PRINTER'S NO. 996
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
984
Session of
2021
INTRODUCED BY PASHINSKI, HILL-EVANS, KINSEY, SHUSTERMAN, CIRESI,
SCHLOSSBERG, HOWARD, SANCHEZ, CONKLIN, HOHENSTEIN, DEASY,
WARREN, BURGOS, D. WILLIAMS, LEE, ISAACSON, GUENST AND
SCHWEYER, MARCH 19, 2021
REFERRED TO COMMITTEE ON EDUCATION, MARCH 19, 2021
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," providing for Delayed Payment Plan
Program; and establishing the Delayed Payment Plan Program
Fund.
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 XIX-I
DELAYED PAYMENT PLAN PROGRAM
Section 1901-I. 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.
"Department." The Department of Education of the
Commonwealth.
"Fund." The Delayed Payment Plan Program Fund established
under section 1905-I.
"Income." Salary, wages, interest, dividends and other
earnings that are reportable for Federal income tax purposes.
"Income share agreement." An agreement between the agency
and a student under which the student commits to pay a specified
percentage of the student's future income, for a specified
period of time, in addition to the requirements and terms
specified under sections 1903-I and 1906-I, in exchange for
payments to, or on behalf of, the student for a portion of the
student's tuition for attendance at the institution of higher
education.
"Institution of higher education." As defined under section
118(c).
"Participating institution." A participating institution of
higher education.
"Program." The Delayed Payment Plan Program established
under section 1902-I.
"Tuition." A sum of money charged for teaching or
instruction by a school, college or university.
Section 1902-I. Establishment of program.
Subject to receipt of grants, contributions or amounts
appropriated specifically for this purpose, the Delayed Payment
Plan Program is established. The agency may enter into an income
share agreement with students accepted for enrollment at any of
the 15 Pennsylvania State community colleges or the Thaddeus
Stevens College of Technology beginning with the 2021-2022
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academic year. The agency may decide to offer the program to
students accepted or enrolled in any of the 14 PASSHE
institutions beginning with the 2026-2027 school year.
Section 1903-I. Eligibility requirements.
In order to qualify for participation in the program, a
student must meet all of the following requirements:
(1) The student must be a resident of this Commonwealth,
as defined by the Pennsylvania State Grant Program.
(2) The student must agree to remain a resident of this
Commonwealth 10 years after graduation or until the tuition
is repaid, whichever occurs first.
(3) The student must pursue a degree in a high-need
area, as identified by the participating institution and
approved by the agency.
(4) The student demonstrates Federal Direct Student Loan
eligibility.
Section 1904-I. Powers and duties of agency.
The agency shall have the following powers and duties:
(1) Impose reasonable limits on the terms of income
share agreements.
(2) Partner with participating institutions of higher
education to publicize the availability of the program to
students and to select participants for the program, subject
to the number of students that may be supported by the fund.
(3) Distribute income share agreement program money to
participating institutions of higher education based on the
total annual tuition cost for participating students.
(4) Contract with a program administrator for execution
of income share agreements.
(5) Ensure transparency in investment decisions and
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processes.
(6) Make, execute and deliver contracts, conveyances and
other instruments necessary to the exercise and discharge of
the agency's powers and duties under this article.
Section 1905-I. Delayed Payment Plan Program Fund.
(a) Establishment.--The Delayed Payment Plan Program Fund is
established within the State Treasury, from which income share
agreement money shall be disbursed to program administrators
through the agency. Expenditures from the fund may be used only
for the program. Administrative costs for the program may not
exceed $400,000 in the first year of the program or $300,000
annually thereafter. Only the agency may authorize expenditures
from the fund.
(b) Sources of fund.--The fund may consist of:
(1) Grants and contributions from private sources.
(2) Appropriations made to the fund by the General
Assembly.
(3) Money collected under income share agreements.
(4) Interest on money deposited into the fund.
(5) An annual appropriation of $45,000,000 from the
General Fund by the General Assembly.
(c) Grants.--The agency may solicit and accept grants and
contributions from private sources for deposit into the fund.
Section 1906-I. Income share agreement terms.
