---
title: HB 130. Pay As You Earn Education Program Act; enact
collection: bills
id: 2025-2026/hb130
cite_as: HB 130, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb130
md_url: https://georgiacommons.org/bills/2025-2026/hb130.md
text_url: https://georgiacommons.org/bills/2025-2026/hb130/text
source_url: https://www.legis.ga.gov/legislation/69504
date: 2025-01-29
status: introduced
corpus_version: bills-2026-09-13
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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omitted: votes and history
omitted_chars: 129
omitted_url: https://georgiacommons.org/bills/2025-2026/hb130.md?full=1
bill_number: HB 130
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2025-01-27
last_action: House Second Readers
sponsors:
- Rick Jasperse
- Stacey Evans
- Alan Powell
- David Wilkerson
- Kasey Carpenter
- Spencer Frye
text_version: Introduced
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB130/2025
upstream_id: 1943315
summaries_model: claude-sonnet-5
topic_tags:
- student loans
- college affordability
- income-based repayment
- state tax deductions
- higher education
---
# HB 130. Pay As You Earn Education Program Act; enact
## Text
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 Official Code of Georgia
Annotated, relating to the Georgia Student Finance Authority, so as to provide a short title;
to provide for the establishment and administration of the Pay As You Earn Education
Program; to provide for the calculation and repayment of such loans; to provide for eligibility
and disqualifications; to amend Code Section 48-7-27 of the Official Code of Georgia
Annotated, relating to computation of taxable net income, so as to provide for a deduction;
to provide for related matters; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Part 3 of Article 7 of Chapter 3 of Title 20 of the Official Code of Georgia Annotated,
relating to the Georgia Student Finance Authority, is amended by adding a new subpart to
read as follows:
"Subpart 13
20-3-494.1.
This subpart shall be known and may be cited as the 'Pay As You Earn Education Program
Act.'
20-3-494.2.
As used in this subpart, the term:
(1) 'Beginning date of a postsecondary course of study' means the first day of
postsecondary classes attended by a student for credit toward an associate's degree or
baccalaureate degree. In the case of a program that includes undergraduate studies and
is designed for completion within five years, the first day of such classes for credit in
such a program shall be the beginning date of a postsecondary course of study, whether
the program leads to a baccalaureate degree or a first professional degree. Advanced
placement classes or classes attended under a program of joint or dual enrollment in a
high school and a postsecondary institution shall not establish the beginning date of a
postsecondary course of study.
(2) 'Cost of attendance' of a student means the cost of tuition and all applicable fees.
(3) 'Eligible high school' has the same meaning as set forth in Code Section 20-3-519.
(4) 'Eligible postsecondary institution' means:
(A) An institution of the University System of Georgia that offers associate's degrees,
baccalaureate degrees, or first professional degree programs; or
(B) An institution of higher education located in this state that offers associate's
degrees, baccalaureate degrees, or first professional degree programs; that is accredited
by a regional accrediting agency recognized by the United States Department of
Education; that is not a Bible school or college; that admits as regular students only
persons who have a high school diploma, a high school equivalency (HSE) diploma, or
a degree from an accredited postsecondary institution; and whose students are eligible
to participate in the federal Pell Grant program.
(5) 'First professional degree' means a degree that qualifies a graduate to practice a
profession and was earned through a first professional degree program.
(6) 'First professional degree program' means a professional degree program that meets
the requirements established by the program regulations promulgated by the Georgia
Student Finance Commission which, at a minimum, shall include, but not be limited to,
the following:
(A) Accepts students after completion of their sophomore or junior year; and
(B) Results in the award of a first professional degree.
(7) 'Pay As You Earn Education Program' or 'PAYE Education Program' or 'program'
means the student loan program established in this subpart.
(8) 'PAYE loan' means a student loan provided in accordance with the provisions of this
subpart.
20-3-494.3.
(a) The authority is authorized to provide a program of direct loans to students who are
legal residents of this state and who are not ineligible under Code Section 20-3-494.7 in
accordance with the provisions of this subpart and regulations of the authority promulgated
to implement this subpart.
(b) All public eligible postsecondary institutions shall participate in the Pay As You Earn
Education Program and any private eligible postsecondary institutions that elect to do so
may participate in the Pay As You Earn Education Program. Private eligible postsecondary
institutions shall notify the authority of their desire to participate in the program in a
manner determined by the authority.
(c) A student who desires to participate in the PAYE Education Program shall apply to the
authority in a manner determined by the authority and shall demonstrate that such student:
(1) Is a graduate of an eligible high school;
(2) Has been accepted to a public eligible postsecondary institution or a participating
private eligible postsecondary institution;
(3) In the case of a graduate student, has received a baccalaureate degree from an
accredited college or university; and
(4) Has not previously participated in the PAYE Education Program at any other eligible
postsecondary institution.
(d) Participation in the program shall include at least 1 percent of the incoming freshman
class each year at the participating eligible postsecondary institution. The participating
eligible postsecondary institution shall determine the number of students in excess of
1 percent that shall be allowed to participate in the program.
(e) A student accepted into the program shall agree in writing to the provisions of the
program, including the repayment provisions of this subpart.
20-3-494.4.
(a) A student who is accepted to participate in the Pay As You Earn Education Program
shall be required to pay $1,000.00 each year toward the student's cost of attendance. The
participating eligible postsecondary institution shall provide the remaining funds in the
form of a payment plan based upon the future earnings of the student for a period of 15
years after the student's graduation. The institution at which the student is enrolled shall
forward to the authority annually a report for each student enrolled at such institution who
is participating in the PAYE Education Program which shall contain the actual cost of
attendance for such student and any credits toward such cost of attendance applied by the
institution, including the student's payment of $1,000.00 as provided in this subsection.
