AN ACT SUPPORTING GRADUATE STUDENTS IN THE STATE.

Senate
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General Assembly File No. 3
February Session, 2026 Substitute Senate Bill No. 8

Senate, March 9, 2026

The Committee on Higher Education and Employment
Advancement reported through SEN. SLAP of the 5th Dist.,
Chairperson of the Committee on the part of the Senate, that the
substitute bill ought to pass.

AN ACT SUPPORTING GRADUATE STUDENTS IN THE STATE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. (NEW) (Effective July 1, 2026) (a) As used in this section: 1
(1) "Authority loans" has the same meaning as provided in section 2
10a-223 of the general statutes; and 3
(2) "Eligible graduate program" means an advanced academic or 4
professional degree program, as designated by the Connecticut Higher 5
Education Supplemental Loan Authority, that requires completion of a 6
bachelor's degree as a prerequisite to enrollment. 7
(b) On and after July 1, 2026, the Connecticut Higher Education 8
Supplemental Loan Authority shall establish, subject to available 9
funding pursuant to subsection (d) of this section, a Supplemental 10
Graduate Student Loan Program for the purpose of providing authority 11
loans to any student enrolled in an eligible graduate program who 12
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meets the eligibility criteria established by the authority. 13
(c) The Connecticut Higher Education Supplemental Loan Authority 14
shall establish the eligibility criteria and administrative guidelines for 15
the Supplemental Graduate Student Loan Program in accordance with 16
the written procedures adopted pursuant to subdivision (6) of 17
subsection (f) of section 10a-224 of the general statutes. 18
(d) The Connecticut Higher Education Supplemental Loan Authority 19
shall maintain a separate, nonlapsing account to hold funds for the 20
Supplemental Graduate Student Loan Program. The account shall 21
contain any moneys required by law to be deposited in the account, 22
including, but not limited to, any state appropriation or the proceeds 23
from the sale of bonds issued for the purpose of the program. Moneys 24
in the account shall be used for (1) reasonable and necessary expenses 25
for the administration of the Supplemental Graduate Student Loan 26
Program, and (2) the issuance of authority loans for said program. 27
Sec. 2. ( Effective July 1, 2026 ) (a) For the purposes described in 28
subsection (b) of this section, the State Bond Commission shall have the 29
power from time to time to authorize the issuance of bonds of the state 30
in one or more series and in principal amounts not exceeding in the 31
aggregate thirty million dollars, provided twenty million dollars of said 32
authorization shall be effective July 1, 2027. 33
(b) The proceeds of the sale of such bonds, to the extent of the amount 34
stated in subsection (a) of this section, shall be used by the Connecticut 35
Higher Education Supplemental Loan Authority for the purpose of the 36
Supplemental Graduate Student Loan Program established pursuant to 37
section 1 of this act. 38
(c) All provisions of section 3-20 of the general statutes, or the exercise 39
of any right or power granted thereby, that are not inconsistent with the 40
provisions of this section are hereby adopted and shall apply to all 41
bonds authorized by the State Bond Commission pursuant to this 42
section. Temporary notes in anticipation of the money to be derived 43
from the sale of any such bonds so authorized may be issued in 44
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accordance with section 3 -20 of the general statutes and from time to 45
time renewed. Such bonds shall mature at such time or times not 46
exceeding twenty years from their respective dates as may be provided 47
in or pursuant to the resolution or resolutions of the State Bond 48
Commission authorizing such bonds. None of such bonds shall be 49
authorized except upon a finding by the State Bond Commission that 50
there has been filed with it a request for such authorization that is signed 51
by or on behalf of the Secretary of the Office of Policy and Management 52
and states such terms and conditions as said commission, in its 53
discretion, may require. Such bonds issued pursuant to this section shall 54
be general obligations of the state and the full faith and credit of the state 55
of Connecticut are pledged for the payment of the principal of and 56
interest on such bonds as the same become due, and accordingly and as 57
part of the contract of the state with the holders of such bonds, 58
appropriation of all amounts necessary for punctual payment of such 59
principal and interest is hereby made, and the State Treasurer shall pay 60
such principal and interest as the same become due. 61
Sec. 3. Subdivision (2) of subsection (a) of section 32-141 of the general 62
statutes is repealed and the following is substituted in lieu thereof 63
(Effective July 1, 2026): 64
(2) The total amount of private activity bonds which may be issued 65
by state issuers in the calendar year commencing January 1, 2007, and 66
each calendar year thereafter, under the state ceiling in effect for each 67
such year, shall be allocated as follows: (A) Sixty per cent to the 68
Connecticut Housing Finance Authority; (B) twelve and one -half per 69
cent to Connecticut Innovations, Incorporated; and (C) twenty -seven 70
and one -half per cent to municipalities and political subdivisions, 71
departments, agencies, authorities and other bodies of municipalities, 72
the Connecticut Higher Education Supplemental Loan Authority and 73
the Connecticut Green Bank, then to the Connecticut Student Loan 74
Foundation and then for contingencies , provided not less than sixty 75
million dollars of such bonds shall be allocated to the Connecticut 76
Higher Education Supplemental Loan Authority. At least ten per cent of 77
bonds allocated under subparagraph (A) of this subdivision shall be 78
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used for multifamily residential housing in the calendar year 79
commencing January 1, 2008. In each calendar year commencing 80
January 1, 2009, fifteen per cent of such bonds shall be used for 81
multifamily residential housing. 82
Sec. 4. Section 10a-232 of the 2026 supplement to the general statutes 83
is repealed and the following is substituted in lieu thereof (Effective July 84
1, 2026): 85
(a) Revenue bonds or notes issued under the provisions of this 86
chapter shall not be deemed to constitute a debt or liability of the state 87
or of any political subdivision thereof or a pledge of the full faith and 88
credit of the state or of any such political subdivision, but shall be 89
payable solely from the revenues and funds herein provided therefor. 90
All such revenue bonds or notes shall contain on the face thereof a 91
statement to the effect that: (1) The state of Connecticut shall not be 92
