Substitute Bill No. 8 proposes significant changes to higher education affordability and graduate retention in Connecticut, with amendments to the general statutes effective July 1, 2023. The bill revises the definition of an "award" to a minimum of $1,000 for full-time students and $600 for part-time students, up from $250 and $150, respectively. It also modifies the definition of a "qualifying student" by removing the first-time enrollment requirement and the sections regarding leaves of absence and military duty. The bill mandates the establishment of a debt-free community college program and reallocates funds from the Roberta B. Willis Scholarship program to the Connecticut State University System. Additionally, it introduces the Student Loan Subsidy Program to subsidize interest rates on loans for individuals in high-demand professions, with the Connecticut Higher Education Supplemental Loan Authority (CHESLA) and the Office of Workforce Strategy setting eligibility criteria.

The bill also includes changes to the Connecticut general statutes regarding state income tax adjustments. It proposes a phased-in inclusion of distributions from individual retirement accounts, starting with a 25% inclusion in 2023 and reaching 100% in 2026. The bill allows for a deduction of student loan interest not deductible for federal adjusted gross income, with a maximum annual deduction of $2,500 per taxpayer. The bill defines terms related to the student loan interest deduction and sets eligibility based on income limits and filing status. The bill includes deletions, such as the removal of the word "and" in one clause, and insertions, such as the addition of the student loan interest deduction provision, with most sections effective on July 1, 2023, and the student loan interest deduction effective January 1, 2024.

Statutes affected:
Committee Bill: 12-701
HED Joint Favorable: 12-701
File No. 139: 12-701
APP Joint Favorable: 12-701