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PRINTER'S NO. 355
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
100
Session of
2015
INTRODUCED BY WOZNIAK, TEPLITZ, SMITH, BREWSTER, COSTA, FARNESE,
YUDICHAK, WILLIAMS, RAFFERTY AND BROWNE, FEBRUARY 12, 2015
REFERRED TO EDUCATION, FEBRUARY 12, 2015
AN ACT
Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
act relating to the public school system, including certain
provisions applicable as well to private and parochial
schools; amending, revising, consolidating and changing the
laws relating thereto," establishing the Pennsylvania
Educated and Employed Loan Forgiveness Program; and imposing
powers and duties on the Pennsylvania Higher Education
Assistance Agency.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 10, 1949 (P.L.30, No.14), known
as the Public School Code of 1949, is amended by adding an
article to read:
ARTICLE XXII-B
PENNSYLVANIA EDUCATED AND EMPLOYED
LOAN FORGIVENESS PROGRAM
Section 2201-B. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Agency." The Pennsylvania Higher Education Assistance
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Agency.
"Approved institution of higher learning." An institution of
the State System of Higher Education or a community college as
defined under section 1901-A.
"Eligible applicant." An individual who:
(1) Holds an undergraduate degree from an institution of
higher learning.
(2) Resides in this Commonwealth.
(3) Is employed in this Commonwealth.
(4) Has a family income less than $70,000 annually.
Section 2202-B. Loan forgiveness program.
(a) Establishment of program.--The agency shall administer a
loan forgiveness program for eligible applicants on a Statewide
basis. The agency may provide loan forgiveness as provided in
subsection (b) for recipients of loans who by contract with the
agency agree, after graduating from an institution of higher
education with an undergraduate degree and for a period of five
years from the date they commence employment in this
Commonwealth, to continuously reside and be employed in this
Commonwealth, provided that their family income does not exceed
$70,000 annually.
(b) Loan forgiveness.--Agency-administered, federally
insured student loans for higher education provided to an
eligible applicant may be forgiven by the agency as follows:
(1) The agency may forgive 100% of the loan, not to
exceed $15,000, if a loan recipient enters into a contract
with the agency that requires the recipient to continuously
reside and be employed in this Commonwealth for a period of
not less than five consecutive years, provided that the
recipient's family income does not exceed $70,000 annually.
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(2) Loan forgiveness awards made pursuant to paragraph
(1) shall be forgiven over a period of five years at an
annual rate of 20% of the award and shall be made from funds
appropriated for this purpose.
(3) The contract entered into with the agency pursuant
to paragraph (1) shall be considered a contract with the
Commonwealth and shall include the following terms:
(i) An unemployed recipient shall apply for
employment in this Commonwealth at the earliest
practicable opportunity upon graduation.
(ii) Within six months after graduation, a recipient
shall reside and be employed in this Commonwealth
according to the terms of the loan forgiveness award.
(iii) The recipient shall agree to continuously
reside and be employed on a full-time basis in this
Commonwealth.
(iv) The recipient shall permit the agency to
determine compliance with the residency, employment and
income requirements and all other terms of the contract.
(v) Upon the recipient's death or total or permanent
disability, the agency shall nullify the employment
obligation of the recipient.
(vi) If the recipient is convicted of or pleads
guilty or no contest to a felony, the agency shall have
the authority to terminate the recipient's participation
in the program and demand repayment of the amount of the
loan as of the date of the conviction or determination.
(vii) If the family income of the recipient exceeds
$70,000 during any year of the five-year commitment in
the program, then the recipient shall pay 20% of the loan
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forgiveness award for each year, on such terms and
conditions as prescribed by the agency.
(viii) Loan recipients who fail to begin or complete
the obligations contracted for shall pay to the agency
the amount of the loan received under the terms of the
contract pursuant to this section. Providing false
information or misrepresentation on an application or
verification of residency, employment or income shall be
deemed a default. Determination as to the time of default
shall be made by the agency.
(4) Notwithstanding 42 Pa.C.S. ยง 8127 (relating to
personal earnings exempt from process), the agency may seek
garnishment of wages in order to collect the amount of the
loan following default under paragraph (3)(viii).
Section 2203-B. Tax applicability.
Loan forgiveness repayments received by a student shall not
be considered taxable income for purposes of Article III of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971.
Section 2. The sum of $10,000,000 is hereby appropriated to
the Pennsylvania Higher Education Assistance Agency for the
purpose of administering and providing loan forgiveness under
Article XXII-B of the act.
Section 3. This act shall take effect in 60 days.
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