obligated to pay the same or the interest thereon and (2) the authority 93
shall not be obligated to pay the same or the interest thereon except from 94
revenues of the education loan program or programs or the portion 95
thereof for which they are issued, and that neither the full faith and 96
credit nor the taxing power of the state of Connecticut or of any political 97
subdivision thereof is pledged to the payment of the principal of or the 98
interest on such bonds or notes. 99
(b) Notwithstanding the foregoing, (1) the constituent units of the 100
state system of higher education may participate in one or more 101
education loan programs with the authority and may incur 102
indebtedness pursuant to authority loans, and (2) the authority may 103
create and establish one or more reserve funds to be known as special 104
capital reserve funds and may fund such special capital reserve funds 105
with (A) any moneys appropriated and made available by the state for 106
the purposes of such funds, (B) any proceeds of the sale of notes or 107
bonds, to the extent provided in the resolution of the authority 108
authorizing the issuance thereof, (C) any other moneys that may be 109
made available to the authority for the purpose of such funds from any 110
other source or sources, and (D) any surety policy or other similar 111
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instrument valued at par and payable or available to be drawn upon on 112
or before any date by which debt service on the bonds secured thereby 113
is required to be paid and issued by a financial institution that, at the 114
time of issuance of such surety policy or similar instrument, is rated 115
"AA" or better by any nationally recognized statistical rating 116
organization and approved by the State Treasurer. The assets held in or 117
credited to any special capital reserve fund established under this 118
section, except as hereinafter provided, shall be used solely for the 119
payment of the principal of notes and bonds of the authority secured by 120
such capital reserve fund as the same become due, the purchase of such 121
notes and bonds of the authority, the payment of interest on such notes 122
and bonds of the authority or the payment of any redemption premium 123
required to be paid when such bonds are redeemed prior to maturity or 124
released by the authority; provided, the authority shall have power to 125
require that moneys in any such fund shall not be withdrawn therefrom 126
at any time in such amount as would reduce the amount of such funds 127
to less than the maximum amount of principal and interest becoming 128
due by reason of maturity or a required sinking fund installment in any 129
succeeding calendar year on the bonds of the authority then outstanding 130
and secured by such special capital reserve fund, or such lesser amount 131
specified by the authority in its resolution authorizing the issuance of 132
any such bonds, such amount being herein referred to as the "required 133
minimum capital reserve", except for the purpose of paying such 134
principal of, redemption premium and interest on such bonds of the 135
authority secured by such special capital reserve becoming due and for 136
the payment of which other moneys of the authority are not available. 137
The authority may provide that it shall not issue bonds at any time if the 138
required minimum capital reserve on outstanding bonds secured by a 139
special capital reserve fund and the bonds then to be issued and secured 140
by a special capital reserve fund will exceed the amount of such special 141
capital reserve fund at the time of issuance, unless the authority, at the 142
time of the issuance of such bonds, shall deposit in such special capital 143
reserve fund from the proceeds of the bonds so to be issued, or 144
otherwise, an amount which, together with the amount then in such 145
special capital reserve fund, will be not less than the required minimum 146
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capital reserve. The authority may, as part of the contract of the 147
authority with the owners of such bonds, provide that on or before 148
December first, annually, there is deemed to be appropriated from the 149
state General Fund such sums, if any, as shall be certified by the 150
chairman of the authority to the Secretary of the Office of Policy and 151
Management and the Treasurer of the state, as necessary to restore each 152
such special capital reserve fund to the amount equal to the required 153
minimum capital reserve of such fund, and such amounts shall be 154
allotted and paid to the authority. For the purpose of evaluation of any 155
such special capital reserve fund, obligations acquired as an investment 156
for any such fund shall be valued at amortized cost. Nothing contained 157
in this section shall preclude the authority from establishing and 158
creating other debt service reserve funds in connection with the issuance 159
of bonds or notes of the authority. Subject to any agreement or 160
agreements with owners of outstanding notes and bonds of the 161
authority, any amount or amounts allotted and paid to the authority 162
pursuant to this section shall be repaid to the state from moneys of the 163
authority at such time as such moneys are not required for any other of 164
its corporate purposes and in any event shall be repaid to the state on 165
the date one year after all bonds and notes of the authority theretofore 166
issued on the date or dates such amount or amounts are allotted and 167
paid to the authority or thereafter issued, together with interest on such 168
bonds and notes, with interest on any unpaid installments of interest 169
and all costs and expenses in connection with any action or proceeding 170
by or on behalf of the owners thereof, are fully met and discharged. 171
Notwithstanding any other provisions contained in this chapter, the 172
aggregate amount of bonds outstanding at any time secured by such 173
special capital reserve funds authorized to be created and established by 174
this section shall not exceed [three] seven hundred fifty million dollars 175
and no such bonds shall be issued to pay program costs unless the 176
authority is of the opinion and determines that the revenues to be 177
derived from the program shall be sufficient (i) to pay the principal of 178
and interest on the bonds issued to finance the program, (ii) to establish, 179
increase and maintain any reserves deemed by the authority to be 180
advisable to secure the payment of the principal of and interest on such 181
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bonds, (iii) to pay the cost of maintaining and servicing the program and 182
keeping it properly insured, and (iv) to pay such other costs of the 183
program as may be required. 184
This act shall take effect as follows and shall amend the following
sections:

