HF 2729

as introduced - 89th Legislature (2015 - 2016) Posted on 03/16/2016 01:21pm

A bill for an act
relating to higher education; establishing a loan forgiveness program for
individuals working in greater Minnesota; requiring a report; appropriating
money; proposing coding for new law in Minnesota Statutes, chapter 136A.

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

Section 1.

new text begin [136A.1792] GREATER MINNESOTA LOAN FORGIVENESS
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given.
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new text begin (b) "Greater Minnesota" means the geographic areas in Minnesota located outside of
the metropolitan area as defined in section 473.121, subdivision 2.
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new text begin (c) "Debt-to-income ratio" means an applicant's monthly student loan payment
obligation under a ten-year standard repayment plan, divided by the applicant's monthly
gross income.
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new text begin (d) "Qualifying educational institution" means an institution of higher education that
had in effect at the time of an applicant's attendance a program participation agreement
under United States Code, title 20, chapter 28, subchapter IV, part F, section 1094.
new text end

new text begin (e) "Qualifying position" means a position as an employee, as defined in section
181.723, subdivision 3, for which the primary work site is located in greater Minnesota.
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new text begin (f) "Qualifying student loan" means a government, commercial, or foundation loan
for actual costs paid for tuition and reasonable educational and living expenses related to
attending a qualifying educational institution.
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new text begin (g) "Working full time" means working an average of at least 30 hours per week.
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new text begin Subd. 2. new text end

new text begin Program established. new text end

new text begin (a) The commissioner must establish a greater
Minnesota loan forgiveness program for individuals who work in a qualifying position.
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new text begin (b) Appropriations to the program do not cancel and are available until expended.
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new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin (a) To be eligible to receive loan forgiveness under this section,
an applicant must:
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new text begin (1) be a Minnesota resident;
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new text begin (2) have a qualifying student loan balance;
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new text begin (3) have earned a degree, diploma, or certificate from a qualifying educational
institution;
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new text begin (4) have worked full time for a 12-month period in one or more qualifying positions;
and
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new text begin (5) have a debt-to-income ratio of at least 0.10.
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new text begin (b) An eligible applicant may receive one loan forgiveness award of the amount
specified in this section for each 12-month period that the applicant works for a qualifying
employer. An individual may receive a loan forgiveness award under this section no
more than five times.
new text end

new text begin Subd. 4. new text end

new text begin Application. new text end

new text begin (a) To be considered for a loan forgiveness award, an
applicant must apply in a form and manner specified by the commissioner.
new text end

new text begin (b) An applicant must reapply to the commissioner each year that the applicant
wishes to receive an award. The application must include proof that the participant has
worked full time for a 12-month period for one or more qualifying employers.
new text end

new text begin Subd. 5. new text end

new text begin Prioritization of applicants. new text end

new text begin If appropriations for the program under this
section are insufficient to provide a loan forgiveness award to each eligible applicant, the
commissioner must preferentially award loan forgiveness to applicants:
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new text begin (1) with a qualifying student loan balance of at least $5,000; and
new text end

new text begin (2) working in occupations that do not qualify for other state or federal loan
forgiveness programs that are limited to particular occupations.
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new text begin Subd. 6. new text end

new text begin Amount of forgiveness. new text end

new text begin (a) The commissioner must provide a loan
forgiveness award to an eligible applicant on a funds available basis, as provided in this
section.
new text end

new text begin (b) For each year of qualifying full-time work a participant completes, the participant
is eligible for a loan forgiveness award equal to the lesser of:
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new text begin (1) $3,000;
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new text begin (2) ten percent of the remaining balance of a participant's qualifying student loans
the first year a participant received an award under this section; or
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new text begin (3) the remaining balance of a participant's qualifying student loans.
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new text begin Subd. 7. new text end

new text begin Disbursement. new text end

new text begin The commissioner must disburse an award under this
section directly to the participant's student loan servicer or servicers.
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new text begin Subd. 8. new text end

new text begin Fund established. new text end

new text begin A greater Minnesota loan forgiveness fund is created for
depositing money appropriated to or received by the commissioner for the program. Money
deposited in the fund shall not revert to any state fund at the end of any fiscal year but
remains in the fund and is continuously available for loan forgiveness under this section.
new text end

new text begin Subd. 9. new text end

new text begin Reporting. new text end

new text begin By February 1 of each year, the commissioner must annually
report to the legislative committees with jurisdiction over higher education and economic
development on the results of the program in the previous year. At a minimum, the report
must include data on:
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new text begin (1) the number of applicants;
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new text begin (2) the highest degree obtained by applicants;
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new text begin (3) the industries in which applicants worked;
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new text begin (4) the counties in which applicants worked and resided;
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new text begin (5) the average student loan balance of applicants;
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new text begin (6) the mean and median loan forgiveness award;
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new text begin (7) the total amount of debt forgiven under the program;
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new text begin (8) the mean and median income of applicants;
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new text begin (9) the mean debt-to-income ratio of applicants; and
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new text begin (10) the number of greater Minnesota loan forgiveness awards that award recipients
received previously.
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Sec. 2. new text begin APPROPRIATION; GREATER MINNESOTA LOAN FORGIVENESS
PROGRAM.
new text end

new text begin $10,000,000 in fiscal year 2017 is appropriated from the general fund to the
commissioner of higher education for the greater Minnesota loan forgiveness program
under Minnesota Statutes, section 136A.1792. The commissioner may use no more than
three percent of this appropriation to administer the program.
new text end