08
SB169/AP
Senate
Bill 169
By:
Senators Hamrick of the 30th, Harp of the 29th, Meyer von Bremen of the 12th,
Adelman of the 42nd, Grant of the 25th and others
AS
PASSED
AN
ACT
To
amend Chapter 3 of Title 20 of the Official Code of Georgia Annotated, relating
to postsecondary education, so as to provide for definitions; to provide for
direct loans to students on the basis of need and merit 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 a term of repayment,
repayment schedules, and a higher interest rate in the event of default; to
enact the "Graduate On Time Student Loan Act" and the "Education for Public
Service Student Loan Act"; to provide for direct loans to students for
attendance at certain postsecondary institutions; to provide for separate loan
funds for such student loan programs; to provide for definitions, maximum loan
amounts, eligibility requirements, random selection among eligible applicants,
fees, and rules and regulations; to reduce or eliminate the interest rate for
such loans and recalculate the balance of such loans if recipients meet
specified requirements; to provide for requirements for reduction or
elimination of the interest rate; to provide for contents of the promissory
note; to provide for certain elections by a student who has qualified for a
reduced interest rate for one or more Education for Public Service student loans
and for the terms and conditions of such elections; to provide for a term of
repayment, repayment schedules, and a higher interest rate in the event of
default; to provide for an opportunity on income tax returns for Georgia
taxpayers to contribute to these funds for student loans; to provide for
procedures for transmittal of such donations to the Georgia Student Finance
Authority and for equal division of such contributions among the three funds for
student loans established by this Act; to provide for grants to students
attending North Georgia College and State University who accept a military
commission; to provide for legislative findings; to provide for a definition; to
provide for the amount of the grant; to provide for application for grants,
certification of eligibility, and refunds; to provide for a pro rata reduction
when funds are insufficient; to provide for audits of the college; to provide
for a penalty for false statements; to provide for related matters; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
3 of Title 20 of the Official Code of Georgia Annotated, relating to
postsecondary education, is amended by revising subsection (a) of Code Section
20-3-373, relating to the general loan fund for education loans financed by
state funds, as follows:
"(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
as specified in 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
chapter is further amended by inserting a new subpart in Part 3 of Article 7 to
read as follows:
"Subpart
4A
20-3-395.
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 provided 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;
(B)
A unit of the Department of Adult and Technical Education that offers associate
or baccalaureate degrees; or
(C)
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 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)
'Reasonable interest rate' means an interest rate no higher than the Wall Street
Journal prime rate effective on July 1 for the fiscal year beginning July 1 of
each year. If an outstanding loan made under this subpart is subject to the
reasonable interest rate, the reasonable interest rate for the current fiscal
year shall apply to such a loan during that fiscal year without regard to the
interest rate at the time of the loan´s origination or the interest rate at
the time of the student´s default.
(6)
'Title IV' means Title IV of the federal Higher Education Act of 1965, as
amended, 20 U.S.C.A. Section 1070, et seq.
20-3-395.1.
(a)
The authority is authorized to provide direct loans to students who are legal
residents of this state and who are not ineligible under Code Section 20-3-395.4
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 except as provided by Code Section 20-3-395.3 in the case of
default.
(c)
The repayment period for loans provided in accordance with this subpart shall be
ten years; provided, however, that, subject to the provisions of Code Section
20-3-395.3, the commission may provide by regulation for deferral of payments
and forbearance of payments similar to deferral and forbearance under federal
student loan programs.
(d)
The maximum amount of a loan under this subpart shall be the lesser of:
$10,000.00 per calendar year; or the cost of attendance of a student minus the
expected family assistance and the estimated amount of the student´s loans,
grants, and scholarships, including loans, grants, and scholarships provided
under Title IV. Except as otherwise provided in this subsection, each applicant
for a loan shall be required to apply for other educational assistance,
including scholarships, grants, and state funded or Title IV 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 state funded or Title IV loans.
Applicants are not required to apply for loans under Subpart 4B or Subpart 4C of
this part as a condition of eligibility for loans under this
subpart.
(e)
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 student´s
core curriculum subjects of at least 2.5 on a 4.0 scale. A student´s
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.
(f)
A student´s maximum total eligibility for loans under this subpart shall be
limited to $40,000.00.
20-3-395.2.
(a)
The authority shall establish and maintain a separate 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, donation, 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.
