Researcher: MGS Page 1 4/6/21
OLR Bill Analysis
sSB 932
AN ACT CONCERNING AN ALLIANCE DISTRICT TEACHER LOAN
SUBSIDY PROGRAM.
SUMMARY
This bill requires the Connecticut Higher Education Supplemental
Loan Authority (CHESLA) to establish an Alliance District Teacher
Loan Subsidy Program. This program must subsidize interest rates on
CHESLA loans to teachers employed in alliance districts (see
BACKGROUND), subject to available funding.
Under the bill, CHESLA must enter into a memorandum of
agreement with the education commissioner to establish the program’s
eligibility criteria and administrative guidelines. The authority must
also establish a separate, non-lapsing account to hold funds required
by law to be deposited there, including state appropriations or bond
sale proceeds.
The bill authorizes up to $7 million per year in general obligation
bonds and requires CHESLA to use the proceeds for the Alliance
District Teacher Loan Subsidy Program. The bonds are subject to
standard statutory bond issuance procedures and repayment
requirements.
EFFECTIVE DATE: July 1, 2021
PROGRAM ELIGIBILITY CRITERIA AND ADMINIS TRATIVE
GUIDELINES
The bill requires the loan subsidy program eligibility criteria and
guidelines to include at least the following:
1. applicant eligibility,
2. interest rate subsidies and principal limits on authority loans
subject to the Alliance District Teacher Loan Subsidy Program, 2021SB-00932-R000289-BA.DOCX
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3. the process for verifying applicants’ employment, and
4. the requirement that an interest rate subsidy through the
Alliance District Teacher Loan Subsidy Program terminate for a
subsidy recipient who no longer meets the program’s
employment requirements during the loan’s term.
PROGRAM ACCOUNT EXPE NDITURES
This bill requires CHESLA to spend funds in the program’s account
for purposes of subsidizing loans under the program. In addition,
CHESLA must spend account funds to cover reasonable and necessary
expenditures for the program’s administration, as well as any losses
from issuing authority loans to refinance one or more eligible loans for
the purposes of the program. Under the bill, “eligible loans” are loans
in repayment that are (1) CHESLA-issued or (2) issued by another
private or governmental lender to finance college or university
attendance.
BACKGROUND
Alliance Districts
Alliance districts are the 30 school districts that have the lowest
achievement, as rated by the state’s accountability index, plus the three
districts that were previously among the lowest 30 when the program
started in FY 13 (CGS § 10-262u).
For FYs 18-22, the alliance districts are as follows: Ansonia,
Bloomfield, Bridgeport, Bristol, Danbury, Derby, East Hartford, East
Haven, East Windsor, Groton, Hamden, Hartford, Killingly,
Manchester, Meriden, Middletown, Naugatuck, New Britain, New
Haven, New London, Norwalk, Norwich, Putnam, Stamford,
Thompson, Torrington, Vernon, Waterbury, West Haven, Winchester,
Windham, Windsor, and Winsor Locks.
COMMITTEE ACTION
Higher Education and Employment Advancement Committee
Joint Favorable Substitute
Yea 20 Nay 2 (03/18/2021)