This bill would amend Part 3 of Article 7 of Chapter 3 of Title 20 of the O.C.G.A. by adding a new subpart entitled “Pay as You Earn Education Program.” It includes a number of definitions that match common understanding to include “beginning date of a postsecondary course of study,” “cost of attendance,” “eligible high school,” “eligible postsecondary institution,” “first professional degree,” and “first professional degree program.” It would require all eligible public postsecondary institutions to participate and would make it optional for private institutions that provide notice to participate. Qualifications for a student to participate include:

1. Graduated from an eligible high school;

2. Accepted to a public postsecondary or participating private postsecondary instution;

3. Received bachelor’s degree from accredited college or university if a graduate student;

4. Never participated in the PAYE Program at another institution.

At least 1 percent of incoming freshman would have to include participants in the program with the institution determining any excess of that number. Participants would have to agree in writing to the provisions of the program, including agreeing to the repayment provisions. This is the payment plan:

1. Student pays $1,000.00 per year;

2. Participating institution pays remainder based on future earnings of the student for 15 years after graduation.

The institution would have to file an annual report regarding each student’s cost and credits toward such cost, including the $1,000.00. The remaining amount would compose the loan to the student. Remedial courses would not be eligible and would have to be completed prior to entering the program. Participating students would have to complete a bachelor’s degree in four years or first professional degree in five years.

Once the degree is bestowed, the student would then pay 3% of the annual adjusted gross income taken from federal income tax returns to the eligible institution. Those payments would continue for 15 years following receipt of the degree, unless the student takes advantage of a prepayment option that includes interest. If the student drops out, payment is due immediately.

Participating private institutions would be allowed a $1,000.00 tax credit for each student enrolled in the program. Funds paid by the student would be a permitted deduction from the student’s federal adjusted gross income for Georgia income taxes.

Students would not be allowed to participate if the student:

1. Is not a U.S. citizen or permanent resident alien;

2. Has not registered for U.S. Selective Service;

3. Is in default on a Title IV educational loan or State of Georgia educational loan;

4. Owes a refund on a Title IV or Georgia student financial aid program;

5. Has been convicted of a felony involving controlled substances;

6. Is incarcerated;

7. Does not meet all other qualifications outlined in the bill.