Governor Steve Beshear today joined lawmakers and state officials to ceremonially sign into law House Bill 362, which creates the Asset Resolution Corporation (ARC) that will allow the state to generate new revenue to further support student aid programs at no extra cost.
The legislation was co-sponsored by Rep. Rita Smart, of Richmond, and Rep. Sara Beth Gregory, of Monticello, and becomes law July 12.
ARC was created to replace lost revenue once generated by the Federal Family Education Loan Program that ended in July 2010. ARC will collect and service defaulted education loans for the U.S. Department of Education in all 50 states.
Revenue generated will support the Kentucky Higher Education Student Loan Corporation (KHESLC) that oversees ARC and its sister agency, the Kentucky Higher Education Assistance Authority (KHEAA).
KHEAA is the state agency that provides college outreach programs and administers Kentucky's student aid programs, including the Kentucky Educational Excellence Scholarship (KEES).
"KHEAA and KHESLC are self-supporting entities that reinvest their revenues in Kentucky students," said Gov. Beshear. "This legislation will allow the agencies to continue the good work they do in promoting access to higher education and administering state student financial aid at no cost to the state."
"The new revenue from the Asset Resolution Corporation will allow KHEAA and KHESLC to fulfill the public mission of outreach and service to Kentucky students," said Rep. Smart. "This tool will allow many to students to obtain their dream of getting a college degree."
KHESLC has long had the statutory authority to collect education loans for others. "The opportunity to collect Direct Loans for the U.S. Department of Education is a natural extension of our existing skill set," said Robin Morley, interim executive director and CEO. "We are grateful to lawmakers and Gov. Beshear for allowing us to forge ahead on these new lines of revenue."
ARC will be governed by the same board as KHEAA and KHESLC, and revenue generated will be used to fulfill the agencies' public-purpose mission.