20-3-395.3.
(a)
The authority shall by rule and regulation establish a repayment schedule or
schedules for loans made under this subpart. Students shall be required to pay
accrued interest annually on the loan or loans while attending a postsecondary
institution except in cases of financial hardship. Students shall not be
required to begin the repayment of the principal of such loans until the
earliest occurrence of one of the following:
(1)
The student completes his or her course of study;
(2)
The student graduates from an eligible postsecondary institution;
(3)
One calendar year after the student´s eligibility for a loan under this
subpart ends in accordance with subsection (f) of Code Section 20-3-395.1;
or
(4)
The student has not been enrolled in an eligible postsecondary institution for
two academic quarters or two academic semesters.
(b)
If the student defaults on the repayment of one or more loans under this
subpart, the interest rate for such loan or loans shall be converted to the
reasonable interest rate as defined in Code Section 20-3-395.
20-3-395.4.
A
student is ineligible for any loan described in this subpart if the student:
(1)
Is not a United States citizen or a permanent resident alien who meets the
definition of an eligible noncitizen under federal Title IV
requirements;
(2)
Has not complied with United States Selective Service System requirements for
registration, if such requirements are applicable to the student;
(3)
Is in default on a federal Title IV educational loan or a State of Georgia
educational loan, provided that a student who is otherwise eligible and has
fully repaid the defaulted loan will be eligible to obtain a loan under this
subpart for future academic terms but not retroactively;
(4)
Owes a refund on a federal Title IV student financial aid program or a Georgia
student financial aid program, provided that a student who is otherwise eligible
and has fully paid the refund owed will be eligible to obtain a loan under this
subpart for future academic terms but not retroactively;
(5)
Has been convicted of a felony offense involving marijuana, a controlled
substance, or a dangerous drug as set out in Code Section 20-1-23 or 20-1-24 of
the 'Drug-free Postsecondary Education Act of 1990,' provided that such
ineligibility extends from the date of conviction to the completion of the next
academic term;
(6)
Is incarcerated; or
(7)
Does not meet each qualification listed in this subpart and applicable to the
student."
SECTION
3.
Said
chapter is further amended by adding a new subpart in Part 3 of Article 7 to
read as follows:
"Subpart
4B
20-3-400.
This
subpart shall be known and may be cited as the 'Graduate On Time Student Loan
Act.'
20-3-400.1.
As
used in this subpart, the term:
(1)
'Beginning date of a postsecondary course of study' means the first day of
postsecondary classes attended by a student for credit toward an associate
degree or baccalaureate degree. In the case of a program that includes
undergraduate studies and is designed for completion within five years, the
first day of such classes for credit in such a program is the beginning date of
a postsecondary course of study, whether the program leads to a baccalaureate
degree or a first professional degree. Advanced placement classes or classes
attended under a program of joint or dual enrollment in a high school and a
postsecondary institution do not establish the beginning date of a postsecondary
course of study.
(2)
'Cost of attendance' of a student means the cost of attendance calculated in
accordance with Title IV.
(3)
'Eligible high school' has the same meaning as set forth in Code Section
20-3-519.
(4)
'Eligible postsecondary institution' means:
(A)
A unit of the University System of Georgia that offers associate degrees,
baccalaureate degrees, or first professional degree programs; or
(B)
An institution of higher education located in this state that offers associate
degrees, baccalaureate degrees, or first professional degree programs; 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 diploma, or a degree from an accredited postsecondary
institution; and whose students are eligible to participate in the federal Pell
Grant program.
(5)
'First professional degree' means a degree that qualifies a graduate to practice
a profession and was earned through a first professional degree
program.
(6)
'First professional degree program' means a professional degree program that
meets the requirements established by the program regulations promulgated by the
Georgia Student Finance Commission which, at a minimum, shall include, but not
be limited to, the following:
(A)
Accepts students after the completion of the sophomore or junior year;
and
(B)
Results in the award of a first professional degree.
(7)
'Graduate On Time Student Loan' or 'GOT Student Loan' means a student loan
provided in accordance with the provisions of this subpart.
