1Amending the act of August 7, 1963 (P.L.549, No.290), entitled,
2as amended, "An act creating the Pennsylvania Higher
3Education Assistance Agency; defining its powers and duties;
4conferring powers and imposing duties on the Governor,
5President Pro Tempore of the Senate, Speaker of the House of
6Representatives, Superintendent of Public Instruction and the
7Department of Auditor General; and making appropriations,"
8establishing the Pay It Forward Pay It Back Pennsylvania
9Program; imposing a natural gas severance tax; and
10establishing the PFPB Fund.

11The General Assembly of the Commonwealth of Pennsylvania
12hereby enacts as follows:

13Section 1. The act of August 7, 1963 (P.L.549, No.290),
14referred to as the Pennsylvania Higher Education Assistance
15Agency Act, is amended by adding a section to read:

16Section 5.11. Pay It Forward Pay It Back Pennsylvania
17Program.--(a) The Pay It Forward Pay It Back Pennsylvania
18Program is established by the agency in order to provide loans
19to eligible students under this section, which loans are to be
20repaid, in part, according to the income of the eligible
21students.

22(b) The Pay It Forward Pay It Back Pennsylvania Program Fund

1is established in the State Treasury. The moneys of the fund are
2hereby appropriated on a continuing basis to the agency for the
3sole purpose of awarding program loans. The fund shall consist
4of the taxes deposited under subsection (c), the repayment of
5program loans, interest earned on the moneys of the fund and
6other funds appropriated or made available to the fund.

7(c) A natural gas severance tax is imposed on every
8unconventional gas well as defined by 58 Pa.C.S. § 2301
9(relating to definitions). The amount of the natural gas
10severance tax shall be 5% of the gross value of units severed at
11the well head during a reporting period as provided in 58
12Pa.C.S. Ch. 23. The tax shall be collected by the Pennsylvania
13Public Utility Commission and deposited into the fund.

14(d) An eligible student may submit an application to the
15agency for a program loan. The application shall be in such form
16as required by the agency and shall include family income and
17such other information as required by the agency. The agency
18shall review the application and, if satisfied that the
19applicant is an eligible student and is not ineligible for loan
20assistance under section 4.1, shall award a program loan to the
21applicant.

22(e) The amount of a program loan shall be:

23(1) If the family income of the eligible student is below
24300% of the Federal poverty level, 100% of covered tuition.

25(2) If the family income of the eligible student is between
26300% and 450% of the Federal poverty level, 66% of covered
27tuition.

28(3) If the family income of the eligible student is between
29450% and 600% of the Federal poverty level, 33% of covered
30tuition.

1(f) The agency may not charge interest on a program loan.

2(g) By accepting a program loan, an eligible student shall
3agree to repay the amount of the program loan plus a default
4insurance premium amount to be determined by the agency subject
5to the following:

6(1) Repayment shall commence not later than 36 months after
7the eligible student graduates from the approved institution of
8higher education or becomes employed full time, whichever occurs
9first. The 36-month period may be extended by the agency if the
10borrower can demonstrate to the satisfaction of the agency that
11the borrower has made a good faith effort to obtain full-time
12employment but has been unable to do so. The duration of the
13extension shall be determined at the sole discretion of the
14agency.

15(2) The monthly amount required to be repaid shall be based
16on:

17(i) eight-tenths of one percent of their annual income, for
18every year of community college attended; and

19(ii) one and fifteen-one-hundredths percent of their annual
20income for every year, of State university or State-related
21university attended.

22(3) If at any time during the repayment period the borrower
23leaves the work force, except in the case of a disability, the
24monthly amount required to be repaid shall be based on one-half
25of the estimated annual taxable income of the borrower that is
26reportable to the Department of Revenue, subject to the
27limitation specified in paragraph (2).

28(4) Monthly payments shall continue until the borrower has
29fully paid the amount of the program loan and the default
30insurance premium amount.

1(5) The agency may defer repayment during any time period
2that the borrower is enrolled full time or part time in a
3postgraduate degree program at an institution of higher
4education.

5(h) For the purposes of administering the program, the
6agency may exercise the same powers of collection as otherwise
7authorized by this act.

8(i) The agency shall forgive the repayment of a program loan
9if the borrower dies or becomes disabled.

10(j) The agency may establish and administer, or contract
11with a third party to do so, a default insurance plan for
12program loans in which eligible students have defaulted on
13repayment of their program loans.

14(k) In the event that the moneys of the fund are less than
15the aggregate amount of program loans applied for in any year,
16the agency shall give priority in awarding program loans to
17those eligible students who satisfy the provisions of subsection
18(e)(1), (2) and (3), in that order.

19(l) Three years after the first program loan is awarded by
20the agency, and continuing every three years thereafter, the
21agency shall submit a report to the General Assembly. The report
22shall describe the financial stability of the fund and state
23whether the tax collected under subsection (c), together with
24other moneys of the fund, are sufficient to administer the
25program. If funds are sufficient to administer the program, the
26agency shall make recommendations for decreasing the rate of the
27tax under subsection (c). If funds are insufficient to
28administer the program, the agency shall make recommendations
29for increasing the rate of the tax under subsection (c).

30(m) As used in this section, the following words and phrases

1shall have the meanings given to them in this subsection unless
2the context clearly indicates otherwise:

3"Approved institution of higher education." Any of the
4following:

5(1) A community college operating under Article XIX-A of the
6act of March 10, 1949 (P.L.30, No.14), known as the Public
7School Code of 1949.

8(2) A university of the State System of Higher Education.

9(3) The Pennsylvania State University.

10(4) The University of Pittsburgh.

11(5) Temple University.

12(6) Lincoln University.

13(7) Any other educational institution designated as "State-
14related" by the Commonwealth.

15"Borrower." A person who has been awarded and accepts a
16program loan.

17"Covered tuition." The total sum charged for the credits
18required for attendance at an approved institution of higher
19education for a full-time undergraduate academic period. The
20term includes fees and other charges customarily imposed on all
21students, but does not include charges for room and board, books
22or supplies.

23"Eligible student." A person who is a resident of this State
24and has been accepted to or enrolled in an approved institution
25of higher education.

26"Fund." The Pay It Forward Pay It Back Pennsylvania Program
27Fund established by this section.

28"Program." The Pay It Forward Pay It Back Pennsylvania
29Program established by this section.

30"Program loan." A loan awarded by the agency to an eligible

1student under the program.

2Section 2. This act shall take effect in 60 days.