S 2662Higher Education

Education - Student Loan Repayment Program

Creates a state fund to help pay student loans for workers in high-need jobs who commit to working in Rhode Island.

Held for study

Population
Affected

Introduced Feb 27, 2026Committee Senate Finance

Plain-English Summary

This bill creates the "Rhode Island Student Loan Repayment Program." Administered by the Rhode Island Student Loan Authority (RISLA), it establishes a fund to help pay off student loans for people working in "high-need" professions within the state. To qualify, an employee must commit to working full-time in Rhode Island for two years in a field experiencing a workforce shortage. The state provides funds to the employer, who then makes payments toward the employee's student loans. The program depends on available funding from the state or other sources.

For younger readers

This law creates a special piggy bank to help people pay back money they borrowed for college. To get help, a person must work a job that Rhode Island really needs, like a doctor or teacher, for two years. Instead of giving the money directly to the worker, the state gives it to their boss, who then uses it to pay the loan. This helps people pay for school and makes sure important jobs in the state get filled.

Who & Where It Applies

Impacted groups

Student loan borrowersEmployers in high-need professionsRhode Island Student Loan Authority (RISLA)Department of Labor and TrainingResidents in underserved communities

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Provides direct financial relief to workers burdened by student debt, potentially helping to close the wealth gap and supporting the economic stability of younger generations.
Prioritizes "underserved communities" and "critical public needs," which ensures that the benefits are directed toward areas that require social justice and improved public services.
Encourages the retention of essential workers in vital sectors, such as healthcare and education, thereby strengthening the community's social safety net.
Funnels relief payments through employers rather than directly to the borrower, which ties social benefits to employment status and gives corporations more control over worker finances.
The program is "subject to the availability of funds," meaning it lacks a guaranteed revenue stream and could potentially leave vulnerable workers without the promised support if the legislature does not appropriate money.
Limits relief to only two years, which may be insufficient to make a substantial dent in the systemic issue of ballooning student loan interest and principal for low-income workers.

For Conservatives

Addresses workforce shortages in critical industries by incentivizing employment rather than offering unconditional handouts, aligning aid with economic productivity.
Requires a firm two-year full-time work commitment and enrollment in repayment programs, ensuring that beneficiaries are actively contributing to the economy and taking personal responsibility.
Allows the fund to accept private donations, grants, and gifts, potentially reducing the burden on the taxpayer by leveraging private sector or non-profit contributions.
Expands government bureaucracy by tasked a state agency (RISLA) with managing a new financial redistribution program, which increases administrative overhead.
Involves the government in picking winners and losers by allowing a state agency to define which professions are "high-need," potentially distorting the free market for labor.
Creates a potential permanent expense for the state budget that targets a specific group of borrowers, effectively socializing the cost of individual debt decisions.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 175 additions

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 a restricted receipt account to be administered by the Rhode Island student loan authority (RISLA) for the benefit of employers and employees 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 not be 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) Operation of the program shall be subject to the availability of funds. The program may be funded through appropriations by the general assembly and through any other funds made available for this purpose including, but not limited to, federal funds, state funds, settlement funds, grants, gifts, donations, or any other public or private sources. RISLA is authorized to receive, accept, and expend such funds necessary to implement the program upon the availability of sufficient funding. 16-117-3. Definitions. For the purposes of this chapter:

(1) "Administering agency" means the department of labor and training.

(2) “Debt relief recipients” means individuals receiving student debt relief under this chapter;

(3) “Eligible individuals” means persons described in §§ 16-117-4 and 16-117-6;

(4) “Request for student debt relief” means the process by which individuals submit the materials and documentation required by RISLA under this chapter;

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

(6) “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

(7) “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 in a high-need profession determined by the administering agency to address a workforce shortage or critical public need within the state. For purposes of this section, “high-need profession” means any occupation identified by the administering agency, as experiencing a workforce shortage or critical hiring need within the state. The administering agency may update such designations from time to time by rule or public notice;

(3) Have committed to work full-time in such profession for two (2) consecutive years in this state; and

(4) Have applied and are enrolled in an income driven repayment program with the federal student aid for any federal student loans.

(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 for future fund administration;

(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- 117-4 and 16-117-6;

(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 §§ 16-117-4 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 shall resume once the leave of absence ends and the debt relief recipient returns to work in a high-need profession, 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 the recipient has resumed working as a qualified individual 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 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- 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 in a high-need profession within the state for fewer than three (3) years 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 in a high-need profession within the state for three

(3) or more years 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 individual's undergraduate or graduate education. 16-117-7. Student loan repayment program limits.

(a) The amount of student loan repayment provided monthly under this section shall be subject to the availability of funds. RISLA may establish and adjust a monthly repayment cap as necessary, based on available funding and in furtherance of the goal of addressing shortages in high-need professions.

(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 consistent with the terms and conditions of RISLA’s employer repayment program and the employer’s section 127 educational assistance program.

(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 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. 16-117-9. Disbursement.

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

(1) Paid directly to the employer on a monthly basis for proper disbursement consistent with the employer’s section 127 educational assistance program; 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 from the fund 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.

SECTION 2. This act shall take effect upon passage.