(8)
'Reasonable interest rate' means an interest rate no higher than the Wall Street
Journal prime rate effective on July 1 for the fiscal year beginning July 1 of
each year. Except for GOT Student Loans that have been reduced to an interest
rate of 1 percent in accordance with subsection (e) of Code Section 20-3-400.2
or an interest rate of 2 percent in accordance with subsection (f) of Code
Section 20-3-400.2, the reasonable interest rate for the fiscal year shall apply
to all outstanding GOT Student Loans during that fiscal year without regard for
the interest rate at the time of a loan´s origination or at the time of the
student´s default.
(9)
'Title IV' means Title IV of the federal Higher Education Act of 1965, 20 U.S.C.
Section 1070, et seq.
20-3-400.2.
(a)
The authority is authorized to provide direct loans to students who are legal
residents of this state and who are not ineligible under Code Section 20-3-400.6
in accordance with the provisions of this subpart and regulations of the
authority promulgated to implement this subpart.
(b)
The repayment period for a GOT Student Loan shall be ten years; provided,
however, that, subject to the provisions of Code Section 20-3-400.5, the
commission may provide by regulation for deferral of payments and forbearance of
payments similar to deferral and forbearance under federal student loan
programs. The maximum amount of a GOT Student Loan shall be the lesser of
$10,000.00 per calendar year or the cost of attendance for a calendar year minus
the estimated amount of the student´s loans, grants, and scholarships,
including loans, grants, and scholarships provided under Title IV, for the
calendar year for which such loan is sought.
(c)
A student may apply for a GOT Student Loan annually. A student who is a legal
resident of this state and who has graduated from an eligible high school shall
be eligible for a GOT Student Loan for the first year of attendance at an
eligible postsecondary institution. Any student who is a legal resident of this
state attending an eligible postsecondary institution is eligible for a GOT
Student Loan for the second and subsequent years of attendance.
(d)
Except as otherwise provided by subsection (e) or (f) of this Code section, the
interest rate for a GOT Student Loan shall be a reasonable interest rate as
defined by paragraph (8) of Code Section 20-3-400.1 and as established by
the authority by rule or regulation.
(e)
The annual interest rate for any GOT Student Loan shall be converted to 1
percent retroactive to the origination date of the GOT Student Loan for each
student who:
(1)
Completes his or her course of study with a cumulative grade point average no
lower than 2.0 on a 4.0 scale and earns a baccalaureate degree within four years
from the beginning date of a course of postsecondary study; or
(2)
Completes his or her course of study with a cumulative grade point average no
lower than 2.0 on a 4.0 scale and earns a baccalaureate or first professional
degree within five years from the beginning date of a course of postsecondary
study if the course of postsecondary study:
(A)
Was designed to be completed in five years; and
(B)
Meets the requirements for a first professional degree program; or
(C)
If the course of postsecondary study includes undergraduate studies, leads to a
baccalaureate or first professional degree.
(f)
The annual interest rate for any GOT Student Loan shall be converted to 2
percent retroactive to the origination date of the GOT Student Loan for each
student who:
(1)
Completes his or her course of study with a cumulative grade point average no
lower than 2.0 on a 4.0 scale and earns a baccalaureate degree within five years
from the beginning date of a course of postsecondary study; or
(2)
Completes his or her course of study with a cumulative grade point average no
lower than 2.0 on a 4.0 scale and earns a baccalaureate or first professional
degree within six years from the beginning date of a course of postsecondary
study if the course of postsecondary study:
(A)
Was designed to be completed in six years; and
(B)
Meets the requirements for a first professional degree program; or
(C)
If the course of postsecondary study includes undergraduate studies, leads to a
baccalaureate or first professional degree.
(g)
A student´s maximum total eligibility for loans under this subpart shall be
limited to $40,000.00.
20-3-400.3.
(a)
When the annual interest rate is converted to 1 percent in accordance with
subsection (e) of Code Section 20-3-400.2, the authority shall recalculate
the balance owed on the loan to reflect the retroactive change in the interest
rate.
