HF 473

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/25/2021 05:38pm

A bill for an act
relating to higher education; expanding eligibility for the student loan refinancing
program; appropriating money; amending Minnesota Statutes 2020, sections
136A.1701, subdivision 10; 136A.1704.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 136A.1701, subdivision 10, is amended to
read:

Subd. 10.

Prohibition on use of state money.

Except as provided in deleted text begin section deleted text end new text begin sections
136A.1704, subdivision 2, and new text end 136A.1787, paragraph (a), no money originating from state
sources in the state treasury shall be made available for student loans under this section and
all student loans shall be made from money originating from nonstate sources.

Sec. 2.

Minnesota Statutes 2020, section 136A.1704, is amended to read:

136A.1704 STUDENT LOAN REFINANCING.

new text begin Subdivision 1. new text end

new text begin Refinancing permitted. new text end

The office may refinance student and parent
loans as provided by this section and on other terms and conditions the office prescribes.
The office may establish credit requirements for borrowers and determine what types of
student and parent loans will be eligible for refinancing. The refinanced loan need not have
been made through a loan program administered by the office. Loans shall be made with
available funds in the loan capital fund under section 136A.1785. The maximum amount
of outstanding loans refinanced under this section may not exceed deleted text begin $100,000,000 deleted text end new text begin
$125,000,000 new text end . The maximum loan under this section may not exceed $70,000.

new text begin Subd. 2. new text end

new text begin Higher education bad debt reserve account; appropriation. new text end

new text begin (a) A higher
education bad debt reserve account is established in the special revenue fund.
Notwithstanding section 16A.28, funds appropriated or transferred to the account do not
lapse but remain in the account for use in accordance with this subdivision.
new text end

new text begin (b) Amounts in the account are appropriated to the commissioner for the purposes
described in this section.
new text end

new text begin (c) The commissioner must use amounts in the account to expand eligibility for the
student loan refinancing program offered under this section. Eligible uses of funds include,
but are not limited to, reducing the credit score and debt-to-income requirements for the
program. The amount of additional loans refinanced under this subdivision may vary based
upon the amount available in the account and the rate of loss experience.
new text end

new text begin (d) If insufficient funds are available in the bad debt reserve account to offer expanded
eligibility, the commissioner may adjust the eligibility criteria for the program accordingly.
new text end

Sec. 3. new text begin TRANSFER; STUDENT LOAN REFINANCING.
new text end

new text begin $5,000,000 in fiscal year 2022 and $5,000,000 in fiscal year 2023 are transferred from
the general fund to the bad debt reserve account in the special revenue fund.
new text end