SB 271 — AN ACT CONCERNING STUDENT LOANS.

Senate General Assembly RaisedFile Bill No.

271163 February Session, 2022 LCOSenate Bill No.

2602271 ReferredSenate, toMarch 29, 2022 The Committee on BANKINGBanking Introducedreported by:through SEN.

(BA)MILLER ANof ACTthe CONCERNING27th STUDENTDist., LOANS.Chairperson of the Committee on the part of the Senate, that the bill ought to pass.

AN ACT CONCERNING STUDENT LOANS.

Such eligibility criteria and guidelines shall include, but need not be limited to, (1) applicant eligibility, (2) interest rate subsidies and principal limits onSB271 authority/ loansFile offered under the program, (3) the process for LCO 2602 \\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00271-R01 of 2 SB.docx Raised Bill No.

271163 verifying1 theSB271 employmentFile ofNo. applicants, and (4) the requirement that an interest rate subsidy through the program shall terminate for any subsidy recipient who ceases to meet the requirements of such program during the term of such recipient's loan from the authority.

163 on authority loans offered under the program, (3) the process for verifying the employment of applicants, and (4) the requirement that an interest rate subsidy through the program shall terminate for any subsidy recipient who ceases to meet the requirements of such program during the term of such recipient's loan from the authority.

2 July 1, 2022 New section BA Joint Favorable LCOSB271 2602/ {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-002712File ofNo. 2 R01-SB.docx }

163 2 SB271 File No.

163 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:

Agency Affected Fund-Effect FY 23 $ FY 24 $ CHESLA CHESLA - Cost See Below See Below Municipal Impact:

None Explanation The bill, which requires the Connecticut Higher Education Supplemental Loan Authority (CHESLA) to establish a Hero Loan Subsidy Program, results in a cost to CHESLA as they currently do not have funds available for this program.

The cost to CHESLA would be based on the number of eligible applicants and the amount of the loans and is expected to exceed one million dollars.

CHESLA is a quasi-public agency that does not receive General Fund support from the state.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the number of eligible applicants and loans awarded.

SB271 / File No.

163 3 SB271 File No.

163 OLR Bill Analysis SB 271 AN ACT CONCERNING STUDENT LOANS.

SUMMARY This bill requires the Connecticut Higher Education Supplemental Loan Authority (CHESLA) to:

1.

establish a Hero Loan Subsidy Program, subject to available funding, to provide education loans with reduced interest rates to people in certain professions and 2.

maintain a separate, non-lapsing account to hold funds for the programthatarerequiredbylawtobedepositedthere,including any state appropriation or bond sale proceeds.

Under the bill, the loan program applies to licensed nurses, nurse’s aides, social workers, and police officers and firefighters (see BACKGROUND) who meet eligibility criteria CHESLA and the education commissioner jointly establish.

EFFECTIVE DATE:

July 1, 2022 PROGRAM GUIDELINES & ELIGIBILITY CRITERIA Under the bill, CHESLA must enter into a memorandum of agreement with the education commissioner to establish program administrative guidelines and eligibility criteria.

The guidelines and criteria must include:

1.

applicant eligibility, 2.

interest rate subsidies and principal limits on program loans, 3.

an employment verification process, and 4.

a requirement that an interest rate subsidy ends for a recipient who no longer meets the program’s eligibility requirements during the loan’s term.

SB271 / File No.

163 4 SB271 File No.

163 ACCOUNT EXPENDITURES The bill requires money in the account to be used to:

1.

fund the Hero Loan Subsidy Program, including reasonable and necessary administrative expenses;