(b)
The steps of the recalculation required by subsection (a) of this Code section
shall include the following:
(1)
Calculate the total interest paid by the student on the loan to
date;
(2)
Calculate the total principal paid by the student on the loan to
date;
(3)
Calculate the total of fees other than interest paid by the student on the loan
to date;
(4)
Calculate the current balance owed on the loan by subtracting the principal paid
by the student on the loan to date from the original amount
borrowed;
(5)
Calculate the amount of interest due on the loan from its origination to date at
the rate of 1 percent;
(6)
Subtract the amount of interest due at 1 percent calculated in paragraph (5) of
this subsection from the total interest paid by the student to date calculated
in paragraph (1) of this subsection;
(7)
Add the difference calculated in paragraph (6) of this subsection to the
principal paid by the student to date in paragraph (2) of this subsection; this
sum shall become the new total principal paid by the student on the loan;
and
(8)
Subtract the new principal paid calculated in paragraph (7) of this subsection
from the original amount borrowed by the student in this loan to produce the new
balance owed by the student on the loan.
(c)
When the annual interest rate is converted to 2 percent in accordance with
subsection (f) of Code Section 20-3-400.2, the Student Finance Authority
shall recalculate the balance owed on the loan to reflect the retroactive change
in the interest rate.
(d)
The steps of the recalculation required by subsection (c) of this Code section
shall include the following:
(1)
Calculate the total interest paid by the student on the loan to
date;
(2)
Calculate the total principal paid by the student on the loan to
date;
(3)
Calculate the total of fees other than interest paid by the student on the loan
to date;
(4)
Calculate the current balance owed on the loan by subtracting the principal paid
by the student on the loan to date from the original amount
borrowed;
(5)
Calculate the amount of interest due on the loan from its origination to date at
the rate of 2 percent;
(6)
Subtract the amount of interest due at 2 percent calculated in paragraph (5) of
this subsection from the total interest paid by the student to date calculated
in paragraph (1) of this subsection;
(7)
Add the difference calculated in paragraph (6) of this subsection to the
principal paid by the student to date in paragraph (2) of this subsection; this
sum shall become the new total principal paid by the student on the loan;
and
(8)
Subtract the new principal paid calculated in paragraph (7) of this subsection
from the original amount borrowed by the student in this loan to produce the new
balance owed by the student on the loan.
20-3-400.4.
(a)
The authority shall establish and maintain a separate fund for loans in
accordance with this subpart to which shall be credited:
(1)
State funds appropriated for use for GOT Student Loans;
(2)
Moneys received by gift, donation, or otherwise for GOT Student
Loans;
(3)
Outstanding GOT Student Loans held by the authority; and
(4)
Principal and interest collected on GOT Student Loans held by the
authority.
(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 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 GOT Student Loans. Such fees shall be established by the
authority by rule or regulation.
20-3-400.5.
(a)
The authority shall by rule and regulation establish a repayment schedule or
schedules for GOT Student Loans. Students shall be required to pay accrued
interest annually while attending a postsecondary institution except in cases of
financial hardship. Students shall not be required to begin the repayment of
the principal of such loans until the earliest occurrence of one of the
following:
(1)
The student completes his or her course of study;
(2)
The student graduates from an eligible postsecondary institution;
(3)
One calendar year after the student´s eligibility for a loan under this
subpart ends in accordance with subsection (g) of Code Section 20-3-400.2;
or
(4)
The student has not been enrolled in an eligible postsecondary institution for
two academic quarters or two academic semesters.
(b)
If the student defaults on the repayment of one or more GOT loans, the interest
rate for such loan or loans shall be converted to the reasonable interest rate
as defined in Code Section 20-3-400.1.
20-3-400.6.
A
student is ineligible for any loan described in this subpart if the
student:
(1)
Is not a United States citizen or a permanent resident alien who meets the
definition of an eligible noncitizen under federal Title IV
requirements;
(2)
Has not complied with United States Selective Service System requirements for
registration, if such requirements are applicable to the student;
(3)
Is in default on a federal Title IV educational loan or a State of Georgia
educational loan, provided that a student who is otherwise eligible and has
fully repaid the defaulted loan will be eligible to obtain a loan under this
subpart for future academic terms but not retroactively;
(4)
Owes a refund on a federal Title IV student financial aid program or a Georgia
student financial aid program, provided that a student who is otherwise eligible
and has fully paid the refund owed will be eligible to obtain a loan under this
subpart for future academic terms but not retroactively;
(5)
Has been convicted of a felony offense involving marijuana, a controlled
substance, or a dangerous drug as set out in Code Section 20-1-23 or 20-1-24 of
the 'Drug-free Postsecondary Education Act of 1990,' provided that such
ineligibility extends from the date of conviction to the completion of the next
academic term;
(6)
Is incarcerated; or
(7)
Does not meet each qualification listed in this subpart and applicable to the
student."
