No. 43405 (New Rule): Rule R765-615. Talent Development Incentive Loan Program

(New Rule)

DAR File No.: 43405
Filed: 11/20/2018 06:37:10 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to establish the criteria and process for awarding incentive loans from the Talent Development Incentive Loan Program (Program) under Section 53B-10-2.

Summary of the rule or change:

The Program provides a loan to students who are pursuing a qualifying degree for a qualifying job, and intends to work in a qualifying job in Utah. The Governor's Office of Economic Development will determine which jobs are qualifying and the qualifying degrees for each. Institutions may forgive the students' loans based on how long the students work in qualifying jobs. The Legislature directed the Board of Regents (Board) to oversee the application process and general administration of the Program, including a process for appropriately dividing funding among the institutions. This policy establishes the operating procedures for this Program directed by the Legislature.

Statutory or constitutional authorization for this rule:

• Section 53B-10-2

Anticipated cost or savings to:

the state budget:

The Legislature appropriated $2,500,000 ongoing during the 2018 General Session to fund this Program. The Board of Regents will distribute the funds to the eight institutions of higher education who will receive applications and issue the loan funds to students who are deemed eligible. Use of the appropriated funds will depend on the number of eligible students who apply for and receive the incentive loans. The rate of loan repayment and loan forgiveness will also impact the available funds moving forward, but estimating the total use of the funds is difficult given the novelty of the program. The Board will disperse the funds to the institutions, who may use up to five percent for administrative costs. Because this is legislatively funded, there is no negative impact on the institutions' current operating budgets.

local governments:

This rule does not impact local governments. The program is administered by the Utah System of Higher Education (USHE) institutions and benefits USHE students.

small businesses:

Businesses may partner with the Board to supplement the legislative appropriation, but that is strictly voluntary and not required under the statute or this administrative rule. Therefore, there is no cost to small businesses.

persons other than small businesses, businesses, or local governmental entities:

Individual students who qualify for the incentive loan will benefit by receiving interest free loan funds that can be forgiven over time provided the student receives a qualifying degree and works in a qualifying job as defined by this rule. Loan amounts will vary from institution to institution and will depend on the major in which the eligible students are seeking a degree. Schools may loan an amount up to the cost of in-state tuition, books, and fees.

Compliance costs for affected persons:

The Board and USHE institutions will incur administrative costs to comply with this rule. Because this Program is new, it is difficult to determine the actual costs, but the legislative appropriation provides up to five percent of the appropriated amount to be used for administrative costs.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule will not have a negative fiscal impact on businesses. Indirectly, businesses in Utah will benefit by having a deeper talent pool of USHE graduates who have obtained degrees that match high demand, high paying jobs.

Dave Buhler, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Regents (Board of)
Administration
BOARD OF REGENTS BUILDING, THE GATEWAY
60 SOUTH 400 WEST
SALT LAKE CITY, UT 84101-1284

Direct questions regarding this rule to:

• Geoff Landward at the above address, by phone at 801-321-7136, by FAX at , or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

01/16/2019

This rule may become effective on:

01/25/2019

Authorized by:

Dave Buhler, Commissioner of Higher Education

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

State Government

$2,500,000

$2,500,000

$2,500,000

Local Government

$0

$0

0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Person

$0

$0

$0

Total Fiscal Costs:

$2,500,000

$2,500,000

$2,500,000

Fiscal Benefits

State Government

$0

$0

$0

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Persons

$2,500,000

$2,500,000

$2,500,000

Total Fiscal Benefits:

$2,500,000

$2,500,000

$2,500,000

Net Fiscal Benefits:

$0

$0

$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

This proposed rule is not expected to have any fiscal impact on non-small businesses' revenues or expenditures because the legislation that required this rule created an incentive loan program specifically for the public colleges and universities within the Utah system of higher education to be provided to eligible students within the system of higher education. Non-small businesses are neither impacted or directly benefit from the incentive loan program.

 

The Commissioner of Higher Education, David Butler, has reviewed and approved this fiscal analysis.

 

 

R765. Regents (Board of), Administration.

R765-615. Talent Development Incentive Loan Program.

R765-615-1. Purpose.

To establish the criteria and process for awarding incentive loans from the Talent Development Incentive Loan Program under Title 53B, Chapter 10, Part 2, Talent Ready Incentive Loan Program.

 

R765-615-2. References.

2.1. Title 53B, Chapter 10, Part 2, Talent Ready Incentive Loan Program.

 

R765-615-3. Definitions.

3.1. "Full-time student" means a student who is enrolled in a minimum of 12 credit hours.

3.2 "GOED" means the Governor's Office of Economic Development created in Section 63N-1-201.

3.3. "Incentive loan" means an incentive loan awarded by an institution to a full-time student who has met the eligibility criteria as established by the Board of Regents.

