HF 479 (LSB 2035YH (3) 86)

HOUSE FILE 479

BY  FINKENAUER

A BILL FOR

An Act to establish a nurturing Iowans loan reimbursement program and fund under the administration and control of the college student aid commission.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  261.117  Nurturing Iowans loan reimbursement program.
   1.  For purposes of this section:
   a.  “Eligible individual” means an individual who graduated from an accredited college or university with a baccalaureate or higher degree and who resides in and is employed full-time in this state for at least one full year prior to receiving reimbursements under subsection 3. To maintain eligibility in order to continue participating beyond the first year in the program, the individual shall annually reapply to the commission and submit any information requested by the commission as set forth in subsection 2.
   b.  “Eligible loan” means the eligible individual’s total federally guaranteed Stafford loan amount under the federal family education loan program or the eligible individual’s federal direct loan program, the amount of the eligible individual’s federal grad plus loans, or the amount of the eligible individual’s federal Perkins loan, including principal and interest.
   2.  Subject to an appropriation by the general assembly for this purpose, a nurturing Iowans loan reimbursement program is established to be administered by the college student aid commission for purposes of providing loan reimbursement payments for individuals who remain in Iowa and are employed in the state upon graduating from an accredited public or private postsecondary institution.
   3.  An individual shall be eligible for the loan reimbursement program if, upon graduating from an accredited public or private postsecondary institution with a baccalaureate or higher degree, the individual resides in and is employed full-time in this state. An eligible individual may apply to the commission to participate in the program and shall submit any information requested in connection with the program, including but not limited to information regarding the eligible individual’s outstanding loans and loan payments, academic status, and employment.
   4.  An eligible individual shall receive reimbursement payments under the program for each of the fiscal years following the first full calendar year of residence in this state as follows or until the twelve months following the fiscal year in which the eligible loans are paid in full:
   a.  For the first fiscal year, an amount equivalent to five percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   b.  For the second fiscal year, an amount equivalent to ten percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   c.  For the third fiscal year, an amount equivalent to fifteen percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   d.  For the fourth fiscal year, an amount equivalent to twenty percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   e.  For the fifth fiscal year, an amount equivalent to twenty-five percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   f.  For the sixth fiscal year, an amount equivalent to thirty percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   g.  For the seventh fiscal year, an amount equivalent to forty percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   h.  For the eighth fiscal year, an amount equivalent to fifty percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   5.  A nurturing Iowans loan reimbursement fund is created in the state treasury as a separate fund under the control of the commission and shall consist of moneys appropriated by the general assembly and any other moneys received by the commission for deposit in the fund. Moneys in the fund are appropriated to the commission for the purposes of the program. Notwithstanding section 8.33, any balance in the fund on June 30 of any fiscal year shall not revert to the general fund of the state but shall remain in the fund and be continuously available for loan reimbursement under the program. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys deposited in the fund shall be credited to the fund.
   6.  The commission shall adopt rules pursuant to chapter 17A to administer this section.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill establishes, subject to an appropriation by the general assembly for such purpose, a nurturing Iowans loan reimbursement program and fund under administration and control of the college student aid commission for purposes of providing loan reimbursement payments for eligible individuals who remain in Iowa as residents and are employed full-time in the state upon graduating with a baccalaureate degree or a higher degree from an accredited public or private postsecondary institution.
   An eligible individual may apply to the commission to participate in the program and must submit any information requested by the commission in connection with the program.
   Under the program, the commission begins reimbursement payments to an eligible individual following the individual’s first full calendar year of residence in this state. The first reimbursement payment an eligible individual qualifies for is 5 percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year. The amounts increase by five percentage points per year for each of the next five years for which the individual remains eligible for the program, then increase by 10 percentage points per year for the seventh and eighth years of eligibility, making the individual eligible for reimbursement payments in the eighth year equivalent to 50 percent of the amount of loan payments made by the eligible individual on eligible loans in the prior fiscal year.
   Under the bill, “eligible loan” means the eligible individual’s total federally guaranteed Stafford loan amount under the federal family education loan program or the eligible individual’s federal direct loan program, the amount of the eligible individual’s federal grad plus loans, or the amount of the eligible individual’s federal Perkins loan, including principal and interest.
   A nurturing Iowans loan reimbursement fund is created in the state treasury as a separate fund under the control of the commission for deposit of moneys appropriated by the general assembly or received by the commission for deposit in the fund. Moneys in the fund are appropriated to the commission for use under the program. Moneys in the fund do not revert to the general fund of the state, and interest earned on the fund is credited to the fund, to be continuously available for loan reimbursement under the program.