SECTION
4.
Said
chapter is further amended by adding a new subpart in Part 3 of Article 7 to
read as follows:
"Subpart
4C
20-3-405.
This
subpart shall be known and may be cited as the 'Education for Public Service
Student Loan Act.'
20-3-405.1.
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)
'Education for Public Service Student Loan' or 'EPS Student Loan' means a
student loan provided in accordance with the provisions of this
subpart.
(3)
'Eligible high school' has the same meaning as set forth in Code Section
20-3-519.
(4)
'Eligible postsecondary institution' means:
(A)
A unit of the University System of Georgia that offers associate degrees,
baccalaureate degrees, or graduate degrees; or
(B)
An institution of higher education located in this state that offers associate
degrees, baccalaureate degrees, or graduate 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 diploma, or a degree from an accredited postsecondary institution;
and whose students are eligible to participate in the federal Pell Grant
program.
(5)
'Employee' means an individual who receives an Internal Revenue Service Form W-2
from the employer and who is an employee as defined in Code Section 34-9-1 for
purposes of workers´ compensation.
(6)
'First degree' means the first baccalaureate degree or the first graduate degree
completed by a student with the assistance of an EPS Student Loan.
(7)
'Graduate degree' means a degree earned after a student has earned a
baccalaureate degree, including, but not limited to, a master´s degree, a
juris doctor degree, or a medical doctor degree.
(8)
'Public service' means service as an employee of any of the following: the State
of Georgia; an agency or instrumentality of this state; the executive,
legislative, or judicial branch of government of this state; a political
subdivision of this state; the University System of Georgia or any unit of the
university system; an authority or public corporation of this state; a local
board of education of this state; or an agency or instrumentality of a political
subdivision of this state.
(9)
'Reasonable interest rate' means an interest rate no higher than the Wall Street
Journal prime rate effective on July 1 for the fiscal year beginning July 1 of
each year. The reasonable interest rate for the fiscal year shall apply to all
outstanding EPS Student Loans during that fiscal year without regard for the
interest rate at the time of a loan´s origination or at the time of the
student´s default, except for EPS Student Loans that:
(A)
Have been converted to 1 percent interest loans in accordance with subsection
(a) of Code Section 20-3-405.3; and
(B)
Have been converted to interest-free loans in accordance with subsection (b) of
Code Section 20-3-405.3.
(10)
'Second degree' means the second degree completed by a student with the
assistance of an EPS Student Loan.
(11)
'Title IV' means Title IV of the federal Higher Education Act of 1965, 20 U.S.C.
Section 1070, et seq.
(12)
'Undergraduate degree' means a baccalaureate degree.
20-3-405.2.
(a)
The authority is authorized to provide direct loans to students who are legal
residents of this state and who are not ineligible under Code Section 20-3-405.7
in accordance with
the provisions of this subpart and regulations of the authority promulgated to
implement this subpart.
(b)
The repayment period for an EPS Student Loan shall be ten years; provided,
however, that, subject to the provisions of Code Section 20-3-405.6, the
commission may provide by regulation for deferral of payments and forbearance of
payments similar to deferral and forbearance under federal student loan
programs. The maximum amount of an EPS Student Loan shall be the lesser of
$10,000.00 or the cost of attendance for a calendar year minus the estimated
amount of the student´s loans, grants, and scholarships, including loans,
grants, and scholarships provided under Title IV, for the calendar year for
which such loan is sought. The maximum amount of EPS Student Loans for a degree
shall be $10,000.00 times the number of academic years required for a full-time
student to earn the degree.
(c)
A student may apply for an EPS Student Loan annually. A student who is a legal
resident of this state and who has graduated from an eligible high school shall
be eligible for an EPS Student Loan for the first year of attendance at an
eligible postsecondary institution. Any student who is a legal resident of this
state attending an eligible postsecondary institution is eligible for an EPS
Student Loan for the second and subsequent years of attendance. A student who
is otherwise eligible for an EPS Student Loan is eligible for such a loan for
expenses as a student seeking an associate degree, baccalaureate degree, and a
graduate degree.
(d)
Except as otherwise provided by subsections (a) and (b) of Code Section
20-3-405.3, the interest rate for an EPS Student Loan shall be a reasonable
interest rate as defined by paragraph (9) of Code Section 20-3-405.1 and as
established by the authority by rule or regulation.
