JUNEAU, Alaska — The Senate State Affairs Committee has advanced a proposed constitutional amendment that would allow state backing on low-interest loans for students interested in college.
The proposal, sponsored by Republican Sen. Anna Fairclough of Eagle River, would allow Alaska’s general obligation debt to be used as a tool in funding education loans.
Constitutionally, the debt can only be used currently for capital improvements and housing loans for veterans.
Fairclough said the proposed amendment would allow a cost-effective way for financing state education loans by leveraging Alaska’s AAA credit rating.
Diane Barrans, executive director of the Alaska Commission on Postsecondary Education, said if the amendment is approved it will mean a sizable change on rates. The current interest rate is 7.3 percent.
The measure moves to the Senate Education Committee.