Tuition equalization grant funds for the student and HOPE scholarship funds and all other
scholarship funds received by the student and paid to the participating eligible
postsecondary institution shall be credited to the student's cost of attendance. The
remaining sum shall be the amount of the PAYE loan to the student for each year.
(b) A student participating in the PAYE Education Program shall not be eligible for
remedial courses at the eligible postsecondary institution. Any required remedial courses
shall be completed before the student shall be eligible for participating in the PAYE
Education Program.
(c) An undergraduate student participating in the program shall be required to obtain a
baccalaureate degree within four years of the beginning date of a postsecondary course of
study or such student's first professional degree within five years of the beginning date of
a postsecondary course of study.
20-3-494.5.
(a) In the case of an undergraduate student, upon receiving a baccalaureate degree or first
professional degree, and in the case of a graduate student, upon receiving such graduate
degree, a student participating in the PAYE Education Program shall begin paying 3
percent of his or her federal annual adjusted gross income as shown by annual federal
income tax returns to the eligible postsecondary institution from which the student received
the degree under the PAYE Education Program. The authority shall by rule and regulation
promulgate procedures for the payment of these funds.
(b) Such payments shall continue for a period of 15 years following the receipt by the
student of his or her degree as provided in subsection (a) of this Code section; provided,
however, that a student may alternatively elect to repay the actual total amount of funds
loaned to the student under the program which shall be the cost of attendance less any other
scholarships or grants credited to the student's cost of attendance plus 3 percent simple
interest on such funds. If the student elects the alternative payment method, such payment
shall be completed in not more than ten years following, in the case of an undergraduate
student, the receiving of such baccalaureate degree or first professional degree, and in the
case of a graduate student, the receiving of a graduate degree.
(c) Prior to receiving a baccalaureate or first professional degree, if an undergraduate
student ceases to be a student for three consecutive semesters or four consecutive quarters
at the eligible postsecondary institution at which the student participated in the PAYE
Education Program or, prior to receiving the graduate degree sought when enrolling in the
program, a graduate student ceases to be a student for three consecutive semesters or four
consecutive quarters at the eligible postsecondary institution at which the student
participated in the PAYE Education Program, the PAYE loan shall become immediately
due and repayment shall begin as provided in subsection (b) of this Code section.
20-3-494.6.
(a) A private eligible postsecondary institution that participates in the PAYE Education
Program as provided in this subpart shall be allowed a tax credit of $1,000.00 for each
student enrolled in the institution who is participating in the PAYE Education Program
each year. Such tax credit may be applied by the institution toward the institution's tax
liabilities for state income taxes, sales taxes, and property taxes for the year in which such
credit is allowed.
(b) The funds paid by a student in repaying the PAYE loan under this subpart shall be a
permitted deduction from such student's federal adjusted gross income as defined in the
United States Internal Revenue Code of 1986 in computing such student's Georgia taxable
net income.
20-3-494.7.
A student shall not be eligible for any PAYE loan described in this subpart if the student:
(1) Is not a United States citizen or a permanent resident alien who meets the definition
of an eligible noncitizen under federal Title IV requirements;
(2) Has not complied with United States Selective Service System requirements for
registration, if such requirements are applicable to the student;
(3) Is in default on a federal Title IV educational loan or a State of Georgia educational
loan, provided that a student who is otherwise eligible and has fully repaid the defaulted
loan will be eligible to obtain a PAYE loan for future academic terms but not
retroactively;
(4) Owes a refund on a federal Title IV student financial aid program or a Georgia
student financial aid program, provided that a student who is otherwise eligible and has
fully paid the refund owed shall be eligible to obtain a PAYE loan for future academic
terms but not retroactively;
(5) Has been convicted of a felony offense involving marijuana, a controlled substance,
or a dangerous drug as set out in Code Section 20-1-23 or 20-1-24, provided that such
ineligibility extends from the date of conviction to the completion of the next academic
term;
(6) Is incarcerated; or
(7) Does not meet each qualification listed in this subpart and applicable to the student."
SECTION 2.
Code Section 48-7-27 of the Official Code of Georgia Annotated, relating to computation
of taxable net income, is amended in subsection (a) by striking "and" at the end of paragraph
(14), by replacing the period with "; and" at the end of paragraph (15), and by adding a new
paragraph to read as follows:
"(16) The deduction provided for in Code Section 20-3-494.6."
SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.
## Summaries written by Georgia Commons
The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.
A Georgia House bill would create a new student loan program letting participants pay a set amount toward college costs upfront and repay the rest as a share of income after graduation, with a matching state tax deduction.
### Plain-language summary
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.
### What it does
- 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.
### Who it affects
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.
### Why it matters
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.
### Key provisions
- 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. ยง 48-7-27 to add the new PAYE loan repayment deduction to the list of allowed subtractions from Georgia taxable income.
## Status
- Status: Introduced (2025-01-27)
- Last action: House Second Readers (2025-01-29)
- Sponsors: Rick Jasperse, Stacey Evans, Alan Powell, David Wilkerson, Kasey Carpenter, Spencer Frye
- Official page: https://www.legis.ga.gov/legislation/69504
> The history, votes, and amendments (129 characters) are at https://georgiacommons.org/bills/2025-2026/hb130.md?full=1