(e)
The promissory note signed for each EPS Student Loan shall include a statement
of the requirements a student must meet for conversion of the loan to a 1
percent loan and for conversion of the loan to an interest-free
loan.
20-3-405.3.
(a)
Subject to the provisions of Code Section 20-3-405.4, the annual interest rate
for any EPS Student Loan shall be converted to 1 percent retroactive to the
origination date of the EPS Student Loan for each student who:
(1)
Completes his or her course of study and earns the degree with a cumulative
grade point average no lower than 2.0 on a 4.0 scale; and
(2)
Completes the number of years of public service required by this
paragraph:
(A)
If a student has earned one degree with the assistance of one or more EPS
Student Loans, the annual interest rate for each such EPS Student Loan shall be
converted to 1 percent after the completion of five years of public
service; or
(B)
In the case of a student who has earned two degrees with the assistance of two
or more EPS Student Loans, the interest rate for any EPS Student Loan used for
the first degree shall be converted to 1 percent after the student has completed
five years of public service. The interest rate for any EPS Student Loan used
for the second degree may be converted to 1 percent after the student has
completed ten years of public service, or the student may elect to apply the
sixth through tenth years of public service to convert the EPS Student Loans
used for the first degree to interest-free loans under subsection (b) of this
Code section.
In
the case of a student whose public service preceded the student´s earning
of the degree, the conversion of the EPS loans to 1 percent shall be on the date
the student earns the degree.
(b)
Subject to the provisions of Code Section 20-3-405.4, an EPS Student Loan for
the first degree may be converted to an interest-free loan retroactive to the
origination date of the EPS Student Loan for each student who:
(1)
Completes his or her course of study and earns the degree with a cumulative
grade point average no lower than 2.0 on a 4.0 scale; and
(2)
Completes the number of years of public service required by this paragraph, and
for conversion of one or more EPS Student Loans, completes five years of public
service in addition to:
(A)
The service required by subparagraph (A) of paragraph (2) of subsection (a) of
this Code section, for a total of ten years of public service, if the student
earned one degree with the assistance of EPS Student Loans, or the student may
elect to apply the fifth through tenth years of public service to conversion of
EPS loans for a second degree to 1 percent loans; or
(B)
The service required by subparagraph (B) of paragraph (2) of subsection (a) of
this Code section, for a total of 15 years of public service, to convert the
loan or loans for the second degree if the student earned two degrees with the
assistance of EPS Student Loans.
In
the case of a student whose public service preceded the student´s earning
of the degree, the conversion of the EPS loans to interest-free loans shall be
on the date the student earns the degree.
(c)
When the annual interest rate is converted to 1 percent in accordance with
subsection (a) of this Code section, the authority shall recalculate the
balance owed on the loan to reflect the retroactive change in the interest
rate.
(d)
The steps of the recalculation required by subsections (a) and (c) of this Code
section shall include the following:
(1)
Calculate the total interest paid by the student on the loan to
date;
(2)
Calculate the total principal paid by the student on the loan to
date;
(3)
Calculate the total of fees other than interest paid by the student on the loan
to date;
(4)
Calculate the current balance owed on the loan by subtracting the principal paid
by the student on the loan to date from the original amount
borrowed;
(5)
Calculate the amount of interest due on the loan from its origination to date at
the rate of 1 percent;
(6)
Subtract the amount of interest due at 1 percent calculated in paragraph (5) of
this subsection from the total interest paid by the student to date calculated
in paragraph (1) of this subsection;
(7)
Add the difference calculated in paragraph (6) of this subsection to the
principal paid by the student to date in paragraph (2) of this subsection; this
sum shall become the new total principal paid by the student on the loan;
and
(8)
Subtract the new principal paid calculated in paragraph (7) of this subsection
from the original amount borrowed by the student in this loan to produce the new
balance owed by the student on the loan. If the new principal paid calculated
in paragraph (7) of this subsection equals or exceeds the original amount
borrowed by the student in this loan, the new balance is zero.
(e)
When an EPS Student Loan is converted to an interest-free loan in accordance
with subsection (b) of this Code section, the authority shall recalculate the
balance owed on the loan to reflect the retroactive change in the interest rate.
