SB 388: RELATED TO TEACHER LOANS.

A BILL FOR AN ACT

related to Teacher Loans.

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

     SECTION 1.  The legislature finds that providing a high-quality education to Hawaii's students allows future generations to succeed.  However, the high cost of living in the State is a significant concern that contributes to the State's chronic teacher shortage.  Teachers often incur higher expenses to purchase essential and additional classroom supplies, often with personal funds, to support their students.  Additionally, as Hawaii's teachers are among the lowest paid in the United States when considering the cost of living, the department of education experiences persistent difficulties with teacher recruitment and retention.

     The legislature further finds that recruiting teachers to fill vital positions in Hawaii's schools is extremely difficult.  Due to the high cost of living in the State, acquiring housing can be a significant obstacle to accepting a position as a teacher.  Additionally, the payroll lag that new state employees experience exasperates the difficulty in finding teachers to fill these essential positions.  A program that incentivizes teachers to move to areas having hard-to-fill positions will give the students at Hawaii's public schools a better educational experience.

     Accordingly, the purpose of this Act is to provide loans for teachers who relocate to Hawaii, or to an area in Hawaii having hard-to-fill teaching positions, and to forgive these loans if the teacher becomes a licensed teacher in Hawaii or if the teacher commits to teach for seven years at a Hawaii public school or public charter school.

     SECTION 2.  Chapter 302A, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

     "§302A-A  Teacher loans; forgiveness.  (a)  There is established the teacher loan program to be administered by the department, in partnership with a financial institution whose operations are principally conducted in Hawaii, to provide financial support to teachers who become a licensed teacher in Hawaii or to teachers who commit to teach as a full-time teacher for seven years in:

     (1)  The Hawaii public school system in a hard-to-fill position including special education, regular education shortage categories, or Title 1 schools, and in one of the following capacities:

          (A)  As an elementary school teacher teaching in the field of elementary education who has met standards as set forth by the Hawaii teacher standards board; or

          (B)  As a secondary school teacher who has met standards as set forth by the Hawaii teacher standards board; or

     (2)  At a school located in a rural area in the State, as determined by the superintendent.

     (b)  Eligibility shall be determined by the department with priority for teachers who:

     (1)  Relocate to Hawaii to teach; or

     (2)  Accept a position at a school in a different complex area in Hawaii.

     (c)  Amounts to be loaned to each borrower shall be determined by the board and shall not exceed $5,000 per borrower.

     (d)  Liability for repayment of a loan shall be canceled upon the death or permanent total disability of the borrower.

     (e)  Upon a showing of proof that the borrower became a licensed teacher in Hawaii or has committed to teach in the Hawaii public school system pursuant to subsection (a) for seven years, the loan shall be forgiven.

     (f)  If a borrower fails to become a licensed teacher in Hawaii or teach in the Hawaii public school system for seven years, then the borrower shall repay the loan at terms determined by the board; provided that the terms shall be disclosed before the loan is made, the interest rate shall not exceed            per cent, and the repayment terms shall not exceed            years.

     (g)  In accordance with chapter 103D, the department may enter into written contracts with collection agencies for the purpose of collecting delinquent loans.  All payments collected, exclusive of a collection agency's commissions, shall revert, and be credited, to the teacher loan program revolving fund.  A collection agency that enters into a written contract with the department for the collection of delinquent loans pursuant to this section may collect a commission from the debtor in accordance with the terms of, and up to the amounts authorized in, the written contract.

     §302A-B  Teacher loan program revolving fund.  There is established the teacher loan program revolving fund, for the purpose of providing loans pursuant to section 302A-A. Appropriations made by the legislature, private contributions, repayment of loans, including interest and payments received on account of principal, and moneys from other sources shall be deposited into the revolving fund and shall be expended by the department.  An amount from the revolving fund not exceeding five per cent of the total amount of outstanding loans may be used by the department for administrative expenses incurred in administering the revolving fund."

     SECTION 3.  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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the teacher loan program revolving fund.

     SECTION 4.  There is appropriated out of the teacher loan program revolving fund the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the teacher loan program.

     The sums appropriated shall be expended by the department of education for the purposes of this Act.

     SECTION 5.  New statutory material is underscored.

     SECTION 6.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     SECTION 7.  This Act shall take effect on July 1, 2025.

Report Title:

DOE; Teacher Loans; Loan Forgiveness; Teacher Incentives; Teacher Loan Program Revolving Fund; Appropriations

Description:

Establishes a teacher loan program revolving fund to encourage individuals to become teachers in hard-to-fill positions of Department of Education schools.  Allows a loan to be forgiven for teachers who become a licensed teacher in Hawaii or for teachers who will commit to teach for seven years at a Hawaii public school or public charter school.  Appropriates funds.

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