SENATE BILL REPORT

 

 

                                   HJM 4015

 

 

BYRepresentatives Prince, Jacobsen, Miller, Basich, Wood, Van Luven, Doty and Baugher

 

 

Regarding student loans.

 

 

House Committe on Higher Education

 

 

Senate Committee on Higher Education

 

      Senate Hearing Date(s):March 22, 1989

 

Majority Report:  Do pass.

      Signed by Senators Saling, Chairman; Patterson, Vice Chairman; Bauer, Cantu, Smitherman, Stratton, von Reichbauer.

 

      Senate Staff:Scott Huntley (786-7421)

                  March 23, 1989

 

 

         AS REPORTED BY COMMITTEE ON HIGHER EDUCATION, MARCH 22, 1989

 

BACKGROUND:

 

Financial aid officers at institutions of postsecondary education determine whether a student is eligible for various financial aid programs.  One of their duties is certification of student eligibility to participate in the federal Guaranteed Student and PLUS loan programs.  However, they do not have the authority to deny these loans to any student who qualifies as needy.  Once a student is certified as needy, he or she may be granted a loan by banks participating in the loan programs.

 

The federal Department of Education has proposed restricting institutional eligibility to participate in federal student financial aid programs to those with high default rates on Guaranteed Student Loans.  This proposal would penalize students currently enrolled, even though they had no control over the actions of previous students, and aid officers had no power to grant or deny loans to those defaulting students.

 

One reason for high default rates is that some students are acquiring excessive loan burdens.

 

SUMMARY:

 

Members of the Washington Legislature ask Congress to permit institutions of higher education to deny the certification of federal student loan applications to students who have acquired excessive loan burdens.  Congress is also requested to provide other self-help programs, such as work-study programs, for those needy students.

 

Appropriation:    none

 

Revenue:    none

 

Fiscal Note:      none requested

 

Senate Committee - Testified: Representative Eugene Prince, prime sponsor (for)