This recalculation shall be based upon the loan as it exists when it is
converted to an interest-free loan.
(f)
The steps of the recalculation required by subsections (b) and (e) of this Code
section shall include the following:
(1)
Calculate the total interest paid by the student on the loan to
date;
(2)
Calculate the total principal paid by the student on the loan to
date;
(3)
Calculate the total of fees other than interest paid by the student on the loan
to date;
(4)
Calculate the current balance owed on the loan by subtracting the principal paid
by the student on the loan to date from the original amount
borrowed;
(5)
Add the amount of interest calculated in paragraph (1) of this subsection to the
principal paid by the student to date in paragraph (2) of this subsection; this
sum shall become the new total principal paid by the student on the loan;
and
(6)
Subtract the new principal paid calculated in paragraph (5) of this subsection
from the original amount borrowed by the student in this loan to produce the new
balance owed by the student on the loan. If the new principal paid calculated
in paragraph (5) of this subsection equals or exceeds the original amount
borrowed by the student in this loan, the new balance is zero.
20-3-405.4.
When
a student meets the requirements for conversion of one or more EPS loans to a
1 percent rate or to an interest-free loan or loans, the student may elect
to waive the conversion of the EPS loan or loans for that degree and apply all
or part of the student´s years of completed public service to one or more
EPS loans for a subsequent degree, without regard to whether such EPS loan or
loans for a subsequent degree exist at the time of the student´s election.
In any event, each year of completed public service may be applied only to a
single degree and the student is not authorized to change an election after
notifying the authority in writing of his or her election.
20-3-405.5.
(a)
The authority shall establish and maintain a separate fund for loans in
accordance with this subpart to which shall be credited:
(1)
State funds appropriated for use for EPS Student Loans;
(2)
Moneys received by gift, donation, or otherwise for EPS Student
Loans;
(3)
Outstanding EPS Student Loans held by the authority; and
(4)
Principal and interest collected on EPS Student Loans held by the
authority.
(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 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 EPS Student Loans. Such fees shall be established by the
authority by rule or regulation.
20-3-405.6.
(a)
The authority shall by rule and regulation establish a repayment schedule or
schedules for EPS Student Loans. Students shall be required to pay accrued
interest annually on the loan or loans while attending a postsecondary
institution except in cases of financial hardship. Students shall not be
required to begin the repayment of the principal of such loans until the
earliest occurrence of one of the following:
(1)
The student completes his or her course of study;
(2)
The student graduates from an eligible postsecondary institution;
(3)
A calendar year has passed since the student borrowed the maximum amount of EPS
loans for the degree the student is seeking under subsection (b) of Code
Section 20-3-405.2; or
(4)
The student has not been enrolled in an eligible postsecondary institution for
two academic quarters or two academic semesters.
(b)
If the student defaults on the repayment of one or more EPS loans, the interest
rate for such loan or loans shall be converted to the reasonable interest rate
as defined in Code Section 20-3-405.1.
20-3-405.7.
A
student is ineligible for any loan described in this subpart if the
student:
(1)
Is not a United States citizen or a permanent resident alien who meets the
definition of an eligible noncitizen under federal Title IV
requirements;
(2)
Has not complied with United States Selective Service System requirements for
registration, if such requirements are applicable to the student;
(3)
Is in default on a federal Title IV educational loan or a State of Georgia
educational loan, provided that a student who is otherwise eligible and has
fully repaid the defaulted loan will be eligible to obtain a loan under this
subpart for future academic terms but not retroactively;
(4)
Owes a refund on a federal Title IV student financial aid program or a Georgia
student financial aid program, provided that a student who is otherwise eligible
and has fully paid the refund owed will be eligible to obtain a loan under this
subpart for future academic terms but not retroactively;
(5)
Has been convicted of a felony offense involving marijuana, a controlled
substance, or a dangerous drug as set out in Code Section 20-1-23 or 20-1-24 of
the 'Drug-free Postsecondary Education Act of 1990,' provided that such
ineligibility extends from the date of conviction to the completion of the next
academic term;
(6)
Is incarcerated; or
(7)
Does not meet each qualification listed in this subpart and applicable to the
student."
SECTION
5.
Said
chapter is further amended by adding a new subpart in Part 3 of Article 7 to
read as follows:
"Subpart
4D
20-3-409.
