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Committee approves changes to interest rate policy for service scholarship repayments in Senate Bill 50
Summary
The Kansas House Committee on Education advanced Senate Bill 50 with an amendment making the interest rate for service scholarship repayment equal to the Federal PLUS loan rate at the time the repayment agreement is signed; an amendment to make interest accrue from the original disbursement date failed 5-12.
The House Committee on Education voted to advance Senate Bill 50 as amended, replacing a fixed 5 percentage-point add-on with an interest rate tied to the federal PLUS loan rate at the time an individual signs a repayment agreement.
The measure, discussed at length in committee, governs repayment terms for multiple state service scholarship programs. Committee Chair (unnamed) opened deliberations after staff provided background and Vice President Elaine Frisbie, representing the Kansas State Department of Education, summarized program data and historical practices.
Frisbie told the committee that 434 individuals are currently in repayment status under the state's service scholarship programs and that 227 of those people are in collections. She provided example account histories: a teacher service scholarship recipient who received a $5,000 award now has a payoff of about $12,770 due to accrued interest; a nursing scholarship recipient who received $5,000 now owes more than $17,000; a more recent recipient who…
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