3.4. "Qualifying degree" means an associate's or a bachelor's degree that qualifies an individual to work in a qualifying job.

3.5. "Qualifying job" means a job described in Section 6.2 for which an individual may receive an incentive loan.

 

R765-615-4. Appropriations.

The program is funded by appropriations from the Legislature made in accordance with Section 53B-10-201.

 

R765-615-5. Application Procedures.

5.1. The institutions shall develop an application that, at minimum, collects the following information:

5.1.1. The applicant's status as a full-time or part-time student.

5.1.2. The applicant's current enrollment or registered enrollment for and the upcoming semester if available.

5.1.3. A transcript demonstrating the applicant's completed course work.

5.1.4. A section for the applicant to formally declare his or her intent to pursue a qualifying degree and to work in a qualifying job, with a signature.

5.2. Institutions shall set application deadlines by which applicants must submit all required materials.

5.3. Institutions shall determine the most efficient method for issuing incentive loan funds and collect the necessary information for that purpose.

 

R765-615-6. Qualifying Criteria.

6.1. Applicants must meet the following criteria to qualify for an incentive loan:

6.1.1. The applicant must have completed at least two semesters of full-time equivalent course work if he or she is pursuing a bachelor's degree, or at least one semester of full-time equivalent course work if he or she is pursuing an associate degree.

6.1.2. The applicant is enrolled full-time.

6.1.3. The applicant signs a declaration stating he or she is pursuing or will pursue a qualifying degree.

6.1.4. The applicant signs a declaration stating his or her intent to work in a qualifying job in Utah following graduation.

6.1.5. The applicant must provide the institution verification of registration for classes within the qualifying degree program before the institution may release the funds.

6.2. Every other academic year, the Governor's Office of Economic Development (GOED) shall select five jobs that have the highest demand for new employees and offer high wages. Beginning the August of that year, those five positions are designated as qualifying jobs for the purposes of this incentive loan program. When selecting the qualifying jobs, GOED shall ensure the jobs meet the following criteria:

6.2.1. Rank in the top 40 percent of jobs based on an employment index that considers job growth rates and total openings.

6.2.2. Rank in the top 40 percent for wages.

6.2.3. Requires an associate degree or a bachelor's degree.

6.3. In conjunction with selecting the qualifying jobs, GOED will identify and designate the bachelor's or associate degrees required to qualify for the five qualifying jobs.

 

R765-615-7. Loan Amounts.

7.1. Institutions may loan an amount up to the cost of resident tuition, books, and fees for their respective institutions.

7.2. Institutions may loan amounts up to the expected time for the recipient to complete the qualifying degree, as determined by the institution.

 

R765-615-8. Funding Distribution.

8.1. The Board will disburse appropriated funds to the institutions by calculating the three-year average of the qualifying degrees each institution awarded using the following assumptions:

8.1.1. Tuition and fees (not including books, differential, course, or program fees).

8.1.2. Full tuition and fee cost of associate degree students by institution for three semesters (requires 1 semester before applying).

8.1.3. Full tuition and fee cost of bachelor's degree students by institution for six semesters (requires 2 semesters before applying).

8.1.4. After year one, tuition and fees adjusted for inflation (five-year average of 3.5 percent).

 

R765-615-9. Loan Cancellation, Repayment, and Waiver.

9.1. For each year that a recipient works in a qualifying job in Utah following completion of a qualifying degree, the institution that awarded the incentive loan shall waive repayment of the amount of one year of the recipient's incentive loan.

9.2. An institution shall require a recipient to repay to the institution the full amount of an incentive loan if the recipient fails to:

9.2.1. Graduate with a qualifying degree within six years of initially receiving the incentive loan,

9.2.2. Work in a qualifying job in Utah within one year of completing a qualifying degree, or

9.2.3. Work in a qualifying job for fewer years than the number of years required to waive repayment of the full incentive loan.

9.3. Institutions may cancel an incentive loan if the recipient changes the degree he or she selected in the declaration at any time prior to graduation.

9.4. Institutions may waive repayment if a recipient has graduated with a qualifying degree within six years of receiving the loan, works in a non-qualifying job that the institution determines is reasonably related to the degree, and resides in Utah.

9.5. Institutions may delay repayment for reasonable, unforeseen circumstances that inhibits the recipient's ability to meet the requirements for loan payment waivers as described above.

9.6. Institutions may waive repayment for circumstances of prolonged financial hardship.

 

R765-615-10. General Administration.

10.1. Institutions may establish policies for administering this program that align with their existing practices and financial aid programs.

 

KEY: higher education, loans, talent ready, incentives

Date of Enactment or Last Substantive Amendment: 2019

Authorizing, and Implemented or Interpreted Law: 53B-10-201

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