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S.F. No. 871 - Student Loan Debt Counseling Grant Program
Author: Senator Gregory D. Clausen
Prepared By: Priyanka Premo, Senate Counsel (651/296-3914)
Date: March 13, 2017


S.F. 871 establishes a permanent, statutory program to provide a grant to an organization offering student loan debt counseling.  The Office of Higher Education (OHE) will administer the grant program.

Background: The 2015 Legislature appropriated $150,000 to OHE for a temporary student loan debt counseling pilot program. The pilot program grant was awarded to Lutheran Social Services. The program established in S.F. 871 is similar to the pilot program established in 2015.

Section 1. Student loan debt counseling. Establishes an OHE program to provide grants to qualified organizations offering student loan debt repayment counseling.

Subdivision 1. Grant. Permits an organization receiving a grant to offer counseling to those capable of being served with available appropriations. Sets a goal that a grantee provide at least two counseling sessions to 75 percent of borrowers receiving counseling. Establishes that the purpose of the counseling is to enable borrowers to understand their loan and repayment options, manage loan repayments, and develop a workable budget.

Subd. 2. Qualified debt counseling organization. Defines a qualified debt counseling organization as one that has experience in student loan counseling, employs certified financial loan counselors, and is based in Minnesota and has offices in multiple rural and metropolitan locations.

Subd. 3. Grant application and award. Requires that applications be made in a form and manner specified by the commissioner. Describes the components that must be included on the application. Requires the commissioner to select one grant recipient every two years. The grant recipient would receive funding for both years of the biennium.

Subd. 4. Program evaluation. Requires a grant recipient to submit a report to the commissioner of higher education every two years. Specifies data elements to be included in the report.

Subd. 5. Report to legislature. Requires the commissioner of higher education to submit a report on the program to the higher education committees of the legislature every two years.

Sec. 2. Appropriation. Appropriates an unspecified amount from the general fund for the student loan debt counseling program in section 1.

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