SECTION 1. Title 16 of the General Laws entitled "EDUCATION" is hereby amended by adding thereto the following chapter: 16-117-1. Short title. This chapter shall be known and may be cited as the "Rhode Island Student Loan Repayment Program." 16-117-2. 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 § 16-117-4, 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. 16-117-3. 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 §§ 16-117-4 and 16-117-6;
(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. 16-117-4. 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, 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. 16-117-5. 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 §§ 16-117-4 and 16-117-6;
(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 subsection (d) of 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- 117-4 and 16-117-6;
(2) The debt relief recipient has received twenty-four (24) consecutive months of debt relief under this chapter; or
(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 §§ 16-117-4 and 16-117-6.
(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 shall not exceed more than one calendar year, or the individual shall be withdrawn from consideration for student debt relief.
(3) Leaves of absence, due to military service of the debt relief recipient or their spouse, shall 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;
(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; and
(3) If an eligible recipient fails to fulfill their two (2) year commitment as defined in § 16- 117-4(c), all debt repayment will be paused unless a recipient requalifies no later than eighteen (18) months after the initial separation.
(f) Upon the effective date 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 §§ 16-117-4 and 16-117-6.
(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. 16-117-6. 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 the individual's undergraduate or graduate education. 16-117-7. Student loan repayment program limits.
(a) The total amount of student loan repayment shall not exceed a monthly payment of five hundred dollars ($500).
(b) The total amount of student loan repayments shall not exceed the outstanding balance. 16-117-8. 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 rules and 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 established 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. 16-117-9. 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
(2) An individual’s income-to-student debt ratio. 16-117-10. 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.
