Connecticut Seal

General Assembly

File No. 459

    January Session, 2017

Substitute House Bill No. 7212

House of Representatives, April 6, 2017

The Committee on Higher Education and Employment Advancement reported through REP. HADDAD of the 54th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING THE PROMOTION OF LOAN FORGIVENESS PROGRAMS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2017) (a) For purposes of this section:

(1) "Public service employer" means an organization, agency or entity that is a public service organization, including, but not limited to, each local and regional board of education. "Public service employer" does not include a federal or tribal nation government organization, agency or entity, or a tribal nation institution of higher education;

(2) "Employment certification form" means the form used by the United States Department of Education to certify an individual's employment at a public service organization for the purposes of the Public Service Loan Forgiveness program;

(3) "Public Service Loan Forgiveness program" means the loan forgiveness program as administered under 34 CFR 685.219, as amended from time to time;

(4) "Public service organization" means a public service organization as defined in 34 CFR 685.219, as amended from time to time;

(5) "Teacher Loan Forgiveness program" means a loan forgiveness program administered under 34 CFR 685.217, as amended from time to time; and

(6) "Student Loan Ombudsman" means the official designated within the Department of Banking under section 36a-25 of the general statutes.

(b) The Student Loan Ombudsman shall create and distribute informational materials that increase awareness of the Public Service Loan Forgiveness program and Teacher Loan Forgiveness program to public service employers. Such informational materials shall include, but need not be limited to, the following:

(1) A standardized letter to (A) notify employees of the eligibility and participation requirements of the Public Service Loan Forgiveness program or Teacher Loan Forgiveness program, and (B) recommend that employees contact a student loan servicer for additional information regarding such programs;

(2) A detailed fact sheet describing the Public Service Loan Forgiveness program or Teacher Loan Forgiveness program, and containing the telephone number and electronic mail address for the Student Loan Ombudsman, which an employee may use to report any alleged violations of the provisions of subsection (e) of this section; and

(3) A document containing frequently asked questions concerning the Public Service Loan Forgiveness program or Teacher Loan Forgiveness program and the answers to such questions.

(c) The Student Loan Ombudsman may distribute any document published by a federal agency that meets the requirements of informational materials set forth in subsection (b) of this section.

(d) The Student Loan Ombudsman shall make the informational materials described in subsection (b) or (c) of this section available on the Department of Banking's Internet web site. Each biennium the Student Loan Ombudsman shall verify the accuracy of the informational materials and update any informational materials that are incorrect or obsolete.

(e) A public service employer shall:

(1) Provide new employees with the informational materials described in subsection (b) or (c) of this section two weeks after the employee's start date by mail, electronic mail or in-person;

(2) Provide its employees with a copy of the employment certification form upon request of an employee; and

(3) Conspicuously display the fact sheet, described in subdivision (2) of subsection (b) of this section, on its premises.

(f) (1) All complaints received by the Student Loan Ombudsman regarding any alleged violations of the provisions of subsection (e) of this section by a public service employer shall be (A) investigated not later than thirty days after the complaint was made, and (B) made publically available. The Student Loan Ombudsman shall order corrective actions to a public service employer that has violated this section. A public service employer may contest such corrective actions ordered under this subdivision not later than fifteen days after its issuance.

(2) Nothing in this section shall be construed to affect the authority of the Attorney General to bring an action in a court of competent jurisdiction to enforce the provisions of this section.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2017

New section

HED

Joint Favorable Subst.

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill requires the Student Loan Ombudsman to compile and distribute information to public service employers, including local and regional boards of education, regarding two federal loan forgiveness programs. Since the compilation can be completed using existing federal materials, and distribution can be done electronically, it is anticipated that these tasks will not result in a fiscal impact. It should be noted that the Ombudsman position created in PA 15-62 has not yet been established within the Department of Banking.

It is anticipated that the distribution of materials provided by the Ombudsman to newly hired teachers has no fiscal impact to municipalities (boards of education) as this can be done electronically.

The Out Years

State Impact: None

Municipal Impact: None

OLR Bill Analysis

sHB 7212

AN ACT CONCERNING THE PROMOTION OF LOAN FORGIVENESS PROGRAMS.

SUMMARY

This bill requires public service employers to provide (1) informational materials about certain federal student loan forgiveness programs to newly hired employees within two weeks of their start date and (2) certain loan forgiveness certification forms to current employees upon request. The Department of Banking's student loan ombudsman (hereinafter “ombudsman”) must create or copy federally-designed informational materials, make them available online, and distribute them to public service employers.

The bill defines “public service employers” as organizations, agencies, or entities that are public service organizations, including local and regional boards of education (see BACKGROUND). The bill does not apply to federal or tribal nation government organizations, agencies, or entities; or tribal nation institutions of higher education.

The bill specifies that it (1) allows employees to report their employers to the ombudsman for alleged violations and (2) does not affect the attorney general's authority to pursue an action to enforce the bill's provisions.

EFFECTIVE DATE: July 1, 2017

LOAN FORGIVENESS INFORMATIONAL MATERIALS

Ombudsman Duties

The bill requires the ombudsman to distribute to public service employers informational materials that increase awareness about the federal Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness (TLF) programs (see BACKGROUND). At a minimum, these materials must include the following:

Under the bill, the ombudsman must either create such documents or use federal agency-designed documents that meet the above requirements. The bill also requires the ombudsman to make the documents available on the Department of Banking's website. Each biennium the ombudsman must verify the documents' accuracy and update any incorrect or obsolete information they contain.

Public Service Employer Duties

The bill requires public service employers to disseminate the ombudsman-provided informational materials to new employees within two weeks of their start date. Dissemination may occur by mail, email, or in person. Employers must also (1) provide the PSLF certification form to current employees upon request and (2) conspicuously display the ombudsman-provided fact sheet on its premises.

Under the bill, if the ombudsman receives a complaint of an alleged violation by an employer, it must be investigated within 30 days and made publicly available. The ombudsman must issue corrective actions to an employer for a violation, and the employer may contest the order within 15 days of its issuance.

BACKGROUND

Public Service Organization

As defined in federal regulation, a “public service organization” for purposes of public service loan forgiveness is the following:

Such public services include, among others, emergency management, military service, public safety, public interest law, early childhood education, public service for individuals with disabilities and the elderly, public health, public education, and public library services (34 C.F.R. 685.219(b)).

Public Service Loan Forgiveness

This federal program forgives the remaining balance of certain federal student loans after 10 years of monthly payments for individuals who work full-time for public service employers. The first group of individuals will be eligible for loan forgiveness in October 2017 (34 C.F.R. 685.219).

Teacher Loan Forgiveness

This federal program forgives up to a total of $17,500 for certain federal student loans for individuals who teach full-time for five consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families and meet other qualifications (34 C.F.R. 685.217).

COMMITTEE ACTION

Higher Education and Employment Advancement Committee

Joint Favorable Substitute

Yea

14

Nay

7

(03/21/2017)

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