HOUSE OF REPRESENTATIVES

H.B. NO.

1277

TWENTY-EIGHTH LEGISLATURE, 2015

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to education.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that two-thirds of students graduating from American colleges and universities are graduating with some level of debt.  According to the Consumer Financial Protection Bureau, federal student debt topped $1 trillion in 2013 and private banks have issued another $200 billion in student loans.  Further, the Federal Reserve reported that, aside from mortgages, student loans are now the most widely held debt in the country.

     The legislature further finds that, as increases in tuition continue to outpace gains in family income, more students will find post-secondary education unaffordable.  The skyrocketing tuition drives income inequality by depriving those of less means of the schooling necessary to bridge the income gap.  Moreover, in Hawaii, escalating tuition costs contributes to the underrepresentation of native Hawaiian students in post-secondary enrollment and educational attainment.  Studies show that native Hawaiians stop their educational journey after high school more often than non-native Hawaiians.

     The legislature also finds that a number of states are working to cut costs for higher education.  For example, Oregon has developed the pay forward, pay back program to replace tuition with post-graduate contributions into a state trust fund.  The program would be a deferred tuition payment program, with income-based repayment after students graduate.  Post-graduation contributions would be deposited into a higher education trust fund to be expended for future post-secondary students.

     The purpose of this Act is to require the economic research organization at the University of Hawaii to:

     (1)  Examine the feasibility of establishing a pay forward, pay back pilot program at the University of Hawaii; and

     (2)  Develop a proposed pilot program if feasible.

     SECTION 2.  (a)  The economic research organization at the University of Hawaii shall examine the feasibility of establishing a pay forward, pay back pilot program at the University of Hawaii to replace the current system of charging students tuition and fees for enrollment.

     (b)  If the economic research organization at the University of Hawaii determines that establishing a pay forward, pay back pilot program is feasible, the economic research organization at the University of Hawaii shall develop a proposed pilot program.  The proposed pilot program shall:

     (1)  Identify one or more campuses to participate in the pilot program;

     (2)  Allow students who are residents of this State, as defined by the University of Hawaii, and who qualify for admission to the University to enroll without paying tuition or fees;

     (3)  Provide that, in lieu of paying tuition or fees, students shall sign binding contracts to pay to the State or the university a certain percentage of the student's annual adjusted gross income, upon graduation from any University of Hawaii campus, for a specified number of years; and

     (4)  Specify the number of years and the percentage of annual adjusted gross income for contracts at each participating campus and the bases for the specifications.

     (c)  The end cost to each student participant in the proposed pilot program may vary by campus based upon the:

     (1)  Total cost of education at the campus;

     (2)  Portion of the cost that is paid by the State;

     (3)  Any other financial aid or scholarship moneys obtained and applied by the student participant to offset education costs;

     (4)  Number of years specified in the contract; and

     (5)  Percentage of annual adjusted gross income specified in the contract.

     SECTION 3.  The economic research organization at the University of Hawaii shall submit a report of its findings and recommendations, including any proposed pilot program details and any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2016.

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2015-2016 for the economic research organization at the University of Hawaii to examine the feasibility of establishing a pay forward, pay back pilot program at the University of Hawaii and, if determined to be feasible, develop a proposed pilot program.

     The sum appropriated shall be expended by the University of Hawaii for the purposes of this Act.

     SECTION 5.  This Act shall take effect on July 1, 2015.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

UHERO; Pay Forward, Pay Back; Pilot Program; Appropriation

 

Description:

Requires the UHERO to examine the feasibility of establishing a pay forward, pay back pilot program.  Requires the UHERO to develop a proposed pilot program if feasible.  Makes an appropriation.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.