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

25 LC 28 0651 House Bill 130 By: Representatives Jasperse of the 11th, Evans of the 57th, Powell of the 33rd, Wilkerson of the 38th, Carpenter of the 4th, and others A BILL TO BE ENTITLED AN ACT To amend Part 3 of Article 7 of Chapter 3 of Title 20 of the Of ficial Code of Georgia1 Annotated, relating to the Georgia Student Finance Authority, so as to provide a short title;2 to provide for the establishment and administration of the Pay As You Earn Education3 Program; to provide for the calculation and repayment of such loans; to provide for eligibility4 and disqualifications; to amend Code Section 48-7-27 of the Off icial Code of Georgia5 Annotated, relating to computation of taxable net income, so as to provide for a deduction;6 to provide for related matters; to repeal conflicting laws; and for other purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Part 3 of Article 7 of Chapter 3 of Title 20 of the Official Co de of Georgia Annotated,10 relating to the Georgia Student Finance Authority, is amended by adding a new subpart to11 read as follows:12 H. B. 130 - 1 - 25 LC 28 0651 "Subpart 1313 20-3-494.1.14 This subpart shall be known and may be cited as the 'Pay As You Earn Education Program15 Act.'16 20-3-494.2.17 As used in this subpart, the term:18 (1) 'Beginning date of a postsecondary course of study' means the first day of19 postsecondary classes attended by a student for credit toward a n associate's degree or20 baccalaureate degree. In the case of a program that includes undergraduate studies and21 is designed for completion within five years, the first day of such classes for credit in22 such a program shall be the beginning date of a postsecondary course of study, whether23 the program leads to a baccalaureate degree or a first professi onal degree. Advanced24 placement classes or classes attended under a program of joint or dual enrollment in a25 high school and a postsecondary ins titution shall not establish the beginning date of a26 postsecondary course of study.27 (2) 'Cost of attendance' of a student means the cost of tuition and all applicable fees.28 (3) 'Eligible high school' has the same meaning as set forth in Code Section 20-3-519.29 (4) 'Eligible postsecondary institution' means:30 (A) An institution of the University System of Georgia that offers associate's degrees,31 baccalaureate degrees, or first professional degree programs; or32 (B) An institution of higher education located in this state t hat offers associate's33 degrees, baccalaureate degrees, or first professional degree programs; that is accredited34 by a regional accrediting agency recognized by the United State s Department of35 Education; that is not a Bible school or college; that admits a s regular students only36 persons who have a high school diploma, a high school equivalency (HSE) diploma, or37 H. B. 130 - 2 - 25 LC 28 0651 a degree from an accredited postsecondary institution; and whose students are eligible38 to participate in the federal Pell Grant program.39 (5) 'First professional degree' means a degree that qualifies a graduate to practice a40 profession and was earned through a first professional degree program.41 (6) 'First professional degree program' means a professional degree program that meets42 the requirements established by the program regulations promulg ated by the Georgia43 Student Finance Commission which, at a minimum, shall include, but not be limited to,44 the following:45 (A) Accepts students after completion of their sophomore or junior year; and46 (B) Results in the award of a first professional degree.47 (7) 'Pay As You Earn Education Program' or 'PAYE Education Pro gram' or 'program'48 means the student loan program established in this subpart.49 (8) 'PAYE loan' means a student loan provided in accordance with the provisions of this50 subpart.51 20-3-494.3.52 (a) The authority is authorized to provide a program of direct loans to students who are53 legal residents of this state and who are not ineligible under Code Section 20-3-494.7 in54 accordance with the provisions of this subpart and regulations of the authority promulgated55 to implement this subpart.56 (b) All public eligible postsecondary institutions shall participate in the Pay As You Earn57 Education Program and any private eligible postsecondary institutions that elect to do so58 may participate in the Pay As You Earn Education Program. Private eligible postsecondary59 institutions shall notify the authority of their desire to part icipate in the program in a60 manner determined by the authority.61 (c) A student who desires to participate in the PAYE Education Program shall apply to the62 authority in a manner determined by the authority and shall demonstrate that such student:63 H. B. 130 - 3 - 25 LC 28 0651 (1) Is a graduate of an eligible high school;64 (2) Has been accepted to a pub lic eligible postsecondary institution or a participating65 private eligible postsecondary institution;66 (3) In the case of a graduate student, has received a baccalau reate degree from an67 accredited college or university; and68 (4) Has not previously participated in the PAYE Education Program at any other eligible69 postsecondary institution.70 (d) Participation in the program shall include at least 1 percent of the incoming freshman71 class each year at the participating eligible postsecondary ins titution. The participating72 eligible postsecondary institution shall determine the number o f students in excess of73 1 percent that shall be allowed to participate in the program.74 (e) A student accepted into the program shall agree in writing to the provisions of the75 program, including the repayment provisions of this subpart.76 20-3-494.4.77 (a) A student who is accepted to participate in the Pay As You Earn Education Program78 shall be required to pay $1,000.00 each year toward the student's cost of attendance. The79 participating eligible postsecondary institution shall provide the remaining funds in the80 form of a payment plan based upon the future earnings of the st udent for a period of 1581 years after the student's graduation. The institution at which the student is enrolled shall82 forward to the authority annually a report for each student enrolled at such institution who83 is participating in the PAYE Education Program which shall cont ain the actual cost of84 attendance for such student and any credits toward such cost of attendance applied by the85 institution, including the student's payment of $1,000.00 as pr ovided in this subsection. 