JUNEAU — State lawmakers are considering whether the state should cover up to $37,500 in student debt for Alaskans working in hard-to-fill jobs.
Rep. Craig Johnson, an Anchorage Republican, is pushing a bill that would help pay student loans owed by people working in professions where there are “severe shortages” of workers in the state.
An Alaska resident working in one of those professions — which would likely include health care, engineering and teaching — would qualify for up to $7,500 a year for five years.
The grant couldn’t be more than half the worker’s total student debt, and would only apply if the schooling was needed for the profession and if the person had already been working in the state for a year.
In a sponsor statement, Johnson pointed to existing problems finding qualified workers and wrote that the state’s growing economy and big projects on the horizon would only make the situation worse.
On Thursday, the House Health, Education, and Social Services Committee held a second hearing on the bill. The first was last May.
Peggy Wilson, a Republican from Wrangell and the committee’s chairwoman, expressed strong support for the bill in an interview before the hearing.
When she and her husband moved to Alaska 15 years ago, the higher wages in the state made the move attractive, she said.
“There was really something to lure us up here,” she said.
Since then, wages in Alaska have stayed relatively flat while they’ve increased in the Lower 48, she said.
The fiscal incentive in Johnson’s bill could help draw more people.
Wilson said she figured the loans would apply to certain teachers, language therapists, and “almost anybody” in the health care system — nurses, doctors, lab technicians, X-ray technicians, and so on.
The loan repayment program would be administered by the Alaska Commission on Postsecondary Education, an office within the state’s department of education.
A profession would qualify as having a “severe shortage” of trained workers if the department of labor or other entity determined the vacancy rate was 15 percent or more.
During the hearing, Jeanne Ostnes, a staff member for Johnson, said the program would help address two problems at once — the state’s workforce needs and the high cost of education.
It would also help reverse the “brain drain phenomenon” because it would provide an incentive for skilled workers to stay in the state or move up from elsewhere, she said.
The program would not discriminate based on where the worker went to school.
It’s unclear how much the program would cost the state, but Johnson’s idea is to fund it with earnings from a specially created, $100 million endowment fund. A separate bill establishing the fund is currently before the House Finance Committee.
Wilson hoped to move the bill in her committee on Thursday, but discussion during the hearing raised a number of questions and she ultimately held the bill over.
The underlying question was whether the program would do what Johnson hoped — attract new workers to places where they were needed.
Rep. Berta Gardner, an Anchorage Democrat, said it was likely that many nurses in training now would stay in the state anyway once they finished. By helping them pay off loans, would the state really be helping address worker shortages? she asked.
Rep. Paul Seaton, a Republican from Homer, questioned how the program would address regional shortages, such as teachers in rural Alaska. Right now the bill applies to statewide worker shortages.
Another question involved the extent to which the commission could promise that someone would qualify for the assistance if they moved to Alaska and worked in the profession for a year.
The committee ultimately removed a provision aimed at providing some certainty out of concern that it could make the commission liable if it promised something it couldn’t deliver.
After an hour of discussion and testimony, Gardner suggested another way of attracting workers.
“I think what we need to look at is increasing our pay scales across the board,” she said.
Wilson, before the hearing, had also suggested pay increases, saying she thought Alaska would have to increase teacher salaries “by a lot.”
Her reason for backing Johnson’s bill was strictly practical.
“This will pass and increasing pay won’t,” she said.
Gov. Sarah Palin last year formed a working group to study ways to improve recruitment and retention of state employees.
The bills are HB 234 and HB 235.
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