HB 130: Pay As You Earn Education Program Act; enact

Georgia currently offers HOPE scholarships and other financial aid, but no state program ties college loan repayment to a graduate's future earnings. This bill creates the Pay As You Earn (PAYE) Education Program inside the Georgia Student Finance Authority. Participating students pay $1,000 a year toward their cost of attendance, and the college covers the rest through a loan repaid after graduation as a percentage of the student's income. Public colleges and universities in the University System of Georgia must participate, and private accredited institutions may opt in. Students must be Georgia residents, graduates of an eligible high school, and free of disqualifying conditions such as felony drug convictions, loan defaults, or incarceration. After graduation, students pay 3 percent of their federal adjusted gross income for 15 years, or may instead repay the actual loan amount plus 3 percent interest within 10 years. Participating private colleges get a $1,000 state tax credit per enrolled PAYE student, and students can deduct their PAYE loan repayments from their Georgia taxable income. The bill does not state a specific effective date beyond standard enactment.

• Creates the Pay As You Earn (PAYE) Education Program, a state student loan program tied to future income rather than a fixed repayment schedule.
• Requires all public University System of Georgia institutions to participate and allows eligible private colleges to opt in.
• Sets student repayment at 3 percent of adjusted gross income for 15 years after graduation, or an alternative lump repayment of the loan plus 3 percent interest over 10 years.
• Requires participating students to pay $1,000 per year toward their own cost of attendance, with the institution covering the remainder through a PAYE loan.
• Disqualifies students from the program for reasons including felony drug convictions, loan defaults, incarceration, or failure to register for Selective Service.
• Creates a $1,000 per-student state tax credit for private colleges participating in the program and a state income tax deduction for students repaying PAYE loans.

Georgia high school graduates enrolling in public or participating private colleges, University System of Georgia institutions (which must participate), private colleges that choose to join, the Georgia Student Finance Authority, which will administer the program, and the Georgia Department of Revenue, which will process the new tax credit and deduction.

Students who join would pay a fixed $1,000 a year upfront instead of taking out a conventional loan, then repay the rest as a percentage of their income for up to 15 years after graduation. This changes how some Georgians finance college and ties their repayment directly to their future earnings rather than a fixed loan balance.

• Section 1 adds a new Subpart 13 to Title 20, creating Code Sections 20-3-494.1 through 20-3-494.7 establishing the PAYE Education Program.
• Code Section 20-3-494.3 requires all public eligible postsecondary institutions to participate and allows private eligible institutions to opt in, with a 1 percent minimum participation rate for each incoming freshman class.
• Code Section 20-3-494.4 sets the student's required annual payment at $1,000 toward cost of attendance, with the institution covering the remainder as a PAYE loan, and bars students from remedial courses while in the program.
• Code Section 20-3-494.5 sets repayment at 3 percent of adjusted gross income for 15 years post-graduation, or an alternative full repayment plus 3 percent interest within 10 years, and accelerates repayment if a student stops attending for three consecutive semesters or four quarters.
• Code Section 20-3-494.6 creates a $1,000 tax credit per participating student for private institutions and a state tax deduction for students' PAYE loan repayments.
• Code Section 20-3-494.7 lists disqualifying conditions, including noncitizen status without eligible-noncitizen standing, Selective Service noncompliance, loan default, owed refunds, certain felony drug convictions, and incarceration.
• Section 2 amends O.C.G.A. § 48-7-27 to add the new PAYE loan repayment deduction to the list of allowed subtractions from Georgia taxable 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 affordability
• income-based repayment
• state tax deductions
• higher education