HB130: HB130 Pay As You Earn Education Program Act; enact

Georgia currently offers financial aid like the HOPE scholarship and other student loan options, but nothing tied directly to a student's future income. House Bill 130 would create the Pay As You Earn (PAYE) Education Program, run by the Georgia Student Finance Authority. Participating students would pay $1,000 a year toward tuition, and their college would cover the rest through a PAYE loan. After graduating, students would repay 3 percent of their federal adjusted gross income each year for 15 years, or they could instead choose to pay back the actual cost of attendance (minus scholarships) plus 3 percent simple interest over up to 10 years. All public colleges must participate, and each school must let in at least 1 percent of its incoming freshman class. Private colleges offering the program would get a $1,000 per student tax credit, and students repaying PAYE loans could deduct those payments from their Georgia taxable income. Certain students, such as those in default on other student loans or incarcerated, would not qualify.

• Creates the Pay As You Earn (PAYE) Education Program, a state-run student loan option based on a share of future income rather than a fixed loan amount.
• Requires participating students to pay $1,000 per year toward college costs, with the eligible institution covering the remaining cost of attendance as a PAYE loan.
• Sets repayment at 3 percent of a graduate's federal adjusted gross income annually for 15 years, or an optional lump-sum alternative paid over up to 10 years with 3 percent interest.
• Requires all public colleges in the University System of Georgia to participate and lets private accredited colleges opt in, with each school reserving at least 1 percent of incoming freshmen slots for the program.
• Gives private colleges a $1,000 state tax credit per enrolled PAYE student and lets students deduct their PAYE loan repayments from their Georgia taxable income (amending O.C.G.A. § 48-7-27).
• Bars certain students from the program, including those in default on other student loans, incarcerated individuals, and those convicted of certain drug felonies for a limited period.

Georgia high school graduates and current undergraduate or graduate students seeking college financial aid, public University System of Georgia institutions and eligible private colleges that choose to participate, and the Georgia Student Finance Authority, which would administer and enforce the new program.

Students who join the program would pay a flat $1,000 a year for tuition upfront but owe a share of their future income for 15 years after graduating, a different financial tradeoff than a traditional fixed-amount student loan. Participating colleges and students would also see new tax credits and deductions tied to the program.

• Subpart 13 (Code Sections 20-3-494.1 through 20-3-494.7) creates the PAYE Education Program within the Georgia Student Finance Authority.
• Section 20-3-494.3 requires all public eligible postsecondary institutions to participate and allows private ones to opt in, with at least 1 percent of each incoming freshman class included.
• Section 20-3-494.4 sets the student's required annual payment at $1,000.00, with the institution covering the remaining cost of attendance as a PAYE loan; students in the program are ineligible for remedial courses.
• Section 20-3-494.5 sets repayment at 3 percent of annual adjusted gross income for 15 years after graduation, or an alternative lump-sum repayment with 3 percent simple interest over up to 10 years.
• Section 20-3-494.5(c) makes the loan immediately due if a student stops attending for three consecutive semesters or four consecutive quarters before completing their degree.
• Section 20-3-494.6 gives participating private institutions a $1,000 tax credit per enrolled PAYE student and lets students deduct PAYE loan repayments from Georgia taxable income.
• Section 20-3-494.7 lists disqualifying conditions, including loan default, owed financial aid refunds, certain drug felony convictions, and incarceration.
• Section 2 amends O.C.G.A. § 48-7-27 to add the PAYE loan repayment deduction to the list of allowed deductions from Georgia taxable net income.

1. 2025-01-29House Second Readers (House)
2. 2025-01-28House First Readers (House)
3. 2025-01-27House Hopper (House)

• Rick Jasperse (R, HD-011)Primary sponsor
• Stacey Evans (D, HD-057)
• Alan Powell (R, HD-033)
• David Wilkerson (D, HD-038)
• Kasey Carpenter (R, HD-004)
• Spencer Frye (D, HD-122)

• student loans
• college financial aid
• higher education funding
• tax credits
• Georgia Student Finance Authority