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S.F. No. 2517 - Creating a Low-Interest Student Loan Program
 
Author: Senator Rich Draheim
 
Prepared By: Joan White, Senate Counsel (651/296-3814)
 
Date: March 22, 2019



 

S.F. No. 2517 creates a low-interest loan program for students attending postsecondary institutions.

Section 1 (136A.165, subdivision 1) establishes the higher education loan program (HELP) to provide low-interest loans to eligible students. 

Subdivision 2 requires the Commissioner of the Office of Higher Education to issue HELP loans to eligible students at a fixed interest rate not to exceed three percent, unless another fixed rate is established in law.  Loans are available up to the amount of available funds. The HELP loan must not exceed $5,000 annually, and the cumulative cap is $20,000 per student. The commissioner may contract with an outside servicer to implement the loan program.

Subdivision 3 establishes the HELP loan account in the special revenue fund. Principal and interest repaid to the commissioner shall be deposited in the account, and all money in the account is appropriated to the commissioner to make HELP loans. 

Subdivision 4 specifies the eligibility for HELP loans.  A student is eligible if the student is a Minnesota resident, attending an institution in Minnesota, and the student’s household income is less than or equal to 300 percent of the federal poverty guidelines. 

Subdivision 5 allows the commissioner to adopt rules to implement the provisions in this section.

Section 2 appropriates $17,500,000 per year for biennium from the general fund to the Office of Higher Education (OHE) for deposit in the HELP account. The commissioner may use up to three percent of this appropriation for administrative costs.  There is also a blank appropriation in fiscal year 2020 for a onetime appropriation from the general fund to OHE to secure a loan service for the HELP program.

 
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