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PRINTER'S NO. 766
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
741
Session of
2015
INTRODUCED BY LEACH, HAYWOOD, SCHWANK, YUDICHAK, BREWSTER AND
FONTANA, APRIL 16, 2015
REFERRED TO EDUCATION, APRIL 16, 2015
AN ACT
Amending the act of August 7, 1963 (P.L.549, No.290), entitled,
as amended, "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.
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(b) The Pay It Forward Pay It Back Pennsylvania Program Fund
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. ยง 2301
(relating to definitions). The amount of the natural gas
severance tax shall be 5% 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
300% of the Federal poverty level, 100% of covered tuition.
(2) If the family income of the eligible student is between
300% and 450% of the Federal poverty level, 66% of covered
tuition.
(3) If the family income of the eligible student is between
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450% and 600% of the Federal poverty level, 33% 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 shall commence not later than 36 months after
the eligible student graduates from the approved institution of
higher education or becomes employed full time, whichever occurs
first. The 36-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 of one percent of their annual income, for
every year of community college attended; and
(ii) one and fifteen-one-hundredths percent of their annual
income for every year, of State university or State-related
university attended.
(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).
(4) Monthly payments shall continue until the borrower has
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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
administer the program, the agency shall make recommendations
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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.
"Program." The Pay It Forward Pay It Back Pennsylvania
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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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