(a)
Each Georgia income tax return form for taxable years beginning on or after
January 1, 2008, shall contain appropriate language, to be determined by
the state revenue commissioner, offering the taxpayer the opportunity to
contribute to the funds established for student loans by Code Sections
20-3-395.2, 20-3-400.4, and 20-3-405.5 by either donating all or any part of any
tax refund due and by authorizing a reduction in the refund check otherwise
payable, or by contributing any amount over and above any amount of tax owed by
adding that amount to the taxpayer´s payment. The instructions
accompanying the income tax return shall include a description of the purposes
for which these funds were established and the intended use of moneys received
from the contributions, and shall explain that any donation will be evenly
divided between the three funds. Each taxpayer required to file a state income
tax return who desires to contribute to these funds may designate such
contribution as provided on the appropriate income tax return form.
(b)
The Department of Revenue shall determine annually the total amount so
contributed, and shall transmit such amount to the authority for even division
among and deposit in the funds established by Code Sections 20-3-395.2,
20-3-400.4, and 20-3-405.5."
SECTION
6.
Said
chapter is further amended by adding a new subpart in Part 3 of Article 7 to
read as follows:
"Subpart
6A
20-3-440.
The
General Assembly finds that it is essential for the national defense that
persons be encouraged to consider military leadership positions as an honorable
and rewarding profession and that North Georgia College and State University,
Georgia´s only state supported military college, plays a significant role
in preparing and training students for professional life in the military as a
profession. It is the purpose of the General Assembly, as provided for in this
subpart, to encourage students to enroll in North Georgia College and State
University and its military training program and to encourage such students to
accept military commissions by providing for tuition grant assistance to such
students.
20-3-441.
For
purposes of this subpart, the term 'eligible student' shall mean a person
who:
(1)
Is enrolled in or accepted for enrollment in North Georgia College and State
University for a minimum of 12 academic hours;
(2)
Is or will be a citizen of this state for a period of at least 12 months
immediately prior to the date of registration therein;
(3)
Is enrolled in or plans to enroll in the Army Reserve Officers´ Training
Corps program at North Georgia College and State University; and
(4)
Has signed a contract to accept a commission, to be effective upon graduation,
no later than the end of the student´s junior year as an officer in any
branch of the armed services of the United States or the Army National
Guard.
20-3-442.
There
is granted to each eligible student attending North Georgia College and State
University the sum of $1,500.00 per academic semester.
20-3-443.
Each
eligible student wishing to receive the grant provided for in this subpart shall
submit to North Georgia College and State University an application for the
grant payment at the time and in accordance with procedures prescribed by the
authority. The authority is authorized to define such terms and prescribe such
rules, regulations, and procedures as may be reasonable and necessary to carry
out the purposes of this subpart. The authority shall not approve payment of
any grant until it has received from an appropriate officer of North Georgia
College and State University a certification that the student applying for the
grant is an eligible student. Upon timely receipt of such certification, in
proper form, the authority is authorized to pay the grant to North Georgia
College and State University on behalf of and to the credit of the student. In
the event a student on whose behalf a grant is paid shall not enroll as a
full-time student for the school term for which the grant is paid, North Georgia
College and State University shall make a refund to the authority in accordance
with regulations of the authority.
20-3-444.
In
the event funds available to the authority are not sufficient to enable the
authority to pay on behalf of eligible students the full grant prescribed by the
General Assembly, grants payable for the remaining school terms shall be reduced
by the authority on a pro rata basis.
20-3-445.
North
Georgia College and State University shall be subject to examination by the
state auditor for the sole purpose of determining whether the school has
properly certified eligibility and enrollment of students and credited grants
paid on behalf of such students. However, nothing in this subpart shall be
construed to interfere with the authority of the school to determine
admissibility of students or to control its own curriculum, philosophy, purpose,
or administration. In the event it is determined that the school knowingly or
through error certified an ineligible student to be eligible for a grant under
this subpart, the amount of the grant paid to the school pursuant to such
certification shall be refunded by the school to the authority.
20-3-446.
Any
person who knowingly makes or furnishes any false statement or misrepresentation
or who accepts such statement or misrepresentation knowing it to be false for
the purpose of enabling an ineligible student to obtain wrongfully a grant under
this subpart shall be guilty of a misdemeanor."
SECTION
7.
All
laws and parts of laws in conflict with this Act are repealed.