A BILL TO BE ENTITLED
AN ACT TO ESTABLISH A Forgivable LOAN PROGRAM FOR PROSPECTIVE STEM AND SPECIAL EDUCATION TEACHERS.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 23 of Chapter 116 of the General Statutes is amended by adding a new Part to read:
"Part 3. North Carolina STEM and Special Education Scholars Program.
"§ 116‑209.60.  Forgivable education loans for prospective science, technology, engineering, mathematics, and special education teachers.
(a)	Policy. – The General Assembly finds that it is in the public interest to provide financial assistance in the form of forgivable loans for service to exemplary high school seniors who are committed to working as teachers of science, technology, engineering, mathematics (STEM), or special education in the North Carolina public schools.
(b)	Definitions. – The following definitions apply in this Part:
(1)	Authority. – The State Education Assistance Authority.
(2)	Eligible institution. – Notwithstanding G.S. 116‑201(b)(5) and G.S. 116‑201(b)(6) and for purposes of this Part only, an institution of higher education that is a postsecondary constituent institution of The University of North Carolina as defined in G.S. 116‑2(4).
(3)	Fund. – The North Carolina STEM and Special Education Scholars Fund.
(4)	Loan. – A forgivable loan made under the North Carolina STEM and Special Education Scholars Program.
(5)	Program. – The North Carolina STEM and Special Education Scholars Program.
(6)	School unit of domicile. – The local school administrative unit in which the student receiving a loan under this Part attended public school.
(c)	Establishment of the North Carolina STEM and Special Education Scholars Program. – There is established the North Carolina STEM and Special Education Scholars Program to be administered by the Authority. The purpose of the Program is to provide forgivable loans for service to exemplary high school seniors who are committed to working as teachers of science, technology, engineering, mathematics, or special education.
(d)	The North Carolina STEM and Special Education Scholars Fund. – There is established the North Carolina STEM Scholars Fund to be administered by the Authority. All funds appropriated to or otherwise received by the Authority to provide loans through the Program, all funds received as repayment of loans, and all interest earned on these funds shall be placed in the Fund. The Fund shall be used only for (i) loans made pursuant to this section, (ii) the administrative costs of the Authority, and (iii) costs incurred by the Board of Governors in providing extracurricular activities to loan recipients.
(e)	Eligibility for Loans. – The Authority shall establish the criteria for initial and continuing eligibility to participate in the Program. All loan recipients shall be residents of North Carolina and shall attend an eligible institution. The Authority shall adopt very stringent standards, including a minimum 3.0 grade point average and scholastic aptitude test scores, for awarding these scholarship loans to ensure that only the best high school seniors receive the loans. Recipients of this loan shall not be eligible to concurrently receive forgivable loans provided to teachers pursuant to G.S. 116‑209.45.
(f)	Loan Terms and Conditions. – The following terms and conditions shall apply to each loan made pursuant to this section:
(1)	Promissory note. – All loans shall be evidenced by promissory notes made payable to the Authority.
(2)	Interest. – All promissory notes shall bear an interest rate established by the Authority that does not exceed ten percent (10%) and is in relation to the current interest rate for nonneed‑based federal loans made pursuant to Title IV of the Higher Education Act of 1965, as amended. Interest shall accrue from the date of disbursement of the loan funds.
(3)	Loan amount. – The loan amount shall be five thousand dollars ($5,000) per year at the date of establishment of this Program and legislation. Notwithstanding this loan amount, it shall be the intent of this statute for the Authority to provide Program recipients a loan as close as is practicable to an amount equal to the average tuition, fees, and basic on‑campus housing and meal plan costs of eligible institutions as of the previous school year. This loan shall not include costs associated with "cost‑of‑living" considerations detailed by each eligible institution. The Authority shall be the ultimate determinant of what equates to a practicable loan amount beyond the aforementioned five thousand dollars ($5,000).
