special fund the sum of $ or so much thereof as may be necessary for fiscal year 2007-2008 and the same sum or so much thereof as may be necessary for fiscal year 2008-2009 for the purposes of the state educational assistant loan forgiveness program.

The sums appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $ for fiscal year 2007-2008 and the same sum for fiscal year 2008-2009, for deposit into the Hawaii educational assistant loan program special fund.

SECTION 8. There is appropriated out of the educational assistant loan program special fund the sum of $ or so much thereof as may be necessary for fiscal year 2007-2008 and the same sum or so much thereof as may be necessary for fiscal year 2008-2009 for the purposes of the Hawaii educational assistant loan program.

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

SECTION 9. In codifying the new sections added by this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 10. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2020; provided that sections 5, 6, 7, and 8 shall take effect on July 1, 2020.

HOUSE OF REPRESENTATIVES	H.B. NO.	1530
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 1
STATE OF HAWAII		S.D. 1