OLR Bill Analysis

HB 5048 (as amended by House “A”)*

AN ACT CONCERNING THE BOARD OF GOVERNORS OF HIGHER EDUCATION.

SUMMARY:

This bill authorizes the Connecticut Student Loan Foundation (CSLF) to repay certain borrowers 10% of their federal student loans made or guaranteed by CSLF. Eligible borrowers must (1) be state residents at the time they apply for repayment, (2) meet any applicable income limitations and criteria for subsidized federal student loans under the Higher Education Act of 1965, (3) have successfully completed the program for which the loan was made, and (4) apply for repayment between July 1, 2005 and December 31, 2008. The loans must be for an academic period prior to July 1, 1979.

Any unspent appropriations for the repayment program that were transferred from the Department of Higher Education (DHE) to CSLF must be refunded to DHE on May 15, 2009.

*House Amendment “A” replaces the original bill (File 98), which changed references to “Board of Governors for Higher Education” to “Board of Governors of Higher Education” to conform to other statutes.

EFFECTIVE DATE: Upon passage

BACKGROUND

10% Loan Repayment Program

CSLF's 10% loan repayment program was eliminated in 1979. Before 1979, the law required CSLF to pay lending institutions the first 10% of subsidized federal student loans made to borrowers who had finished the educational program for which the loans were made. PA 79-416 limited the 10% repayments to Connecticut residents. While PA 79-430 effectively terminated the program, it required CSLF to make payments for loans applied for before July 1, 1979. The act also required CSLF to directly pay the borrower when he or she repaid the entire loan (CGS § 10a-206). In 2005, the legislature repealed the statutory references to this program (PA 05-184).

COMMITTEE ACTION

Higher Education and Employment Advancement Committee

Joint Favorable