Voting Yes on Ballot Measure 2 is a no-cost option to the State that will save Alaskans their hard earned money by providing a tool to reduce interest rates for students.
Currently, the Alaska Student Loan Corporation (ASLC) issues Revenue Bonds that are solely backed by the loan repayment revenue from those who are borrowing. Ballot Measure 2 will change the Alaska Constitution to allow for General Obligation (GO) bonding for the purpose of postsecondary education. If passed, it will be the most viable option available to Alaskans to obtain lower interest rates by allowing the State to access bonds using its good credit. These lower rates will then be passed on to Alaskan borrowers who are preparing to enter the workforce and contribute to a healthy Alaska economy. In addition to achieving lower interest rates, the state’s backing can make the loans available to a broader population of student borrowers.
Each year many Alaskans contact me regarding their student loan debt – the high interest rates and their struggle or even inability to repay the debt. In late 2013, I contacted and began working with the Alaska Commission on Postsecondary Education, the state agency responsible for funding and servicing state education loans, to address these concerns. My goal was to identify fiscally responsible ways to make postsecondary education more affordable for Alaskans, and provide relief to those who are currently in repayment.
Over the course of the next 10 days many of you will enter the voting booth, cast your ballot and make your voice heard. I’d like to provide an outline of the benefits of Ballot Measure 2.
The language of the ballot measure states the amendment would “expand the State’s authority to incur debt…” which I believe may lead to misconceptions about what this measure does. As the co-chair of the Senate Finance Committee, I firmly believe the state must look closely at any additional debt we take on as we face a multi-billion dollar budget deficit. However, while the State would be guaranteeing this debt, it would be repaid by students from the revenue of the ASLC.
The ASLC has been issuing bonds and repaying them for almost three decades and in that time, has never had to come to the State for financial assistance to repay its debt. I was able to support this proposal without reservation based on the fact it is anticipated to have zero impact on the state budget.
Passage of Ballot Measure 2 is simply accessing a financing option available to the ASLC that will reduce the cost of student loan interest rates. By law, there are safeguards that place limitations on the bonding process and Ballot Measure 2 does not approve any new debt for the State of Alaska. I urge my fellow Alaskans to join me in voting Yes on Ballot Measure 2.
Senator Anna MacKinnon represents District G in the Alaska State Senate and serves as co-chair of the Senate Finance Committee.