Report Title:

Student loan default; collection

Description:

Establishes enforcement mechanisms for recovery of delinquent student loan debts.

THE SENATE

S.B. NO.

2261

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to student loans.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

Delinquent student loans

§ -1 Definitions. For the purpose of this chapter:

"Delinquent individual" means any person with a delinquent student loan obligation.

"Delinquent student loan obligation" means any defaulted education loan note held by the United Student Aid Funds, Inc. or any defaulted financial assistance given by the State to an individual for the purposes of securing education, including but not limited to such programs as the loan forgiveness program for the national board certification of department of education teachers.

"Department" means the department of budget and finance, unless otherwise specified.

§ -2 Recovery of delinquent federal and state student loans. (a) The department of budget and finance shall undertake any legal or administrative action necessary to recover a delinquent student loan obligation.

(b) In order to carry out the responsibilities imposed under this chapter, the department shall:

(1) Establish and operate a state student loan registry of delinquent individuals which contains records which shall be developed from information which may be provided by United Student Aid Funds, Inc. and shall be provided by state agencies, including but not limited to names, residential and mailing addresses, telephone numbers, driver's license numbers, names, addresses, and telephone number of the party's employer, social security numbers, or other uniform identification numbers, dates of birth, and case identification numbers;

(2) Develop guidelines, which are available to the public, to determine whether each case is appropriate for application of this section. The guidelines may include consideration of:

(A) Whether a delinquent student loan obligation shall be paid in whole or in part;

(B) The number of days a delinquent individual may be given to satisfy the delinquent student loan obligation; based upon whether or not the delinquent individual is working in a:

(i) Critical, hard-to-service profession; or

(ii) Census tract with a per capita income that is low- or very-low as defined by federal income level guidelines; and

(C) Whether there shall be a graduated system of penalties, such as:

(i) Loss of a motor vehicle operator's license or permit for six months following the first notification to a delinquent individual of a delinquent student loan obligation;

(ii) Loss of a motor vehicle operator's license or permit for one year following the second notification to a delinquent individual of a delinquent student loan obligation; and

(iii) Loss of a motor vehicle operator's license or permit following the third notification to a delinquent individual of a delinquent student loan obligation until payment of the delinquent student loan obligation in full.

SECTION 2. Section 286-102, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) In addition to other qualifications and conditions by or pursuant to this part, the right of an individual to hold a motor vehicle operator's license or permit issued by the county is subject to the requirements of section 576D-13[.] and section   -2.

Upon receipt of certification from the child support enforcement agency pursuant to section 576D-13 that an obligor or individual who owns or operates a motor vehicle is not in compliance with an order of support as defined in section 576D-1 or has failed to comply with a subpoena or warrant relating to a paternity or child support proceeding, [the] or upon receipt of certification from the department of budget and finance that the licensee or applicant has a delinquent student loan obligation as defined in section -1, the examiner of drivers shall suspend the license and right to operate motor vehicles and confiscate the license of the obligor. The examiner of drivers shall not reinstate an obligor's or individual's license until the child support enforcement agency, the office of child support hearings, [or] the family court, or department of budget and finance issues an authorization that states the obligor or individual is in compliance with an order of support or has complied with a subpoena or warrant relating to a paternity or child support hearing.

The licensing authority may adopt rules pursuant to chapter 91 to implement and enforce the requirements of this section."

SECTION 3. Section 286-241.4, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (b) to read:

"(b) The examiner of drivers shall deny or suspend any commercial driver's license pursuant to the terms of 576D-13 when the examiner of drivers receives certification from the child support enforcement agency that the licensee is not in compliance with an order of support as defined in section 576D-1 or has failed to comply with a subpoena or warrant relating to a paternity or child support proceeding[.], or upon receipt of certification from the department of budget and finance that the licensee or applicant has a delinquent student loan obligation as defined in section -1. Both the licensee and the licensee's employer shall be notified of the suspension."

2. By amending subsection (d) to read:

"(d) Unless otherwise provided by law, the licensing authority shall reinstate, renew, or approve the license only upon receipt of an authorization from the child support enforcement agency, the office of child support hearings, [or] the family court[.], or department of budget and finance."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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