(4)	Matching funds from eligible institutions. – Each eligible institution shall establish its own STEM and Special Education Scholars Fund and shall maintain it pursuant to the provisions of G.S. 116‑36 to function as a depository for private contributions to match State funds appropriated to the Fund for the purposes of subdivision (3) of this subsection.
(5)	Repayment. – The Authority shall forgive the loan if, within six years after graduation, the recipient teaches for four years at a North Carolina public school or at a school operated by the United States government in North Carolina. The Authority shall also forgive the loan if, within six years after graduation, the recipient teaches for three consecutive years at a North Carolina public school that, at the time the recipient accepts employment with the local school administrative unit in which the school is located, is low‑performing, as identified by the State Board of Education pursuant to G.S. 115C‑105.37. The Authority shall have the authority to extend repayment by one additional year at the sole discretion of the Authority. The Authority shall collect cash repayments when service repayment is not completed. The Authority shall establish the terms for cash repayment, including a minimum monthly repayment amount and maximum period of time to complete repayment.
(6)	Priority in hiring for a school unit of domicile. – A school unit of domicile shall have priority in hiring a student who receives a loan in accordance with this Part. The Authority shall notify a school unit of domicile of a recipient's expected graduation date. The school unit of domicile shall have six months from the recipient's graduation date to extend an offer of employment to the recipient. If the recipient receives an offer of employment from another local school administrative unit within the six‑month time period, the student shall give the school unit of domicile a chance to match the offer of employment. The school unit of domicile must make a decision within 10 days of receiving the notice by the recipient that another local school administrative unit has made an offer of employment. If the school unit of domicile does not come forth with an equal or better offer in a STEM or special education area of which the recipient has expertise, the recipient may accept the other offer of employment.
(7)	Death and disability. – The Authority may forgive all or part of a loan if it determines that it is impossible for the recipient to repay the loan in cash or service because of the death or disability of the recipient.
(8)	Hardship. – The Authority may grant a forbearance, a deferment, or both in hardship circumstances when a good‑faith effort has been made to repay the loan in a timely manner.
(9)	Other. – The Authority may establish other terms and conditions that are necessary or convenient to effectuate the Program.
(g)	Extracurricular Activities for Students. – The Board of Governors of The University of North Carolina, in cooperation with the constituent institutions participating in the Program, shall administer extracurricular activities for participating students. These students shall be exposed to a range of extracurricular activities while attending their respective institutions. The activities should be geared toward instilling a strong motivation not only to remain in teaching but to provide leadership for the K‑12 public schools of North Carolina.
(h)	Rule‑Making Authority. – The Authority may adopt rules necessary to implement, administer, and enforce the provisions of this section.
(i)	Report to the General Assembly. – The Authority shall report no later than December 1, 2016, and annually thereafter, to the Joint Legislative Education Oversight Committee regarding the Fund and loans awarded from the Fund."
SECTION 2.  There is appropriated from the General Fund to the Board of Governors of The University of North Carolina the sum of two million nine hundred thousand dollars ($2,900,000) for the 2015‑2016 fiscal year and the sum of five million four hundred thousand dollars ($5,400,000) for the 2016‑2017 fiscal year to implement the provisions of this act. Of these funds:
(1)	Two million five hundred thousand dollars ($2,500,000) shall be used to provide loans for the 2015‑2016 academic year and five million dollars ($5,000,000) shall be used to provide loans for the 2016‑2017 academic year.
(2)	One hundred fifty thousand dollars ($150,000) for the 2015‑2016 fiscal year and one hundred fifty thousand dollars ($150,000) for the 2016‑2017 fiscal year shall be used for administration of the Program by the State Education Assistance Authority.
(3)	Two hundred fifty thousand dollars ($250,000) for the 2015‑2016 fiscal year and two hundred fifty thousand dollars ($250,000) for the 2016‑2017 fiscal year shall be used for extracurricular activities for loan recipients provided by the Board of Governors.
SECTION 3.  This act becomes effective July 1, 2015.