A BILL TO BE ENTITLED
AN ACT TO ESTABLISH A SCHOLARSHIP LOAN PROGRAM FOR PROSPECTIVE STEM AND SPECIAL EDUCATION TEACHERS.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 24C of Chapter 115C of the General Statutes is amended by adding a new part to read:
"Part 3. North Carolina STEM and Special Education Scholars Program.
"§ 115C‑363.25.  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, and special education in the North Carolina public schools.
(b)	Definitions. – The following definitions apply in this section:
(1)	Authority. – The State Education Assistance Authority of the Board of Governors of The University of North Carolina.
(2)	Eligible institution. – Notwithstanding G.S. 116‑201(b)(5) and G.S. 116‑201(b)(6) and for purposes of this section 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 Program.
(5)	Program. – The North Carolina STEM and Special Education Scholars Program.
(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 State Education Assistance 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. These forgivable loans shall be in addition to those provided for teachers pursuant to G.S. 116‑209.45.
(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 minimum grade point average and scholastic aptitude test scores, for awarding these scholarship loans to ensure that only the best high school seniors receive them.
(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 non need‑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, 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 costs of UNC System schools as of 2013. This loan shall not include costs associated with meal plans and "cost of living" considerations detailed by each University. The Authority shall be the ultimate determinate of what equates to a practicable loan amount beyond the aforementioned five thousand dollars ($5000).
(4)	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 in a local school administrative unit that, at the time the recipient accepts employment with the unit, is a low‑performing school system or is on warning status, both as defined by the State Board of Education. 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.
(5)	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.
(6)	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.
(7)	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 universities. 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, 2014, 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 2013‑2014 fiscal year and the sum of five million six hundred fifty thousand dollars ($5,650,000) for the 2014‑2015 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 scholarships for the 2013‑2014 academic year and five million dollars ($5,000,000) shall be used to provide scholarships for the 2014‑2015 academic year.
(2)	One hundred fifty thousand dollars ($150,000) for the 2013-2014 fiscal year and one hundred fifty thousand dollars ($150,000) for the 2014‑2015 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 2013-2014 fiscal year and two hundred fifty thousand dollars ($250,000) for the 2014‑2015 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, 2013.