2024 -- S 2591

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LC005112

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO EDUCATION -- STUDENT LOAN REPAYMENT PROGRAM

     Introduced By: Senators DiMario, Miller, Lauria, Cano, Valverde, and Lawson

     Date Introduced: March 01, 2024

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 16 of the General Laws entitled "EDUCATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 114

STUDENT LOAN REPAYMENT PROGRAM

     16-114-1. Short title.

     This chapter shall be known and may be cited as the "Rhode Island Student Loan

Repayment Program."

     16-114-2. Creation.

     (a) There is hereby established at the Rhode Island student loan authority (RISLA) a

restricted receipt account entitled the Rhode Island student loan repayment fund (“the fund”). The

fund shall be used to provide eligible individuals, defined in § 16-114-4, with payment from the

state to the individual’s employer to pay a portion of their student loan debt.

     (b) RISLA shall administer the fund.

     (c) RISLA shall promulgate rules and regulations necessary to implement this chapter,

which shall include, but are not limited to, providing an easy-to-follow guide in a variety of

languages regarding how to complete the request for student loan debt relief.

     (d) The general assembly shall appropriate ten million dollars ($10,000,000) to the fund,

two million dollars ($2,000,000) to be disbursed this year, the remaining eight million dollars

($8,000,000) to be held in a restrictive account, and shall disburse two million dollars ($2,000,000)

for each subsequent year. After that time, the Rhode Island student loan repayment program shall

cease to operate, unless extended or made permanent by further action of the general assembly.

     16-114-3. Definitions.

     For the purposes of this chapter:

     (1) “Debt relief recipients” means individuals receiving student debt relief under this

chapter;

     (2) “Eligible individuals” means persons described in §§ 16-114-4 and 16-114-6;

     (3) “Request for student debt relief” means the process by which individuals submit the

materials and documentation required by RISLA under this chapter;

     (4) “RISLA” means the Rhode Island student loan authority;

     (5) “Service requirements” means specific employment and work obligations set forth in

this chapter that individuals shall meet to obtain student debt relief under this chapter; and

     (6) “Underserved community” means a federally designated health professional shortage

area as identified by the federal Health Resources and Services Administration, an agency of the

United States Department of Health and Human Services.

     16-114-4. Eligibility of individuals.

     (a) Individuals employed by a Rhode Island-based employer may be eligible for the Rhode

Island student loan repayment program if they:

     (1) Have eligible, unpaid student loans;

     (2) Are employed as a licensed clinical social worker or social caseworker or child

protective investigator in any public elementary or secondary school in the state;

     (3) Have committed to work as a licensed clinical social worker or social caseworker or

child protective investigator in any public elementary or secondary school in the state, full-time for

two (2) consecutive years in this state; and

     (4) Have applied and are enrolled in the federal student aid, saving on a valuable education

(SAVE) program.

     (b) Preference for student loan debt relief under this chapter may be given to individuals

who work in an underserved community.

     16-114-5. Service requirements to receive student debt relief.

     (a) Eligible individuals who are approved for student debt relief under this chapter shall

have their required monthly student loan payment paid directly to the debt relief recipient’s

employer for up to two (2) consecutive years or twenty-four (24) consecutive months.

     (b) To receive student debt relief under this chapter, the eligible individual shall:

     (1) Meet the eligibility requirements set forth in §§ 16-114-4 and 16-114-6;

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     (2) Complete and submit a request for student debt relief in a manner and form prescribed

by RISLA;

     (3) Receive financial counseling from RISLA related to managing and repaying their

student debt; and

     (4) Have their request for student debt relief approved by RISLA;

     (c) Except as provided below in this section, a debt relief recipient is no longer eligible to

receive debt relief under this chapter when any of the following occurs:

     (1) The debt relief recipient no longer meets the eligibility requirements set forth in §§ 16-

114-4 and 16-114-6;

     (2) The debt relief recipient receives twenty-four (24) consecutive months of debt relief

under this chapter; and

     (3) The debt relief recipient no longer has an outstanding balance on their eligible student

loans.

     (d) Notwithstanding the provisions of this chapter, debt relief recipients may request a

leave of absence from their employer when the debt relief recipient or a member of their household

experiences a serious illness or other natural cause, becomes pregnant, or is called to military

service, which temporarily prevents the debt relief recipient from continuing to meet the

requirements set forth in §§ 16-114-4 and 16-114-6.

     (1) If approved by the employer, leaves of absence will pause the monthly payments made

on behalf of the debt relief recipient pursuant to this chapter. Payments will resume once the leave

of absence ends and the debt relief recipient returns to work as a licensed clinical social worker in

any public elementary or secondary school in the state, as required by this chapter.

     (2) Except where otherwise provided, leaves of absence may not exceed more than one

calendar year, or the individual may be withdrawn from consideration for student debt relief.

     (3) Leaves of absence due to military service of the debt relief recipient or their spouse

may not exceed three (3) calendar years.

     (4) The debt relief recipient shall present documentation to RISLA showing that a leave of

absence was granted.

     (5) The debt relief recipient shall present documentation to RISLA showing that they have

resumed working as a qualified individual in any public elementary or secondary school in the state

after the leave of absence has concluded.