An income share agreement entered into under this article
must:
(1) Specify the period of repayment, which shall not
exceed 10 years and shall commence six months after the later
of graduation of the student from:
(i) A participating institution of higher education
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upon successful completion of a degree, diploma or
certificate program.
(ii) A four-year institution of higher education, if
the student is admitted to the four-year institution of
higher education within six months of completing required
coursework or at the discretion of the agency.
(2) Except as provided under paragraph (5), provide that
no monthly payment be owed by the student for any period of
time during which the student's annual income is equal to or
less than $30,000.
(3) Specify the terms and conditions under which the
student may extinguish the student's repayment obligation
under the agreement before the end of the repayment period.
(4) Specify that the student be required to repay a
minimum of 2% of future annual income for 10 years or when
the tuition is repaid, whichever occurs first.
(5) Provide that a student with an outstanding balance
at the end of the 10-year period under paragraph (4) be
required to repay the remaining balance plus 3.5% annualized
interest on the remaining balance until repaid.
(6) Specify a cap on the total amount that a student be
required to repay under the agreement, which may not exceed
200% of the amount provided to the student under the income
share agreement.
(7) Specify that a student's obligation under an income
share agreement may be forgiven if the student meets either
of the following:
(i) Is unable to engage in any substantial gainful
activity by reason of any medically determinable physical
or mental impairment that:
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(A) can be expected to result in death;
(B) has lasted for a continuous period of not
less than 60 months; or
(C) can be expected to last for a continuous
period of not less than 60 months.
(ii) Has been determined by the United States
Secretary of Veterans Affairs to be unemployable due to a
service-connected disability.
(8) Specify that a student's obligation under an income
share agreement be discharged if the student dies.
(9) Specify that an income share agreement is not a debt
instrument.
(10) Provide that a participating student who does not
complete coursework after five years be required to repay the
student's outstanding balance in full plus 3.5% annualized
interest, unless the student meets any of the criteria
specified in paragraph (7).
Section 1907-I. Notification to student.
An income share agreement is not in compliance with this
article unless the student, prior to entering into the income
share agreement, is provided with written notification that
clearly states all of the following:
(1) that the income share agreement is not a debt
instrument;
(2) that the amount the student will be required to pay
under the income share agreement may be more or less than the
amount provided to the student, but shall not be more than
the cap determined under section 1906-I(6);
(3) the terms and conditions under which the student may
extinguish the student's repayment obligation under the
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income share agreement before the end of the repayment
period;
(4) the duration of the student's obligation under the
income share agreement;
(5) the percentage of the student's future annual income
that the student is committing to pay under the income share
agreement, as determined under section 1906-I(4) and the
minimum amount of annual income that triggers the student's
repayment obligation under the income share agreement; and
(6) the definition of "income" used to calculate the
student's repayment obligation.
Section 1908-I. Reports.
(a) Initial report.--The agency, in consultation with
participating institutions of higher education, shall submit a
report to the Appropriations Committee of the Senate, the
Appropriations Committee of the House of Representatives, the
Education Committee of the Senate and the Education Committee of
the House of Representatives no later than March 1, 2025. The
report shall include, but not be limited to:
(1) The number of students, by credit level, who have
entered into an income share agreement with a participating
institution of higher education.
(2) The average amount of money provided to students
under income share agreements.
(3) A complete count, by course of study, of all
students who have entered into an income share agreement with
a participating institution of higher education.
(b) Further report.--The agency, in consultation with
participating institutions of higher education and the
department, shall submit a report to the Appropriations
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Committee of the Senate, the Appropriations Committee of the
House of Representatives, the Education Committee of the Senate
and the Education Committee of the House of Representatives no
later than March 1, 2030. The report shall include, but not be
limited to:
(1) The number of students, by credit level, who have
entered into an income share agreement with the participating
institution of higher education.
(2) The number of graduates who entered into an income
share agreement with participating institutions of higher
education, the average and range of annual incomes of those
graduates and the average and range of the monthly payments
under income share agreements.
(3) The balance of the fund established under section
1905-I.
Section 2. This act shall take effect in 60 days.
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