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Rep. Jack D. Franks
Filed: 3/23/2015
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1 | | AMENDMENT TO HOUSE BILL 1311
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2 | | AMENDMENT NO. ______. Amend House Bill 1311 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 1. Short title. This Act may be cited as the |
5 | | Affordable College Financing Pilot Program Act. |
6 | | Section 5. Findings.
The General Assembly finds that many |
7 | | students and families struggle to afford the costs of college |
8 | | despite the programs available to assist them. Grant assistance |
9 | | and federal student loans, while offering critical financial |
10 | | support for students, are often insufficient to cover the full |
11 | | cost of attendance, particularly at the university level. In |
12 | | order to make State universities more accessible to Illinois |
13 | | students and to temper the challenges associated with student |
14 | | debt, the General Assembly hereby establishes a pilot, |
15 | | income-based student loan program to finance costs of |
16 | | attendance that are not funded by grants or federal student aid |
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1 | | and that exceed a family's ability to pay. The loan is intended |
2 | | to be repaid on a schedule designed to be affordable for the |
3 | | borrower, with payments based on the borrower's income.
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4 | | Section 10. Definitions. In this Act: |
5 | | "Borrower" means a person who has been awarded and accepts |
6 | | a program loan under this Act. |
7 | | "Cost of attendance" means the cost of attending a State |
8 | | university. |
9 | | "Commission" means the Illinois Student Assistance |
10 | | Commission. |
11 | | "Eligible student" means a person who is a resident of this |
12 | | State and has been accepted to or is enrolled in a State |
13 | | university and who has remaining need, as defined in this |
14 | | Section. |
15 | | "Expected family contribution" is the federally determined |
16 | | share of family income that can be expected to be used for |
17 | | college. |
18 | | "Fund" means the Affordable College Financing Pilot |
19 | | Program Fund. |
20 | | "Program" means the pilot program established under this |
21 | | Act. |
22 | | "Program loan" means a loan awarded by the Commission to an |
23 | | eligible student under the program. |
24 | | "Remaining need" is defined as the part of the cost of |
25 | | attendance not covered by the expected family contribution, |
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1 | | grants, or federal Stafford loans. |
2 | | Section 15. Pilot program.
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3 | | (a) Subject to the appropriation of funds for this purpose, |
4 | | the Commission shall implement and administer a pilot program |
5 | | to provide loans to 400 eligible students under this Act. The |
6 | | Commission shall conduct a lottery to determine which qualified |
7 | | applicants are to be awarded program loans in accordance with |
8 | | this Act. The lottery will be based on a stratified random |
9 | | sample to ensure equal participation by students in each of the |
10 | | 4 lower-income quintiles that are based on Illinois income data |
11 | | reported annually by the U.S. Census Bureau. Once a student has |
12 | | gained entry into the program, the loans will be available |
13 | | annually, as needed, for 4 years. These program loans are to be |
14 | | repaid, beginning 6 months after the borrower leaves school, on |
15 | | a schedule that is based on the income of the borrower. |
16 | | (b) The Affordable College Financing Pilot Program Fund is |
17 | | created as a special fund in the State treasury. All money in |
18 | | the Fund shall be used, subject to appropriation, by the |
19 | | Commission for awarding program loans and administering the |
20 | | program under this Act. The Fund shall consist of the repayment |
21 | | of program loans, interest earned on the moneys in the Fund, |
22 | | and other funds appropriated or made available to the Fund. |
23 | | (c) An eligible student must complete the Free Application |
24 | | for Federal Student Aid in order to apply for a program loan. |
25 | | The Commission may additionally develop and require a separate |
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1 | | application for a program loan. The program loan application |
2 | | shall be in such form as required by the Commission and shall |
3 | | include such information as required by the Commission. The |
4 | | Commission shall review the application and, if satisfied that |
5 | | the applicant is an eligible student and is not ineligible for |
6 | | loan assistance under subsections (a) and (b) of Section 35 of |
7 | | the Higher Education Student Assistance Act, shall award a |
8 | | program loan to the applicant if selected by lottery. Loans may |
9 | | be issued only from available funds. |
10 | | (d) The amount of a program loan shall be sufficient to |
11 | | cover the student's remaining need, as defined in Section 10. |
12 | | (e) The Commission may not charge interest on a program |
13 | | loan, but may charge a default insurance premium as provided in |
14 | | subsection (f) of this Section. |
15 | | (f) By accepting a program loan, an eligible student shall |
16 | | agree to repay the amount of the program loan, plus a default |
17 | | insurance premium amount to be determined by the Commission,
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18 | | subject to the following: |
19 | | (1) Repayment shall commence not later than 6 months |
20 | | after the eligible student leaves the State university. The |
21 | | Commission may establish rules for deferment and |
22 | | forbearance consistent with federal guidelines. |
23 | | (2) The monthly amount required to be repaid shall be |
24 | | based on a repayment schedule that the Commission shall by |
25 | | rule develop and shall be based on a percentage of the
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26 | | borrower's adjusted gross income. |
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1 | | (3) Monthly payments shall continue until the borrower |
2 | | has fully paid the amount of the program loan and the |
3 | | default insurance premium amount. |
4 | | (g) To administer the program, the Commission may exercise |
5 | | the same powers of collection as otherwise authorized by law. |
6 | | (h) The Commission shall forgive the repayment of a program |
7 | | loan if the borrower dies or becomes disabled. |
8 | | (i) The Commission may establish and administer, or |
9 | | contract with a third party to do so, a default insurance plan |
10 | | for program loans in which eligible students have defaulted on
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11 | | repayment of their program loans. |
12 | | Section 20. Progress reports. The Commission shall submit |
13 | | a progress report to the General Assembly 2 years after |
14 | | implementation of the program and 4 years after implementation
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15 | | of the program. The report shall describe the financial |
16 | | stability of the Fund and student success metrics utilized, |
17 | | both for initial loan awards and loan continuances within the |
18 | | program. The Commission shall track average cumulative debt and |
19 | | year-to-year student retention, and compare these numbers to a |
20 | | control group of similar students not participating in the |
21 | | program. The Commission shall also track and report the |
22 | | progress of borrowers throughout the repayment period. |
23 | | Section 90. Rules. The Commission may adopt any rules
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24 | | necessary to carry out its responsibilities under this Act.
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