HB4205 102ND GENERAL ASSEMBLY

LRB102 20563 CMG 29431 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4205

Introduced 1/5/2022, by Rep. Katie Stuart - Barbara Hernandez

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.970 new

Creates the Loan Repayment Assistance Act. Requires the Illinois Student Assistance Commission to establish and administer a Loan Repayment Assistance Program for the purpose of providing loan repayment assistance to eligible applicants living and working in this State who have graduated from a high school located in this State and an institution of higher education located in this State or another state. On an annual basis, requires the Commission to receive and consider applications for loan repayment assistance under the Program and provide assistance if the Commission finds that the applicant (i) has graduated from a high school located in this State and from an institution of higher education located in this State or in another state as an undergraduate student with a cumulative grade point average of a 4.0 on a 4.0 scale, (ii) has been a resident of this State for at least 4 years after graduating from the institution of higher education, (iii) has been employed in this State for at least 4 years after graduating from the institution of higher education, and (iv) has eligible debt in grace or repayment status. Provides for the maximum amount of loan repayment assistance that may be provided. Provides that funds shall be distributed subject to the availability of appropriations. Sets forth requirements for loan forgiveness. Sets forth provisions concerning administration of the Program, ineligibility and the termination of funds, and other Commission powers. Amends the State Finance Act to create the Loan Repayment Assistance Fund as a special fund in the State treasury. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Loan Repayment Assistance Act.

Section 5. Definitions. In this Act:

"Commission" means the Illinois Student Assistance Commission.

"Eligible debt" means outstanding principal, interest, and related fees from loans obtained for undergraduate higher educational expenses made by government or commercial lending institutions or educational institutions. "Eligible debt" excludes loans made by a private individual or family member.

"Program" means the Loan Repayment Assistance Program.

"Institution of higher education" or "institution" has the meaning set forth in the Higher Education Housing and Opportunities Act.

Section 10. Loan Repayment Assistance Program.

(a) The Commission shall establish and administer a Loan Repayment Assistance Program for the purpose of providing loan repayment assistance to eligible applicants living and working in this State who have graduated from (i) a high school located in this State and (ii) an institution of higher education located in this State or another state.

(b) The Loan Repayment Assistance Fund is created as a special fund in the State treasury. The Fund shall consist of all money appropriated to the Fund and all money remitted to the Commission under the terms of this Act. All money in the Fund shall be used, subject to appropriation, by the Commission for the purposes of this Act.

(c) Subject to the availability of appropriations and subsections (d) and (e) of this Section, the Commission shall distribute funds to eligible applicants.

(d) The Commission is authorized to adopt all rules, policies, and procedures necessary or convenient for the administration of the Program and prescribe all terms and conditions applicable to payments made under this Act.

(e) The Commission shall administer the Program, including, but not limited to, establishing and implementing the following:

(1) An application process. Subject to the availability of appropriations, the Commission shall, each year, consider applications by eligible applicants for loan repayment assistance under the Program.

(2) Eligibility requirements. The Commission shall, on an annual basis, receive and consider applications for loan repayment assistance under the Program and provide assistance if the Commission finds that the applicant:

(A) has graduated from:

(i) a high school located in this State; and

(ii) an institution of higher education located in this State or another state as an undergraduate student with a cumulative grade point average of a 4.0 on a 4.0 scale (or the equivalent as determined by the Commission);

(B) has been a resident of this State for at least 4 years after graduating from the institution;

(C) has been employed in this State for at least 4 years after graduating from the institution; and

(D) has eligible debt in grace or repayment status.

(3) A maximum amount of loan repayment assistance for each participant, which shall be:

(A) $6,000 per year, up to a maximum of $30,000 during the participant's career, if the participant graduated from an institution of higher education located in this State; or

(B) $3,000 per year, up to a maximum of $15,000 during the participant's career, if the participant graduated from an institution of higher education located in another state.

(4) Prioritization. The Commission shall develop criteria for prioritization among eligible applicants if there are insufficient funds available to make payments to all eligible applicants under this Act. The prioritization criteria shall include the timeliness of the application, the applicant's salary level, the amount of the applicant's eligible debt, the availability of other loan repayment assistance to the applicant, the applicant's length of employment, and the applicant's prior participation in the Program.

(f) The distribution of funds available after administrative costs must be made by the Commission to eligible applicants in the following manner:

(1) Loan repayment assistance must be in the form of a forgivable loan.

(2) To have the loan forgiven, the participant shall (i) complete a year of residence and employment in this State and (ii) make educational debt payments (interest or principal or both) that equal at least the amount of assistance received under the Program during the assistance year.

(3) Each loan must be documented by means of a promissory note executed by the borrower in a form provided by the Commission and shall be forgiven when the participant meets the requirements set forth by the Commission.

Section 15. Ineligibility and termination of funds. If a participant becomes ineligible during the term of a loan received from the Commission, the participant must repay the outstanding amount of the loan received from the Commission. However, the Commission may, in its discretion, forgive the loan of a participant in whole or in part in certain circumstances as set forth in the Commission's written policies and guidelines.

Section 20. Other powers. The Commission may make, enter into, and execute contracts, agreements, leases, and other instruments with any person, including without limitation any federal, State, or local governmental agency, and may take other actions that may be necessary or convenient to accomplish any purpose authorized by this Act.

Section 90. The State Finance Act is amended by adding Section 5.970 as follows:

(30 ILCS 105/5.970 new)

Sec. 5.970. The Loan Repayment Assistance Fund.

Section 99. Effective date. This Act takes effect upon becoming law.