86 Tuition equalization grant funds for the student and HOPE scholarship funds and all other87 scholarship funds received by the student and paid to the parti cipating eligible88 H. B. 130 - 4 - 25 LC 28 0651 postsecondary institution shall be credited to the student's co st of attendance. The89 remaining sum shall be the amount of the PAYE loan to the student for each year.90 (b) A student participating in the PAYE Education Program shal l not be eligible for91 remedial courses at the eligible postsecondary institution. Any required remedial courses92 shall be completed before the student shall be eligible for par ticipating in the PAYE93 Education Program.94 (c) An undergraduate student participating in the program shal l be required to obtain a95 baccalaureate degree within four years of the beginning date of a postsecondary course of96 study or such student's first professional degree within five years of the beginning date of97 a postsecondary course of study.98 20-3-494.5.99 (a) In the case of an undergraduate student, upon receiving a baccalaureate degree or first100 professional degree, and in the case of a graduate student, upo n receiving such graduate101 degree, a student participating in the PAYE Education Program s hall begin paying 3102 percent of his or her federal annual adjusted gross income as s hown by annual federal103 income tax returns to the eligible postsecondary institution from which the student received104 the degree under the PAYE Education Program. The authority shall by rule and regulation105 promulgate procedures for the payment of these funds.106 (b) Such payments shall continue for a period of 15 years foll owing the receipt by the107 student of his or her degree as provided in subsection (a) of this Code section; provided,108 however, that a student may alternatively elect to repay the ac tual total amount of funds109 loaned to the student under the program which shall be the cost of attendance less any other110 scholarships or grants credited to the student's cost of attend ance plus 3 percent simple111 interest on such funds. If the student elects the alternative payment method, such payment112 shall be completed in not more than ten years following, in the case of an undergraduate113 H. B. 130 - 5 - 25 LC 28 0651 student, the receiving of such baccalaureate degree or first professional degree, and in the114 case of a graduate student, the receiving of a graduate degree.115 (c) Prior to receiving a baccalaureate or first professional d egree, if an undergraduate116 student ceases to be a student for three consecutive semesters or four consecutive quarters117 at the eligible postsecondary institution at which the student participated in the PAYE118 Education Program or, prior to receiving the graduate degree sought when enrolling in the119 program, a graduate student ceases to be a student for three consecutive semesters or four120 consecutive quarters at the eligible postsecondary institution at which the student121 participated in the PAYE Education Program, the PAYE loan shall become immediately122 due and repayment shall begin as provided in subsection (b) of this Code section.123 20-3-494.6.124 (a) A private eligible postsecondary institution that particip ates in the PAYE Education125 Program as provided in this subpart shall be allowed a tax cred it of $1,000.00 for each126 student enrolled in the institution who is participating in the PAYE Education Program127 each year. Such tax credit may be applied by the institution t oward the institution's tax128 liabilities for state income taxes, sales taxes, and property taxes for the year in which such129 credit is allowed.130 (b) The funds paid by a student in repaying the PAYE loan under this subpart shall be a131 permitted deduction from such student's federal adjusted gross income as defined in the132 United States Internal Revenue Code of 1986 in computing such student's Georgia taxable133 net income.134 20-3-494.7.135 A student shall not be eligible for any PAYE loan described in this subpart if the student:136 (1) Is not a United States citizen or a permanent resident alien who meets the definition137 of an eligible noncitizen under federal Title IV requirements;138 H. B. 130 - 6 - 25 LC 28 0651 (2) Has not complied with United States Selective Service Syst em requirements for139 registration, if such requirements are applicable to the student;140 (3) Is in default on a federal Title IV educational loan or a State of Georgia educational141 loan, provided that a student who is otherwise eligible and has fully repaid the defaulted142 loan will be eligible to obtain a PAYE loan for future academic terms but not143 retroactively;144 (4) Owes a refund on a federal Title IV student financial aid program or a Georgia145 student financial aid program, provided that a student who is otherwise eligible and has146 fully paid the refund owed shall be eligible to obtain a PAYE loan for future academic147 terms but not retroactively;148 (5) Has been convicted of a felony offense involving marijuana, a controlled substance,149 or a dangerous drug as set out in Code Section 20-1-23 or 20-1- 24, provided that such150 ineligibility extends from the date of conviction to the completion of the next academic151 term;152 (6) Is incarcerated; or153 (7) Does not meet each qualification listed in this subpart and applicable to the student."154 SECTION 2.155 Code Section 48-7-27 of the Official Code of Georgia Annotated, relating to computation156 of taxable net income, is amended in subsection (a) by striking "and" at the end of paragraph157 (14), by replacing the period with "; and" at the end of paragraph (15), and by adding a new158 paragraph to read as follows:159 "(16) The deduction provided for in Code Section 20-3-494.6."160 SECTION 3.161 All laws and parts of laws in conflict with this Act are repealed.162 H. 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