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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2019 - 2020
Regular Session
MEMORANDUM
| Posted: | October 3, 2019 10:33 AM |
|---|---|
| From: | Senator Ryan P. Aument |
| To: | All Senate members |
| Subject: | Legislation to Establish a Student Loan Refinance Program |
| In the near future, I intend to introduce legislation that would establish a Student Loan Refinance Program to help address the student loan debt crisis for Pennsylvania residents. While tackling the student loan issue will take a multi-faceted approach, this particular program would be focused on those students who have graduated with a large amount of student debt, typically have high interest rates, and meet all program eligibility requirements. Specifically, the program would enable eligible participants – students who live in Pennsylvania, are employed, and have significant public and private college debt – to refinance onerous student loans based on their ability to pay given their respective career paths and current employment through the use of state-sponsored Income Share Agreements (ISA). In an ISA, the participant would commit to pay a specific share or percentage of their income for a period of time to pay off their loan. This type of repayment plan would be especially helpful for graduates whose student loans have high interest rates, allowing a more manageable repayment plan. To fund the ISAs, the program would authorize and direct the Pennsylvania Treasurer to create a revolving line of credit, using funds currently under the management of the Treasury, which would provide the liquidity necessary to implement the program and which would be repaid with program proceeds. The initial line of credit for this program will be capped and the program would not be funded by the issuance of General Obligation Debt or by tax revenue. Rather, it would leverage existing assets and be self-sustaining through the reinvestment of revenue generated by the program. The program would be administered by the Pennsylvania Higher Education Assistance Agency (PHEAA) in consultation with the Student Loan Refinance Program Advisory Committee, which will be composed of legislators and members of the Executive Branch. As we continue to look for additional ways to make college more affordable, please join me in co-sponsoring this proposal to provide a more favorable opportunity for graduates to repay their student loans. |
Introduced as SB1042