1.1                          A bill for an act 
  1.2             relating to higher education; directing institutions 
  1.3             to develop policy for students with institutional 
  1.4             loans; modifying eligibility for student grants; 
  1.5             amending Minnesota Statutes 2000, section 136A.121, 
  1.6             subdivisions 2 and 9; proposing coding for new law in 
  1.7             Minnesota Statutes, chapter 135A. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [135A.165] [POLICY FOR STUDENTS WITH 
  1.10  INSTITUTIONAL LOANS.] 
  1.11     (a) The board of trustees of the Minnesota state colleges 
  1.12  and universities shall, and the University of Minnesota is 
  1.13  requested to, adopt a policy to assist students that are in 
  1.14  default on institutional loans offered by any public 
  1.15  post-secondary institution, return to good standing and complete 
  1.16  their education.  Governing boards of private post-secondary 
  1.17  institutions are requested to adopt similar policies.  
  1.18     (b) The policy developed under this section shall provide 
  1.19  that post-secondary institutions must readmit, and may not deny 
  1.20  access to student records of, those students who have made 
  1.21  good-faith efforts to rehabilitate their student loans and have 
  1.22  made repayment arrangements with the institution.  Any repayment 
  1.23  schedules entered into under this section must take into account 
  1.24  a student's economic hardship and ability to pay.  Institutions 
  1.25  offering institutional loans shall provide notice of the policy 
  1.26  developed under this section.  A loan rehabilitation policy, 
  2.1   adopted by an institution, that conforms with Code of Federal 
  2.2   Regulations, title 34, section 674.39, shall be deemed as 
  2.3   complying with this section. 
  2.4      (c) A student may rehabilitate a defaulted loan under a 
  2.5   loan rehabilitation policy adopted under this section only one 
  2.6   time.  
  2.7      (d) For any institution that does not have a policy under 
  2.8   this section in place by July 1, 2001, students of the 
  2.9   institution shall not be eligible to participate in state 
  2.10  educational financial aid programs or receive state educational 
  2.11  financial aid. 
  2.12     Sec. 2.  Minnesota Statutes 2000, section 136A.121, 
  2.13  subdivision 2, is amended to read: 
  2.14     Subd. 2.  [ELIGIBILITY FOR GRANTS.] An applicant is 
  2.15  eligible to be considered for a grant, regardless of the 
  2.16  applicant's sex, creed, race, color, national origin, or 
  2.17  ancestry, under sections 136A.095 to 136A.131 if the office 
  2.18  finds that the applicant: 
  2.19     (1) is a resident of the state of Minnesota; 
  2.20     (2) is a graduate of a secondary school or its equivalent, 
  2.21  or is 17 years of age or over, and has met all requirements for 
  2.22  admission as a student to an eligible college or technical 
  2.23  college of choice as defined in sections 136A.095 to 136A.131; 
  2.24     (3) has met the financial need criteria established in 
  2.25  Minnesota Rules; 
  2.26     (4) is not in default, as defined by the office, of any 
  2.27  federal or state student educational loan, or, if the applicant 
  2.28  is in default, has made repayment arrangements satisfactory to 
  2.29  the guarantee agency and the office; and 
  2.30     (5) is not more than 30 days in arrears for any child 
  2.31  support payments owed to a public agency responsible for child 
  2.32  support enforcement or, if the applicant is more than 30 days in 
  2.33  arrears, is complying with a written payment agreement or order 
  2.34  for arrearages.  An agreement must provide for a repayment of 
  2.35  arrearages at no less than 20 percent per month of the amount of 
  2.36  the monthly child support obligation or no less than $30 per 
  3.1   month if there is no current monthly child support obligation.  
  3.2   Compliance means that payments are made by the payment date. 
  3.3      The director and the commissioner of human services shall 
  3.4   develop procedures to implement clause (5).  
  3.5      Sec. 3.  Minnesota Statutes 2000, section 136A.121, 
  3.6   subdivision 9, is amended to read: 
  3.7      Subd. 9.  [AWARDS.] An undergraduate student who meets the 
  3.8   office's requirements is eligible to apply for and receive a 
  3.9   grant in any year of undergraduate study unless the student has 
  3.10  obtained a baccalaureate degree or previously has been enrolled 
  3.11  full time or the equivalent for eight semesters or 12 quarters, 
  3.12  excluding courses taken from a Minnesota school or 
  3.13  post-secondary institution which is not participating in the 
  3.14  state grant program and from which a student transferred no 
  3.15  credit.