OLYMPIA — Washington must develop a state student loan program for residents under a bill signed by Gov. Jay Inslee on Wednesday.
The new law requires the Washington Student Achievement Council, along with the Office of the State Treasurer and the State Investment Board, to develop a program that will issue student loans with interest rates of 1% or lower to resident students with financial need who are pursuing an undergraduate or graduate degree. Loans will start being awarded in the 2024-2025 academic year.
The low interest rates will provide a "more affordable financial aid option" to students in Washington, Inslee said Wednesday.
According to the bill, a report must be given to the Legislature on the implementation plan for the program by Dec. 1. The budget passed this year sets aside $150 million beginning in 2023 for the council to begin work setting up the program, but Inslee said Wednesday a technical error in the supplemental budget means work won't be able to begin this year. He said he hopes there will be a fix in the 2023-2025 budget cycle.
The program must prioritize low-income borrowers, according to the bill.
Funds for the program cannot be given out unless the program design shows it to be self-sustaining and interest rates do not exceed 1%.
The bill was one of the last passed in the Legislature during the final moments of the session that ended March 10. On final passage, it made it through the House 57-40 and through the Senate 27-21.
"We have a student loan crisis in the state of Washington. We have a student loan crisis across the country," prime sponsor Rep. Pat Sullivan, D-Covington, said on the floor. "This will provide relief for thousands of students."
