This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0388 - Establishes Missouri Critical Teacher Shortage Forgivable Loan Program
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 1617-01
BILL NO.: SB 388
SUBJECT: Education, Elementary and Secondary: Loan Program
TYPE: Original
DATE: February 23, 1999
FISCAL SUMMARY
|
ESTIMATED NET EFFECT ON STATE FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| General Revenue | ($6,211,718) | ($12,176,769) | ($12,178,570) |
| Total Estimated
Net Effect on All State Funds |
($6,211,718) | ($12,176,769) | ($12,178,570) |
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| None | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 4 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials from the Coordinating Board For Higher Education (CBHE) assume there would not be a direct fiscal impact on the CBHE because the bill specifies that the program would be administered by the State Board of Education. For the Advantage Missouri Program from the 1998 session, a similar program, the CBHE required approximately $135,000 for administration. CBHE officials assume it is likely that administrative costs for the State Board of Education would be similar for this program.
Officials from the Department of Elementary and Secondary Education (DESE) estimated the fiscal impact as follows:
a) Estimated number of eligible students ranges from 2,500 to 3,000 per year. The midpoint of 2,750 will be used for purposes of this fiscal note.
b) The undergraduate/graduate student split will be approximately 90% - 10% respectively.
c). Approximately half will teach in a high-need area:
Undergraduate 1,238
Graduate 137
Total 1,375
d) First year need for loans (FY 2000):
1,238 X $4,000 = $4,952,000
137 X $8,000 = $1,096,000
Total =$6,048,000
e) Second and subsequent year need for loans (FY 2001+) is $6,048,000 X 2 = $12,096,000
Note: reflects 2nd year of students qualifying in FY 2000 plus 1st year of students qualifying FY 2001. This same pattern will carry-forward into the future.
f) Loan Repayments are to be repaid within 10 years after completion of a course of study. Repayments will not begin to appear until the 3rd year of the program. The amount of repayments is dependent on rules and rate schedules to be drafted by the Department of Elementary and Secondary Education, hence a specific estimate is difficult to develop. However, it is believed loan repayments will total less than $500,000 in FY 2002. The bill does not specify where monies repaid by students should be deposited.
ASSUMPTION (continued)
g) A supervisor will be needed to run the program.
h) A significant IT impact will be incurred to support data-processing needs for this program. Initial development cost is estimated to be $540,000. Ongoing maintenance is estimated to be $10,000 to $50,000 per year (a midpoint of $30,000 is used). The Oversight Division assumes the programming would be relatively simple and has only included $100,000 the first year and $10,000 in subsequent years.
| FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Cost-Department of Elementary and | |||
| Secondary Education (DESE) | |||
| Personal Service | ($40,154) | ($49,409) | ($50,644) |
| Fringe Benefits | (12,002) | (14,768) | (15,137) |
| Expense and Equipment | (11,562) | (6,592) | (6,789) |
| Programming | (100,000) | (10,000) | (10,000) |
| Loans | (6,048,000) | (12,096,000) | (12,096,000) |
| Total Cost-DESE | ($6,211,718) | ($12,176,769) | ($12,178,570) |
| FISCAL IMPACT - Local Government | FY 2000 | FY 2001 | FY 2002 |
| (10 Mo.) | |||
| 0 | 0 | 0 | |
| FISCAL IMPACT - Small Business | |||
| No direct fiscal impact to small businesses would be expected as a result of this proposal. | |||
DESCRIPTION
The Missouri Critical Teacher Shortage Forgivable Loan Program would make undergraduate and graduate forgivable loans available to eligible students entering programs leading to a degree in teaching in a teacher shortage area. The proposal includes eligibility requirements.
An undergraduate loan could be awarded for two years and would not exceed $4,000 per year, or for a maximum of three years for programs requiring a fifth year of instruction to obtain initial teaching certification.
DESCRIPTION (Continued)
A graduate loan could be awarded for two years and would not exceed $8,000 per year.
The State Board of Education would adopt repayment schedules and interest rates. A loan would be repaid within ten years of completion of a program of studies.
Credit for repayment would not exceed $4,000 in loan principal plus interest for each full year of teaching service. However, credit not exceeding $8,000 in principal and interest would be given for each year of service completed at a low-economic condition urban or rural school as identified by the State Board.
Any loan recipient failing to teach in a qualifying school would repay the loan plus interest at 8%.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Elementary and Secondary Education
Coordinating Board For Higher Education
Jeanne Jarrett, CPA
Director
February 23, 1999