AN ACT Relating to loans for teacher candidates and for public school teachers; and adding new sections to chapter 28B.15 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Unless the context clearly requires otherwise, the definitions in this section apply throughout sections 2 through 4 of this act.

(1) "Institution of higher education" or "institution" means a college or university in the state of Washington which is accredited by an accrediting association recognized as such by rule of the higher education coordinating board.

(2) "Board" means the higher education coordinating board.

(3) "Eligible student" means a student who is registered for at least ten credit hours or the equivalent, demonstrates achievement of a 3.00 grade point average for each academic year, is a resident student as defined by RCW 28B.15.012 through 28B.15.015, is a "needy student" as defined in RCW 28B.10.802, and who has a declared intention to complete an approved preparation program leading to initial teacher certification or required for earning an additional endorsement, or a college or university graduate who meets the same credit hour and "needy student" requirements and is seeking an additional teaching endorsement or initial teacher certification.

(4) "Public school" means an elementary school, a middle school, junior high school, or high school within the public school system referred to in Article IX of the state Constitution.

(5) "Forgiven" or "to forgive" or "forgiveness" means to render service as a teacher at a public school in the state of Washington in lieu of loan repayment.

(6) "Satisfied" means paid-in-full.

(7) "Borrower" means an eligible student who has received a loan under section 2 of this act.

NEW SECTION. Sec. 2. (1) The board may make long-term loans to eligible students at institutions of higher education from the funds appropriated to the board for this purpose. The amount of any such loan shall not exceed the demonstrated financial need of the student or two thousand five hundred dollars for each academic year, whichever is less, and the total amount of such loans to an eligible student shall not exceed ten thousand dollars. The interest rates and terms of forgiveness of such loans shall be consistent with the terms of the guaranteed loan program established by 20 U.S.C. Sec. 1701 et seq. The period for repaying the loan principal and interest shall be ten years with payments accruing quarterly commencing nine months from the date the borrower completes the course of study. The entire principal and interest of each loan payment shall be forgiven for each payment period in which the borrower teaches in a public school in this state until the entire loan is satisfied or the borrower ceases to teach at a public school in this state. Should the borrower cease to teach at a public school in this state before the time at which the principal and interest on the loan are satisfied, payments on the unsatisfied portion of the principal and interest on the loan shall begin the next payment period and continue until the remainder of the loan is satisfied.

(2) The board is responsible for collection of loans made under subsection (1) of this section and shall exercise due diligence in such collection, maintaining all necessary records to insure that maximum repayments are made. Collection and servicing of loans under subsection (1) of this section shall be pursued using the full extent of the law, including wage garnishment if necessary, and shall be performed by entities approved for such servicing by the Washington student loan guaranty association or its successor agency. The board is authorized and responsible to forgive all or parts of loans granted under the criteria established in subsection (1) of this section and shall maintain all necessary records of forgiven payments.

(3) Receipts from the payment of principal or interest or any other subsidies to which the board as lender is entitled, which are paid by or on behalf of borrowers under subsection (1) of this section, shall be deposited with the higher education coordinating board and shall be used to cover the costs of making the loans under subsection (1) of this section, maintaining necessary records, and making collections under subsection (2) of this section. The board shall maintain accurate records of these costs, and all receipts beyond those necessary to pay such costs shall be used to make loans to eligible students.

(4) The board shall adopt necessary rules to implement this section.

NEW SECTION. Sec. 3. The board and institutions of higher education shall work cooperatively to implement section 2 of this act and to publicize this program to eligible students.

NEW SECTION. Sec. 4. No loans shall be made after June 30, 1994, until the program is reviewed by the legislative budget committee and is reenacted by the legislature.

NEW SECTION. Sec. 5. Sections 1 through 4 of this act are each added to chapter 28B.15 RCW.