Section 1 July 1, 2026 New section
Sec. 2 July 1, 2026 New section
Sec. 3 July 1, 2026 32-141(a)(2)
Sec. 4 July 1, 2026 10a-232

HED Joint Favorable Subst.

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The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:
Agency Affected Fund-Effect FY 27 $ Out Years $
Treasurer, Debt Serv. GF - Cost None See Below
Note: GF=General Fund

Municipal Impact: None
Explanation
The bill authorizes $30 million in General Obligation bonds ($10
million in FY 27, $20 million in FY 28) for the Supplemental Graduate
Student Loan Program, to be administered by the Connecticut Higher
Education Supplemental Loan Authority (CHESLA). To the extent
bonds are fully allocated and expended, total debt service is expected to
be approximately $45.8 million over the 20-year duration of the bonds.
Additionally, the bill increases CHESLA's special capital reserve fund
(SCRF) bond authorization from $ 300 million to $ 750 million. To the
extent that additional bonds are issued, there is a potential minimal
impact to the state’s debt service going forward through the life of any
bonds issued. As of February 2025 , CHESLA had outstanding SCRF -
backed debt of $145.4 million.1
In order to issue SCRF -backed bonds, CHESLA must get approval
from the State Treasurer. The State Treasurer is not expected to approve
the issuance of SCRF -backed bonds unless CHESLA can show that it
will be able to generate sufficient revenue from its activities to pay the