     (e) A reduction in force shall not preclude a debt relief recipient from fulfilling the

consecutive years of service obligation, if the following provisions are met:

     (1) Debt relief recipients shall provide to RISLA documentation of the reduction in force;

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     (2) Debt relief recipients shall resume working as a qualified individual in any public

elementary or secondary school in the state no later than eighteen (18) months after the reduction

in force;

     (3) If an eligible recipient fails to fulfill their two (2) year commitment as defined in § 16-

114-4(c) all debt repayment will be paused unless a recipient requalifies no later than eighteen (18)

months after the initial separation.

     (f) Upon enactment of this chapter:

     (1) Any individual who has been employed for fewer than three (3) years as a qualified

individual in any public elementary or secondary school in the state may submit a request for

student debt relief under this chapter, provided that they meet the eligibility requirements set forth

in §§ 16-114-4 and 16-114-6.

     (2) Individuals who have been employed for three (3) or more years as a qualified

individual in any public elementary or secondary school in the state shall not be permitted to submit

a request for student debt relief under this chapter.

     16-114-6. Eligibility of loans and lenders.

     (a) RISLA shall retain the right to determine the eligibility of employers and education

loans to which student debt relief payments may be made under this chapter.

     (b) An eligible lender shall make or hold education loans to individuals for purposes of

undergraduate or graduate education and shall not be any private individual.

     (c) An eligible lender may be, but is not limited to, a bank, savings and loan association,

credit union, institution of higher education, secondary market, governmental agency, or private

foundation.

     (d) Credit card, equity loans, and other similar personal loan products are not considered

educational loans eligible for repayment under this chapter.

     (e) An education loan shall:

     (1) Be evidenced by a promissory note for loans to pay for the cost of attendance for the

undergraduate or graduate education of the individual applying for repayment assistance;

     (2) Not have an existing obligation to provide service for loan relief through another

program; and

     (3) If the loan was consolidated with other loans, the individual shall provide

documentation of the portion of the consolidated debt that was originated to pay for the cost of

attendance for individual's undergraduate or graduate education.

     16-114-7. Student loan repayment program limits.

     (a) The total amount of student loan repayment may not exceed a monthly payment of five

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hundred dollars ($500).

     (b) The total amount of student loan repayments may not exceed the outstanding balance.

     16-114-8. Administration of Rhode Island student loan repayment fund.

     (a) RISLA shall administer the fund to the debt relief recipient’s employer.

     (b) Part of administering the fund shall include making provisions to minimize the impact

that any student debt relief provided pursuant to this chapter has on a debt relief recipient’s taxable

income.

     (c) As part of the regulations promulgated, RISLA may design a process for obtaining

informed consent from individuals to work directly with their student loan servicers to collect

certain documentation required by this chapter, such as a loan’s promissory note and current

balance.

     (d) The form of the request for student debt relief and the information required therein shall

be set by RISLA.

     (e) RISLA shall make forms required by this chapter available to the public on its website

in a variety of languages and, if requested, via hardcopy.

     16-114-9. Disbursement.

     (a) All funds distributed in accordance with this chapter shall be:

     (1) Paid directly to the employer on a monthly basis; and

     (2) Allocated only toward the eligible loans issued to pay for the fees, tuition, room, and

board of the debt relief recipient in connection with their attendance at an institution of higher

education.

     (b) Through the financial counseling required under this chapter, RISLA shall discuss

different student loan repayment strategies with debt relief recipients, which shall include, but are

not limited to:

     (1) How the debt relief payments made under this chapter may be allocated to various

student loan servicers, if applicable;

     (2) The implications of different allocation options; and

     (3) The various loan repayment programs that may be available to the debt relief recipient.

     (c) If, in a given fiscal year, there are insufficient funds available for RISLA to make the

student debt relief payments required under this chapter to the debt relief recipient’s employer,

RISLA shall develop and implement an equitable and alternative priority process, which, at

minimum, shall take the following into consideration:

     (1) The number of debt relief installments received to date by the individual’s employer

pursuant to this chapter; and

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     (2) An individual’s income-to-student debt ratio.

     16-114-10. Reporting.

     (a) In its annual report required by § 16-62-18, RISLA shall include an evaluation of the

Rhode Island student loan repayment program. The evaluation shall include, but is not limited to,

the following:

     (1) The number of individuals whose request for student debt relief under this chapter was

approved;

     (2) The actual dollar amount paid for student debt relief under this chapter in the previous

year;

     (3) The employers of the individuals who received student debt relief under this chapter;

and

     (4) Whether the debt relief recipient attended an institution of higher education in Rhode

Island or out-of-state.

     (b) Reporting required under this section shall take extreme care to maintain the privacy of

the individuals requesting and/or receiving student debt relief under this chapter.

     (c) Annual reporting on the fund shall only continue as long as the fund exists.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO EDUCATION -- STUDENT LOAN REPAYMENT PROGRAM

***

     This act would create the Rhode Island Student Loan repayment program which would

allow eligible individuals who have unpaid student loans to receive relief if the individual is

employed as a licensed clinical social worker or social caseworker or child protective investigator

in any public elementary school in this state, has been full-time in this state in such employment

for two (2) years and is enrolled in the Federal Student Aid, Saving on a Valuable Education

program.

     This act would take effect upon passage.

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