100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3370

 

Introduced , by Rep. Elgie R. Sims, Jr.

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.878 new

    Creates the Affordable College Financing Pilot Program Act. Requires the Illinois Student Assistance Commission to implement and administer a pilot program to provide loans to 400 eligible students to attend State universities. Requires the loans to be repaid beginning 6 months after the borrower leaves school, on a schedule that is based on the income of the borrower. Specifies calculations for the amount of the loan and terms for repayment. Requires the Commission to submit progress reports to the General Assembly. Provides that, in the progress report, the Commission shall track average cumulative debt and year-to-year student retention and track and report the progress of borrowers throughout the repayment period. Amends the State Finance Act. Creates the Affordable College Financing Pilot Program Fund as a special fund in the State treasury. Effective immediately.


LRB100 10966 MLM 21203 b

 

 

A BILL FOR

 

HB3370LRB100 10966 MLM 21203 b

1    AN ACT concerning education.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Affordable College Financing Pilot Program Act.
 
6    Section 5. Findings. The General Assembly finds that many
7students and families struggle to afford the costs of college
8despite the programs available to assist them. Grant assistance
9and federal student loans, while offering critical financial
10support for students, are often insufficient to cover the full
11cost of attendance, particularly at the university level. In
12order to make State universities more accessible to Illinois
13students and to temper the challenges associated with student
14debt, the General Assembly hereby establishes a pilot,
15income-based student loan program to finance costs of
16attendance that are not funded by grants or federal student aid
17and that exceed a family's ability to pay. The loan is intended
18to be repaid on a schedule designed to be affordable for the
19borrower, with payments based on the borrower's income.
 
20    Section 10. Definitions. In this Act:
21    "Borrower" means a person who has been awarded and accepts
22a program loan under this Act.

 

 

HB3370- 2 -LRB100 10966 MLM 21203 b

1    "Cost of attendance" means the cost of attending a State
2university.
3    "Commission" means the Illinois Student Assistance
4Commission.
5    "Eligible student" means a person who is a resident of this
6State and has been accepted to or is enrolled in a State
7university and who has remaining need, as defined in this
8Section.
9    "Expected family contribution" is the federally determined
10share of family income that can be expected to be used for
11college.
12    "Fund" means the Affordable College Financing Pilot
13Program Fund.
14    "Program" means the pilot program established under this
15Act.
16    "Program loan" means a loan awarded by the Commission to an
17eligible student under the program.
18    "Remaining need" is defined as the part of the cost of
19attendance not covered by the expected family contribution,
20grants, or federal Stafford loans.
 
21    Section 15. Pilot program.
22    (a) Subject to the appropriation of funds for this purpose,
23the Commission shall implement and administer a pilot program
24to provide loans to 400 eligible students under this Act. The
25Commission shall conduct a lottery to determine which qualified

 

 

HB3370- 3 -LRB100 10966 MLM 21203 b

1applicants are to be awarded program loans in accordance with
2this Act. The lottery will be based on a stratified random
3sample to ensure equal participation by students in each of the
44 lower-income quintiles that are based on Illinois income data
5reported annually by the U.S. Census Bureau. Once a student has
6gained entry into the program, the loans will be available
7annually, as needed, for 4 years. These program loans are to be
8repaid, beginning 6 months after the borrower leaves school, on
9a schedule that is based on the income of the borrower.
10    (b) The Affordable College Financing Pilot Program Fund is
11created as a special fund in the State treasury. All money in
12the Fund shall be used, subject to appropriation, by the
13Commission for awarding program loans and administering the
14program under this Act. The Fund shall consist of the repayment
15of program loans, interest earned on the moneys in the Fund,
16and other funds appropriated or made available to the Fund.
17    (c) An eligible student must complete the Free Application
18for Federal Student Aid in order to apply for a program loan.
19The Commission may additionally develop and require a separate
20application for a program loan. The program loan application
21shall be in such form as required by the Commission and shall
22include such information as required by the Commission. The
23Commission shall review the application and, if satisfied that
24the applicant is an eligible student and is not ineligible for
25loan assistance under subsections (a) and (b) of Section 35 of
26the Higher Education Student Assistance Act, shall award a

 

 

HB3370- 4 -LRB100 10966 MLM 21203 b

1program loan to the applicant if selected by lottery. Loans may
2be issued only from available funds.
3    (d) The amount of a program loan shall be sufficient to
4cover the student's remaining need, as defined in Section 10.
5    (e) The Commission may not charge interest on a program
6loan, but may charge a default insurance premium as provided in
7subsection (f) of this Section.
8    (f) By accepting a program loan, an eligible student shall
9agree to repay the amount of the program loan, plus a default
10insurance premium amount to be determined by the Commission,
11subject to the following:
12        (1) Repayment shall commence not later than 6 months
13    after the eligible student leaves the State university. The
14    Commission may establish rules for deferment and
15    forbearance consistent with federal guidelines.
16        (2) The monthly amount required to be repaid shall be
17    based on a repayment schedule that the Commission shall by
18    rule develop and shall be based on a percentage of the
19    borrower's adjusted gross income.
20        (3) Monthly payments shall continue until the borrower
21    has fully paid the amount of the program loan and the
22    default insurance premium amount.
23    (g) To administer the program, the Commission may exercise
24the same powers of collection as otherwise authorized by law.
25    (h) The Commission shall forgive the repayment of a program
26loan if the borrower dies or becomes disabled.

 

 

HB3370- 5 -LRB100 10966 MLM 21203 b

1    (i) The Commission may establish and administer, or
2contract with a third party to do so, a default insurance plan
3for program loans in which eligible students have defaulted on
4repayment of their program loans.
 
5    Section 20. Progress reports. The Commission shall submit
6a progress report to the General Assembly 2 years after
7implementation of the program and 4 years after implementation
8of the program. The report shall describe the financial
9stability of the Fund and student success metrics utilized,
10both for initial loan awards and loan continuances within the
11program. The Commission shall track average cumulative debt and
12year-to-year student retention, and compare these numbers to a
13control group of similar students not participating in the
14program. The Commission shall also track and report the
15progress of borrowers throughout the repayment period.
 
16    Section 90. Rules. The Commission may adopt any rules
17necessary to carry out its responsibilities under this Act.
 
18    Section 95. The State Finance Act is amended by adding
19Section 5.878 as follows:
 
20    (30 ILCS 105/5.878 new)
21    Sec. 5.878. The Affordable College Financing Pilot Program
22Fund.
 

 

 

HB3370- 6 -LRB100 10966 MLM 21203 b

1    Section 99. Effective date. This Act takes effect upon
2becoming law.