SENATE BILL NO. 380

June 19, 2019, Introduced by Senators BAYER, POLEHANKI, WOJNO, IRWIN, MOSS, BULLOCK, HERTEL, ANANICH, GEISS, MCMORROW, BRINKS, ALEXANDER and SANTANA and referred to the Committee on Appropriations.

A bill to establish a teachers loan forgiveness program for eligible teachers in certain at-risk schools; to establish a teachers loan forgiveness fund and to provide for its administration; and to prescribe certain powers and duties of certain state officers, agencies, and departments.

the people of the state of michigan enact:

Sec. 1. This act shall be known and may be cited as the "excellence in education act".

Sec. 2. As used in this act:

(a) "At-risk school" means a public or nonpublic elementary or secondary school where at least 50% of students at the school meet the income eligibility criteria for the free or reduced-priced lunch program in the immediately preceding state fiscal year, as determined under the national school lunch act, 42 USC 1751 to 1769j.

(b) "Department" means the department of education created under sections 300 to 305 of the executive organization act of 1965, 1965 PA 380, MCL 16.400 to 16.405.

(i) The total remaining principal balance of all state and federal loans obtained by an individual during his or her first 4 years of enrollment in a teacher education program at a public or private college or university or community college at the time the individual first applies for a grant under this act.

(ii) $20,000.00, if the total remaining principal balance described in subparagraph (i) exceeds $20,000.00.

(d) "Fund" means the teachers loan forgiveness fund created in section 6.

(e) "Grant" means money awarded to an individual under this act in an amount determined under section 5.

Sec. 3. The teachers loan forgiveness program is created, to be administered by the department. Subject to appropriation, the department shall do all of the following:

(a) Award grants to eligible teachers under this act.

(b) Develop an application form and application process for teachers applying for grants under this act.

(c) Promulgate any rules necessary to implement this act pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

Sec. 4. The department may award a grant under section 5 to an individual determined by the department to meet all of the following eligibility criteria:

(a) Has eligible debt at the time of application.

(b) Is a legal resident of this state.

(c) Was issued his or her initial teaching certificate under section 1531 of the revised school code, 1976 PA 451, MCL 380.1531, not more than 3 years before first applying for a grant under this act.

(d) Is not eligible for any other loan forgiveness program applicable to his or her eligible debt.

(e) Has not previously defaulted and is not currently in default on his or her eligible debt.

(f) Has accepted an offer of employment or will continue to teach in an at-risk school in the school's academic year that begins on or after the first July 1 following the date of the application.

(g) Has submitted a grant application to the department by July 1. The grant application must include a certification that the applicant meets the eligibility criteria described in this section and has applied for all state or federal loan repayment programs applicable to his or her eligible debt.

(h) Has met any other requirements established by the department.

Sec. 5. (1) The department shall award an individual eligible under section 4 a grant under this subsection. Subject to subsection (2) and to adjustment under subsection (3), the maximum aggregate amount of the grant is an amount equal to the individual's eligible debt. Before each consecutive year of continuous teaching in any at-risk school, for up to 10 consecutive years, the department shall, subject to adjustment under subsection (3), award a partial grant and shall apply that partial grant to the individual's eligible debt as a prepayment in an amount equal to 10% of the individual's eligible debt.

(2) The department shall reduce a grant awarded under subsection (1) by an amount equal to the amount the individual is entitled to receive from any state or federal loan repayment program applicable to his or her eligible debt.

(3) In any state fiscal year, the department may adjust the amount of each partial grant under subsection (1) on a pro rata basis, based upon its determination of money available from the fund and from appropriations in that fiscal year. If it makes an adjustment under this subsection, the department shall notify each grant recipient of his or her obligation to continue to make payments of principal and interest on his or her eligible debt in the manner described in his or her student loan documents.

Sec. 6. (1) There is created the teachers loan forgiveness fund as a separate fund in the state treasury, to be administered by the department of treasury. The department of treasury may accept money for the fund from any source. The state treasurer shall deposit that money and credit the amount to the fund. The department of treasury shall use the fund only to provide money to the department for grants awarded under this act.

(2) The state treasurer shall direct the investment of the fund money and shall credit earnings to the fund.

(3) Money in the fund at the end of a fiscal year shall not revert to the general fund but shall be carried over in the fund to the next fiscal year.