1 Source: September 2025 General Obligation Bonds Official Statement
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debt service on the bonds.
Background
SCRF-backed bonds are a contingent liability of the state.2 The SCRF
provides a higher level of repayment security, which results in a lower
rate of interest on the bond issuance than the relevant market rate. In the
event that the SCRF is drawn down in part or completely, a draw on the
General Fund is authorized and the SCRF is fully restored. The draw on
the General Fund is deemed to be appropriated and is not subject to the
constitutional or statutory appropriations cap. If draws on a SCRF
continue, the annual draws on the General Fund required to refill it also
continue until the fund is replenished by the bond issuer or the
underlying debt is repaid.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the terms of any bonds issued.

2 Contingent liabilities do not count against the state’s statutory limits on General
Obligation bonds.
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OLR Bill Analysis
sSB 8

AN ACT SUPPORTING GRADUATE STUDENTS IN THE STATE.

SUMMARY
Starting July 1, 2026, t his bill requires the Connecticut Higher
Education Supplemental Loan Authority (CHESLA) to create, subject to
available funding, a Supplemental Graduate Student Loan Program to
provide loans to graduate students. It also:
1. authorizes $30 million in state general obligation bonds for the
program ($10 million in FY 27 and $20 million in FY 28);
2. carves out at least $60 million from the state’s private activity
bond cap for CHESLA; and
3. increases, from $300 million to $750 million, the maximum
amount of CHESLA’s bonds backed by a special capital reserve
fund (SCRF) that can be outstanding at any time.
EFFECTIVE DATE: July 1, 2026
SUPPLEMENTAL GRADUATE STUDENT LOAN PROGRAM
The bill makes Supplemental Graduate Student Loan Program loans
available to students in or from the state who are in CHESLA -
designated advanced academic or professional degree programs that
require a bachelor’s degree prior to enrollment. The bill requires
CHESLA to adopt eligibility criteria and administrative guidelines for
the new loan program under its board of directors’ existing authority to
adopt written procedures for CHESLA’s loans.
The bill requires CHESLA to have a separate, nonlapsing program
account to contain program funds, including appropriations and bond
proceeds. The account must be used to issue loans and for the program’s
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reasonable and necessary administrative expenses.
PRIVATE ACTIVITY BOND CAP
Generally, pr ivate activity bonds are bonds issued by quasi -public
authorities (such as CHESLA) or municipalities that are not a state
obligation because the quasi -public authority or municipality pays the
bond’s debt service out of a dedicated revenue stream. These bonds
would normally be taxable except when they are used to finance projects
that serve a significant public benefit, such as housing, economic
development, student loans, and energy conservation. The federal
government classifies a bond as pri vate activity if more than 10% of its
proceeds are used by a private party ( such as a quasi-public authority)
and more than 10% of the debt service is backed by private resources.
A federal formula caps each state’s annual private activity bonding
capacity and for 2026 Connecticut’s cap is about $498 million.
Current law allocates the state’s cap as follows:
1. 60% for the Connecticut Housing Finance Authority;
2. 12.5% for Connecticut Innovations, Incorporated; and
3. 27.5% for CHESLA, municipalities, and the Connecticut Green
Bank, and then for the Connecticut Student Loan Foundation and
then for contingencies.
The bill requires allocating to CHESLA at least $60 million out of the
27.5% portion of the cap that it shares with others.
By law, t he State Bond Commission can change an allocation
described above during a calendar year when it is in the state’s best
interest and the General Assembly is not in session (CGS § 32-142).
MAXIMUM AMOUNT OF CHESLA’S OUTSTANDING SCRF-BACKED
BONDS
The law authorizes CHESLA to create SCRFs that contain assets (such
as state appropriations, bond proceeds, and surety policies) that can be
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used to pay bondholders. The bill increases, from $300 million to $750
million, the maximum amount of CHESLA’s bonds that are backed by
a SCRF that may be outstanding at any time.
COMMITTEE ACTION
Higher Education and Employment Advancement Committee
Joint Favorable Substitute
Yea 18 Nay 0 (02/24/2026)