06 LC 28
2743
Senate
Bill 605
By:
Senators Harp of the 29th, Hamrick of the 30th, Henson of the 41st, Balfour of
the 9th, Adelman of the 42nd and others
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Part 3 of Article 7 of Chapter 3 of Title 20 of the Official Code of
Georgia Annotated, relating to the Georgia Student Finance Authority, so as to
provide for direct loans to students for attendance at certain postsecondary
institutions at the rate of 1 percent annually; to provide for definitions; to
provide for the maximum amount of such loans; to provide for eligibility
requirements; to provide for the random selection of recipients of such loans
from eligible applicants; to provide for a fund for such loans that is separate
from the general loan fund; to provide for related matters; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Part
3 of Article 7 of Chapter 3 of Title 20 of the Official Code of Georgia
Annotated, relating to the Georgia Student Finance Authority, is amended in
Subpart 3, relating to educational loans financed by state funds, by striking
subsection (a) of Code Section 20-3-373, relating to the general loan fund for
education loans financed by state funds, and inserting in lieu thereof the
following:
"(a)
The authority shall maintain a general loan fund to which shall be
credited:
(1)
State funds appropriated for use by the authority for educational loan purposes
under this
subpart other than service cancelable
loans;
(2)
Unrestricted moneys received by gift or otherwise and other moneys available for
and determined by the authority to be used for the purposes of this Code
section;
(3)
Outstanding educational loans held by the authority under this subpart as to
which the borrower does not have a right to repay and cancel the loan through
services rendered;
(4)
Principal collected on all educational loans held by the authority under this
subpart, including the principal portion of payments received from the
corporation in discharge of its guaranty liability on such loans;
and
(5)
Such amounts as may be transferred to the fund from the service cancelable loan
fund or the administration fund of the authority.
The
authority is authorized to use moneys available in the fund to make guaranteed
educational loans to eligible students and parents in accordance with its rules
and regulations and Part 2 of this article. The authority is further
authorized, under such limited circumstances as it may prescribe, to use moneys
available in the fund to purchase guaranteed educational loans made by other
lenders under Part 2 of this article and to sell guaranteed educational loans
made or owned by the authority to eligible
lenders."
SECTION
2.
Said
part is further amended by inserting a new subpart to be designated Subpart 4A,
to read as follows:
"Subpart
4A
20-3-400.
As
used in this subpart, the term:
(1)
'Cost of attendance' of a student means the cost of attendance calculated in
accordance with Title IV.
(2)
'Eligible high school' has the same meaning as set out in Code Section
20-3-519.
(3)
'Eligible postsecondary institution' means:
(A)
A unit of the University System of Georgia that offers associate or
baccalaureate degrees; or
(B)
An institution of higher education located in this state that offers associate
or baccalaureate degrees; that is accredited by a regional accrediting agency
recognized by the United States Department of Education; that is not a Bible
school or college; that admits as regular students only persons who have a high
school diploma, a general educational development (GED) diploma, or a degree
from an accredited postsecondary institution; and whose students are eligible to
participate in the federal Pell Grant program.
(4)
'Expected family contribution' means expected family contribution calculated in
accordance with Title IV.
(5)
'Title IV' means Title IV of the federal Higher Education Act of 1965, as
amended, 20 U.S.C.A. Section 1070, et seq.
20-3-401.
(a)
The authority is authorized to provide direct loans to students in accordance
with the provisions of this subpart and regulations of the authority promulgated
to implement this subpart.
(b)
The interest rate for loans provided in accordance with this subpart shall be 1
percent annually.
(c)
The maximum amount of a loan under this subpart shall be the lesser of:
$10,000.00 per year; or the cost of attendance of a student minus the expected
family assistance and the estimated amount of the
student́s
other loans, grants, and scholarships, including loans, grants, and scholarships
provided under Title IV. Each applicant for a loan shall be required to apply
for other educational assistance, including scholarships, grants, and other
loans, and to provide information regarding such other applications and the
result of such applications as a condition of applying for a loan under this
subpart. Loans under this subpart are designed as funding of the last resort
for students who have diligently sought scholarships, grants, and other
loans.
(d)
Eligibility for a loan under this subpart shall be determined annually. A
student who has graduated from an eligible high school shall be eligible for a
loan for the first year of attendance at an eligible postsecondary institution
if the student graduated from an eligible high school before May 1, 2007, with a
cumulative grade average of at least a 75 numeric average in his or her core
curriculum subjects or if a student graduated from an eligible high school on or
after May 1, 2007, with a cumulative grade point average in the
student́s
core curriculum subjects of at least 2.5 on a 4.0 scale. A
student́s
cumulative grade average or grade point average shall be calculated by the
methods set out in Code Section 20-2-157. A student who has earned a cumulative
grade point average of at least 2.0 at an eligible postsecondary institution
shall be eligible for a loan for a second or a subsequent year of attendance at
an eligible postsecondary institution.
20-3-402.
(a)
The authority shall maintain a fund for loans in accordance with this subpart to
which shall be credited:
(1)
State funds appropriated for use for loans under this subpart;
(2)
Moneys received by gift or otherwise for loans under this subpart;
(3)
Outstanding educational loans held by the authority under this subpart;
and
(4)
Principal and interest collected on educational loans held by the authority
under this subpart.
(b)
Beginning with the first fiscal year following the fiscal year in which the fund
has a balance of $500,000.00 or more, for each fiscal year, the authority shall
determine the amount of moneys available for loans under this subpart and shall
determine the applicants who are eligible to receive such loans. The authority
shall determine which eligible applicants receive loans by a random selection
process in which each eligible applicant has an equal chance of being selected
for a loan.
(c)
The authority shall be entitled to establish a reasonable fee for the processing
and collecting of loans made under this subpart. Such fee shall be established
by the authority by rule or
regulation."
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.