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PRINTER'S NO. 139
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
183
Session of
2019
INTRODUCED BY LEACH, BREWSTER, COSTA, SANTARSIERO, HAYWOOD,
HUGHES AND YUDICHAK, FEBRUARY 1, 2019
REFERRED TO EDUCATION, FEBRUARY 1, 2019
AN ACT
Amending the act of August 7, 1963 (P.L.549, No.290), entitled
"An act creating the Pennsylvania Higher Education Assistance
Agency; defining its powers and duties; conferring powers and
imposing duties on the Governor, President Pro Tempore of the
Senate, Speaker of the House of Representatives,
Superintendent of Public Instruction and the Department of
Auditor General; and making appropriations," establishing the
Pay It Forward Pay It Back Pennsylvania Program; imposing a
natural gas severance tax; and establishing the Pay It
Forward Pay It Back Pennsylvania Program Fund.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of August 7, 1963 (P.L.549, No.290),
referred to as the Pennsylvania Higher Education Assistance
Agency Act, is amended by adding a section to read:
Section 5.11. Pay It Forward Pay It Back Pennsylvania
Program.--(a) The Pay It Forward Pay It Back Pennsylvania
Program is established by the agency in order to provide loans
to eligible students under this section, which loans are to be
repaid, in part, according to the income of the eligible
students.
(b) The Pay It Forward Pay It Back Pennsylvania Program Fund
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is established in the State Treasury. The moneys of the fund are
hereby appropriated on a continuing basis to the agency for the
sole purpose of awarding program loans. The fund shall consist
of the taxes deposited under subsection (c), the repayment of
program loans, interest earned on the moneys of the fund and
other funds appropriated or made available to the fund.
(c) A natural gas severance tax is imposed on every
unconventional gas well as defined by 58 Pa.C.S. § 2301
(relating to definitions). The amount of the natural gas
severance tax shall be five per cent of the gross value of units
severed at the well head during a reporting period as provided
in 58 Pa.C.S. Ch. 23 (relating to unconventional gas well fee).
The tax shall be collected by the Pennsylvania Public Utility
Commission and deposited into the fund.
(d) An eligible student may submit an application to the
agency for a program loan. The application shall be in such form
as required by the agency and shall include family income and
such other information as required by the agency. The agency
shall review the application and, if satisfied that the
applicant is an eligible student and is not ineligible for loan
assistance under section 4.1, shall award a program loan to the
applicant.
(e) The amount of a program loan shall be:
(1) If the family income of the eligible student is below
three hundred per cent of the Federal poverty level, one hundred
per cent of covered tuition.
(2) If the family income of the eligible student is between
three hundred per cent and four hundred fifty per cent of the
Federal poverty level, sixty-six per cent of covered tuition.
(3) If the family income of the eligible student is between
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four hundred fifty per cent and six hundred per cent of the
Federal poverty level, thirty-three per cent of covered tuition.
(f) The agency may not charge interest on a program loan.
(g) By accepting a program loan, an eligible student shall
agree to repay the amount of the program loan plus a default
insurance premium amount to be determined by the agency subject
to the following:
(1) Repayment of a program loan shall commence not later
than thirty-six months after the eligible student graduates from
the approved institution of higher education or becomes employed
full time, whichever occurs first. The thirty-six-month period
may be extended by the agency if the borrower can demonstrate to
the satisfaction of the agency that the borrower has made a good
faith effort to obtain full-time employment but has been unable
to do so. The duration of the extension shall be determined at
the sole discretion of the agency.
(2) The monthly amount required to be repaid shall be based
on:
(i) eight-tenths per cent of the borrower's annual income
for every year that the eligible student attended community
college; and
(ii) one and fifteen-hundredths per cent of the borrower's
annual income for every year that the eligible student attended
a State university or State-related university.
(3) If at any time during the repayment period the borrower
leaves the work force, except in the case of a disability, the
monthly amount required to be repaid shall be based on one-half
of the estimated annual taxable income of the borrower that is
reportable to the Department of Revenue, subject to the
limitation specified in paragraph (2).
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(4) Monthly payments shall continue until the borrower has
fully paid the amount of the program loan and the default
insurance premium amount.
(5) The agency may defer repayment during any time period
that the borrower is enrolled full time or part time in a
postgraduate degree program at an institution of higher
education.
(h) For the purposes of administering the program, the
agency may exercise the same powers of collection as otherwise
authorized by this act.
(i) The agency shall forgive the repayment of a program loan
if the borrower dies or becomes disabled.
(j) The agency may establish and administer, or contract
with a third party to do so, a default insurance plan for
program loans in which eligible students have defaulted on
repayment of their program loans.
(k) In the event that the moneys of the fund are less than
the aggregate amount of program loans applied for in any year,
the agency shall give priority in awarding program loans to
those eligible students who satisfy the provisions of subsection
(e)(1), (2) and (3), in that order.
(l) Three years after the first program loan is awarded by
the agency, and continuing every three years thereafter, the
agency shall submit a report to the General Assembly. The report
shall describe the financial stability of the fund and state
whether the tax collected under subsection (c), together with
other moneys of the fund, are sufficient to administer the
program. If funds are sufficient to administer the program, the
agency shall make recommendations for decreasing the rate of the
tax under subsection (c). If funds are insufficient to
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administer the program, the agency shall make recommendations
for increasing the rate of the tax under subsection (c).
(m) As used in this section, the following words and phrases
shall have the meanings given to them in this subsection unless
the context clearly indicates otherwise:
"Approved institution of higher education." Any of the
following:
(1) A community college operating under Article XIX-A of the
act of March 10, 1949 (P.L.30, No.14), known as the "Public
School Code of 1949."
(2) A university of the State System of Higher Education.
(3) The Pennsylvania State University.
(4) The University of Pittsburgh.
(5) Temple University.
(6) Lincoln University.
(7) Any other educational institution designated as "State-
related" by the Commonwealth.
"Borrower." A person who has been awarded and accepts a
program loan.
"Covered tuition." The total sum charged for the credits
required for attendance at an approved institution of higher
education for a full-time undergraduate academic period. The
term includes fees and other charges customarily imposed on all
students, but does not include charges for room and board, books
or supplies.
"Eligible student." A person who is a resident of this State
and has been accepted to or enrolled in an approved institution
of higher education.
"Fund." The Pay It Forward Pay It Back Pennsylvania Program
Fund established by this section.
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"Program." The Pay It Forward Pay It Back Pennsylvania
Program established by this section.
"Program loan." A loan awarded by the agency to an eligible
student under the program.
Section 2. This act shall take effect in 60 days.
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