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ENGROSSED
HOUSE BILL 1748
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AS RECOMMENDED BY
THE CONFERENCE COMMITTEE
Passed
Legislature - 1993 Regular Session
State of Washington 53rd
Legislature 1993 Regular Session
By
Read
first time 02/08/93. Referred to Committee on Higher Education.
Changing financial aid provisions.
AN ACT Relating to financial aid; and amending
RCW 28B.15.820, 28B.101.040, and 28B.12.040.
BE
IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1.
RCW 28B.15.820 and 1985 c 390 s 35 are each amended to read as follows:
(1) Each institution of higher education,
except technical colleges, shall deposit two and one-half percent of
revenues collected from tuition and services and activities fees in an
institutional ((long-term loan)) financial aid fund ((which))
that is hereby created and which shall be held locally. Moneys in ((such))
the fund shall be used only for the following purposes: (a) To
make guaranteed long-term loans to eligible students ((except as
provided for)) as provided in subsections (3) through (8) of this
section; (b) to make short-term loans as provided in subsection (9) of this
section; or (c) to provide financial aid to needy students as provided in
subsection (10) of this section.
(2) An "eligible student" for the
purposes of subsections (3) through (8) and (10) of this section is a
student registered for at least six credit hours or the equivalent, who is
eligible for resident tuition and fee rates as defined in RCW 28B.15.012
through ((28B.15.015)) 28B.15.013, and who is a "needy
student" as defined in RCW 28B.10.802.
(3) The amount of the guaranteed long-term
loans made under ((subsection (1) of)) this section shall not exceed the
demonstrated financial need of the student. Each institution shall establish
loan terms and conditions which shall be consistent with the terms of the
guaranteed loan program established by 20 U.S. Code Section 1071 et seq., as
now or hereafter amended. All loans made shall be guaranteed by the Washington
student loan guaranty association or its successor agency. Institutions are
hereby granted full authority to operate as an eligible lender under the
guaranteed loan program.
(4) Before approving a guaranteed long-term
loan, each institution shall analyze the ability of the student to repay the
loan based on factors which include, but are not limited to, the student's
accumulated total education loan burdens and the employment opportunities and
average starting salary characteristics of the student's chosen fields of study.
The institution shall counsel the student on the advisability of acquiring
additional debt, and on the availability of other forms of financial aid.
(5) Each institution is responsible for
collection of guaranteed long-term 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.
Institutions shall cooperate with other lenders and the Washington student loan
guaranty association, or its successor agency, in the coordinated collection of
guaranteed loans, and shall assure that the guarantability of the loans is not
violated. Collection and servicing of guaranteed long-term loans under
((subsection (1) of)) this section shall be performed by entities
approved for such servicing by the Washington student loan guaranty association
or its successor agency: PROVIDED, That institutions be permitted to perform
such servicing if specifically recognized to do so by the Washington student loan
guaranty association or its successor agency. Collection and servicing of guaranteed
long-term loans made by community colleges under subsection (1) of this
section shall be coordinated by the state board for community and technical
colleges ((education)) and shall be conducted under procedures
adopted by ((such)) the state board.
(6) Receipts from payment of interest or
principal or any other subsidies to which institutions as lenders are entitled,
((which)) that are paid by or on behalf of borrowers of funds
under subsections (((1))) (3) through (8) of this section,
shall be deposited in each institution's ((general local)) financial
aid fund and shall be used to cover the costs of making the guaranteed
long-term loans under ((subsection (1) of)) this section and
maintaining necessary records and making collections under subsection (5) of
this section: PROVIDED, That such costs shall not exceed five percent of
aggregate outstanding loan ((principle)) principal. Institutions
shall maintain accurate records of such costs, and all receipts beyond those
necessary to pay such costs, shall be ((used for the support of the
institution's operating budget)) deposited in the institution's
financial aid fund.
(7) The governing boards ((of regents))
of the state universities, ((the boards of trustees of)) the regional
universities, and The Evergreen State College, and the state board for
community and technical colleges ((education)), on behalf
of the community colleges, shall each adopt necessary rules and regulations to
implement this section.
(8) ((Lending activities)) First
priority for any guaranteed long-term loans made under this section shall
be directed toward students who would not normally have access to educational
loans from private financial institutions in Washington state, and maximum use
shall be made of secondary markets in the support of loan consolidation.
(9) Short-term ((interim)) loans, not to
exceed one ((hundred twenty days)) year, may be made from the
institutional ((long-term loan)) financial aid fund to students
((eligible for guaranteed student loans and whose receipt of such loans is
pending. Such short-term loans shall not be subject to the guarantee restrictions
or the constraints of federal law imposed by subsection (3) of this section))
enrolled in the institution. No such loan shall be made to any student
who is known by the institution to be in default or delinquent in the payment
of any outstanding student loan. A short-term loan may be made only if the
institution has ample evidence that the student has the capability of repaying
the loan within the time frame specified by the institution for repayment.
(10) Any moneys deposited in the institutional
((long-term loan)) financial aid fund ((which)) that
are not used in making ((long)) long-term or short-term
loans ((or transferred to institutional operating budgets)) may be used
by the institution for locally-administered financial aid programs for needy
students, such as need-based institutional employment programs or need-based
tuition and fee ((waiver)) scholarship or grant programs. These
funds shall be used in addition to and not to replace institutional funds ((which))
that would otherwise support these locally-administered financial aid
programs. Priority in the use of these funds shall be given to needy students
who have accumulated excessive educational loan burdens. An excessive
educational loan burden is a burden that will be difficult to repay given
employment opportunities and average starting salaries in the student's chosen
fields of study.
Sec. 2.
RCW 28B.101.040 and 1990 c 288 s 6 are each amended to read as follows:
Grants may be used by eligible participants to
attend any public or private college or university in the state of Washington that
is accredited by an accrediting association recognized by rule of the higher
education coordinating board and that has an existing unused capacity.
Grants shall not be used to attend any branch campus or educational program
established under chapter 28B.45 RCW. The participant shall not be eligible
for a grant if it will be used for any programs that include religious worship,
exercise, or instruction or to pursue a degree in theology. Each participating
student may receive up to two thousand five hundred dollars per academic year,
not to exceed the student's demonstrated financial need for the course of
study.
Sec. 3.
RCW 28B.12.040 and 1985 c 370 s 58 are each amended to read as follows:
The higher education coordinating board shall
develop and administer the college work-study program and shall be authorized
to enter into agreements with employers and eligible institutions for the
operation of the program. These agreements shall include such provisions as
the higher education coordinating board may deem necessary or appropriate to
carry out the purposes of this chapter.
With the exception of off-campus community service
placements, the share from ((funds)) moneys disbursed under
the college work-study program of the compensation of students employed under
such program in accordance with such agreements shall not exceed eighty percent
of the total such compensation paid such students.
By rule, the board shall define community
service placements and may determine any salary matching requirements for any
community service employers.
