Higher Education and Employment Advancement Committee
JOINT FAVORABLE REPORT
Bill No.: SB-18
AN ACT REQUIRING THE CONNECTICUT HIGHER EDUCATION
SUPPLEMENTAL LOAN AUTHORITY TO ESTABLISH A STUDENT LOAN
Title: SUBSIDY PROGRAM.
Vote Date: 3/10/2020
Vote Action: Joint Favorable Substitute
PH Date: 2/13/2020
File No.:
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Higher Education and Employment Advancement Committee
REASONS FOR BILL:
This bill allows CHESLA to establish a student loan subsidy program to subsidize the interest
rate on authority loans for individuals who (1) are employed in the state, (2) commit to live in
the state for at least five years, and (3) meet other eligibility established by CHESLA and
OPM. It also requires CHESLA to hold funds in a separate, nonlapsing account, and to
expend funds to administer the subsidy program. It requires the OPM secretary to enter into
an MOU with CHESLA to establish subsidy program administrative guidelines, and allows the
State Bond Commission to authorize up to $15 million in bonds for program expenses.
Substitute language changes the programs purpose to "reducing" rather than "subsidizing"
loan interest rates, and requires, rather than allows, OPM secretary to enter into an MOU with
CHESLA to establish program administrative guidelines. It also requires that the interest rate
subsidy terminate for any individual who moves out of state during the term of the loan.
RESPONSE FROM ADMINISTRATION/AGENCY:
CT Higher Education Supplemental Loan Authority: CHESLA submitted testimony in
support of this bill. They note that while Connecticut has one of the highest rates of college
participation in the country, many new college graduates are leaving our state. They believe
this bill will address this problem by incentivizing Connecticuts graduates to stay in
Connecticut and establish their careers here, and that these low or no-interest loans would be
relatively simple to implement. They note that in the future, they could partner with private
companies to match funds to expand this program.
NATURE AND SOURCES OF SUPPORT:
Connecticut Realtors: The CT Realtors submitted testimony in support of this bill. They note
that the average first-time homebuyer is delayed an average of seven years mainly due to
student loan debt. They believe this bill will give the state an opportunity to become a leader
in addressing the student debt crisis and give recent graduates additional reasons to live and
work in Connecticut.
NATURE AND SOURCES OF OPPOSITION:
None expressed.
Reported by: Assistant Clerk Krystin DeLucia Date: March 16, 2020
Page 2 of 2 SB-18