Committee hears proposal to standardize service scholarship repayment at 5%

A House Education Committee on Thursday heard testimony on Senate Bill 50, a measure to create uniform repayment terms for state service scholarships administered by the Kansas Board of Regents, including a flat 5% annual interest rate and clarified accrual timing for repayment obligations.

The bill, described by a committee reviser as amendments “regarding uniform repayment terms, and conditions, for, service scholarships that are administered by the Kansas Board of Regents,” would set a single interest rate and allow the board to determine the accrual date when a recipient’s repayment obligation begins, the reviser said during opening remarks.

The proposal is intended to simplify disparate statutory terms across multiple programs and to limit the long‑run financial burden on students who fail to meet service requirements. “Senate Bill 50 was introduced at the request of the Kansas Board of Regents,” Elaine Frisbie, vice president for finance and administration at the Board of Regents, told the committee.

Key provisions described to the committee

- A uniform interest rate of 5% per annum for repayment obligations that arise when a scholarship recipient does not complete required service, with an accrual date to be determined by the Board of Regents. - The 5% rate would apply prospectively when an obligation begins; the reviser said the bill’s provisions “apply to all repayment obligations, including those arising from financial assistance that was provided prior to July first of 20 25,” meaning the uniform rate controls when repayment accrual begins after that date. - If an existing agreement specified a lower interest rate, the lower rate would govern. - New language would authorize the board to recover reasonable collection costs (attorney fees, court costs, collection agency fees) and to set charges or fees for administering service scholarships. - The bill makes a technical change for the adult learner grant program so the agreement is between the student and the Board of Regents rather than the institution.

Regents testimony and data

Frisbie said the Board requested the bill to unify many programs that were created over different time frames and therefore carry different repayment terms. She told the committee that many current program rates are substantially higher: “For many of our programs, if I may, Madam Chair, it’s the Federal Plus rate and 5 percentage points… so right now for this fiscal year it is 14.08%.”

Frisbie said the board is trying to balance incentive to complete required service against the long-term burden on students. She told lawmakers the board’s records show 434 individuals currently in repayment across service programs and said, “Eighty of those are from the Promise scholarship. They owe just under $2,000,000 in principal and they owe $1,100,000 in interest as of the January.”

Committee members pressed on likely effects and fiscal implications

Members asked whether lowering the prospective interest rate would reduce incentive for recipients to complete service obligations and who would absorb reduced interest earnings. Frisbie said the majority of recipients complete service and that repayment receipts are used to fund additional awards within each program: funds returned to a program’s repayment account support more student awards. She acknowledged a reduced interest rate would modestly reduce those repayments but said the board could estimate the fiscal impact for the committee.

Several members requested more outcome data before taking a position, including counts of recipients who remain working in Kansas after receiving awards and a breakdown of defaults versus active repayment. Frisbie and the reviser said they would provide additional program-level data to the committee record.

Procedure and next steps

The hearing opened with the reviser’s explanation and included questions from multiple representatives; the record contains no formal committee vote on SB 50 during the session. Committee staff indicated the bill’s changes would take effect on July 1 of the year referenced in the testimony if enacted.

Why it matters

The change would standardize terms across dozens of state service scholarship programs, affecting students in programs such as Promise and multiple health‑service scholarships. A lower, uniform interest rate would reduce the long-term repayment burden on recipients who fail to meet service terms but would also reduce interest income that the Board of Regents said it uses to support further awards.