Bill would require some Alaska students to repay scholarships

JUNEAU — Lawmakers are considering a bill that would require students to repay state scholarships and grants if they fail to graduate within six years of starting their programs.

Members of the House Education Committee on Monday questioned Rep. Tammie Wilson, R-North Pole, and Diane Barrans, executive director of the Alaska Commission of Postsecondary Education and directs the Alaska Student Loan Corporation, on the effects of the bill.

The measure would put the time limit requirements on students who receive money from an Alaska Performance Scholarship or an Alaska Education Grant. Wilson said students who accept the state’s financial gifts have an obligation to finish programs within a reasonable time. Barrans said the bill’s current language lacked definition and could discourage needy students from applying for aid.

Barrans drafted the fiscal note for the bill and said it would require software upgrades that could cost the state $800,000 to implement and require more than $80,000 a year to maintain. In addition, Barrens said management of the new program would require two new full-time staff members to manage communication, work with schools, oversee collections and billing services, and verify degrees. She estimated the new changes could cost more than $160,000 a year.

Barrans said after the meeting, the current scholarship and grant programs require relatively little administration.

“You basically have to identify the eligible pool and push money out the door. We’ve absorbed that with existing staff,” she said.

The new program required by the bill could require significantly more staff time.

“What this bill proposes is to create a new, sizeable program which would involve creation of thousands of accounts,” Barrans said, calling it a complex program structure that needed to be paid for by something other than money from the Alaska Student Loan Corporation. “If the state wants to create new programs that are a relatively high cost, the state needs to pay for that with something other than student loan corporation receipts.”

Wilson said the fiscal note was not accurate.

“I think it’s probably one of the most insane fiscal notes I have ever seen,” Wilson said. “They have 99 (full time employees) already employed in that division and I will be speaking to them on why they believe they need more people. Also, $800,000 to change a computer program? I think we can probably get a computer programmer from anywhere to make the program for a lot less than that and manage it.”

Barrans said the cost estimate was based on the complexity of the two systems used to service state loans and the Alaska student aid portal.

“We built that system,” she said. “The cost was based on our actual experience.”

Another critic of the bill, University of Alaska Fairbanks provost Susan Henrichs, gave written comments to the bill asking why there is no allowance built into the bill for students with health or family issues.

“What about students who have a serious illness, or must care for an ill family member? What if a student was called upon to care for younger siblings on the death of a parent? Many such situations arise with UA students,” Henrichs wrote.

Henrichs said the bill seemed to assume that money is wasted if a student doesn’t graduate. However, she said, the performance scholarship has requirements for satisfactory academic progress, so the money doesn’t get passed along to the student unless he or she is passing classes.

“There is already a substantial incentive to complete within six years, because a student is only eligible for funding for six years,” Henrichs wrote.

The House Education Committee will schedule another hearing on the measure.

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