82R2185 KSD-D
By: Zaffirini S.B. No. 40
A BILL TO BE ENTITLED
AN ACT
relating to the functions of the Texas Guaranteed Student Loan
Corporation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 57.01 and 57.11, Education Code, are
amended to read as follows:
Sec. 57.01. DECLARATION OF POLICY. The legislature, giving
due consideration to the historical and continuing interest of the
people of the State of Texas in encouraging deserving and qualified
persons to realize their aspirations for education beyond high
school, finds and declares that postsecondary education for
qualified persons [those] who desire to pursue such [an] education
[and are properly qualified therefor] is important to the welfare
and security of this state and the nation and, consequently, is an
important public purpose. The legislature finds and declares that
the state can achieve its full economic and social potential only if
every individual has the opportunity to contribute to the full
extent of the individual's [his or her] capabilities and only when
financial barriers to the individual's [his or her] economic,
social, and educational goals are removed. It is, therefore, the
purpose of this chapter to establish the Texas Guaranteed Student
Loan Corporation to promote and improve the postsecondary
educational access and success of students in this state and the
nation by:
(1) administering [administer] a guaranteed student
loan program or any other student loan program the corporation is
authorized, qualified, or required by federal or other law to
administer in order to assist qualified [Texas] students in Texas
and across the nation in receiving a postsecondary education in
this state or elsewhere in the nation; and
(2) providing students and families, student loan
borrowers, educational institutions, and other entities both in
this state and nationally, on a fee-for-service basis when the
corporation determines appropriate, with [provide] necessary and
desirable information, products, tools, functions, and services
related to public and private student loan and student financial
aid programs [the loan program], including:
(A) support services relating to financial
literacy, student loan debt repayment considerations, student loan
default prevention, policy training, the effective and efficient
delivery of higher education student financial aid, and college
promotion outreach; and
(B) cooperative awareness efforts with
appropriate educational and civic associations designed to
disseminate postsecondary education awareness information,
including information regarding student financial aid, [and] the
Federal Family Education Loan Program and other student loan
programs, and other relevant topics [including the prevention of
student loan default].
Sec. 57.11. TEXAS GUARANTEED STUDENT LOAN CORPORATION. (a)
The Texas Guaranteed Student Loan Corporation is created to:
(1) administer any student loan program the
corporation is required, qualified, or authorized by federal or
other law to administer and to provide any related information,
products, tools, functions, and services in accordance with
applicable law, including the Federal Family Education Loan Program
and the Federal Direct Student Loan Program; and
(2) administer any other program or function [the
programs] authorized by this chapter and provide related services.
(b) The corporation is a public nonprofit corporation and,
except as otherwise provided in this chapter, has all the powers and
duties incident to a nonprofit corporation under Chapter 22,
Business Organizations Code [the Texas Non-Profit Corporation Act
(Article 1396-1.01 et seq., Vernon's Texas Civil Statutes)].
(c) [(b)] Except as otherwise provided by law, all expenses
of the corporation shall be paid from revenue [income] of the
corporation.
(d) [(c)] The corporation is subject to Chapters [Chapter]
551 and 552, Government Code.
(e) [(d)] Student loan borrower information collected,
assembled, or maintained by the corporation is confidential and is
not subject to disclosure under Chapter 552, Government Code.
SECTION 2. Section 57.1311(b), Education Code, is amended
to read as follows:
(b) The training program must provide the person with
information regarding:
(1) the provisions of this chapter and the
corporation's programs, functions, rules, and budget;
(2) the results of the most recent formal audit of the
corporation;
(3) the requirements of laws that primarily relate to
or affect the business of the corporation [relating to open
meetings, public information, and conflicts of interest]; and
(4) any applicable ethics policies adopted by the
corporation [or the Texas Ethics Commission].
SECTION 3. Section 57.18, Education Code, is amended by
adding Subsection (c) to read as follows:
(c) The board is not subject to Section 551.125, Government
Code. Notwithstanding any other provision of Chapter 551,
Government Code, any of the corporation's directors may attend any
board meeting by telephone conference call, provided that the
telephone conference is audible to the public at the meeting
location specified in the meeting's notice during each part of the
meeting that is required to be open to the public.
SECTION 4. Section 57.19(d), Education Code, is amended to
read as follows:
(d) The president or the president's designee shall develop
a [an intra-agency] career ladder program for the corporation. The
program shall require internal corporate [intra-agency] postings
of all nonentry level positions concurrently with any public
posting.
SECTION 5. Section 57.20(a), Education Code, is amended to
read as follows:
(a) The corporation shall appoint an ombudsman [maintain a
system] to promptly and efficiently act on complaints filed with
the corporation. The ombudsman [corporation] shall maintain
information about parties to the complaint, the subject matter of
the complaint, a summary of the results of the review or
investigation of the complaint, and its disposition.
SECTION 6. Sections 57.21(a) and (c), Education Code, are
amended to read as follows:
(a) The corporation shall take an active role in
coordinating, facilitating, promoting, and providing assistance
and support to:
(1) programs that focus on and disseminate [designed
to make available to the residents of this state] information
regarding [concerning] postsecondary education awareness and the
availability of student financial aid[, including the Federal
Family Education Loan Program,] and that [to] assist families in
obtaining [needed] postsecondary education financing;
(2) programs designed to assist students, families,
borrowers, and schools in preventing [prevent] student loan default
throughout the life of the loan, provided that such programs are
funded by statutory or regulatory mandate, compensation, grant,
contract, award, or other appropriate means; and
(3) programs designed to increase student retention
and graduation rates in postsecondary education.
(c) To the extent practicable, each [Each] state agency
that conducts higher education and financial aid outreach
activities shall enter into a memorandum of understanding with the
corporation. The memorandum of understanding may [must] outline
how the corporation and the state agency will coordinate outreach
activities to maximize resources and avoid duplication.
SECTION 7. The heading to Section 57.22, Education Code, is
amended to read as follows:
Sec. 57.22. APPLICATION OF BUSINESS ORGANIZATIONS CODE [THE
TEXAS NON-PROFIT CORPORATION ACT].
SECTION 8. Section 57.22(a), Education Code, is amended to
read as follows:
(a) The corporation is subject to Chapter 22, Business
Organizations Code [the Texas Non-Profit Corporation Act (Article
1396-1.01 et seq., Vernon's Texas Civil Statutes)], except that:
(1) the corporation may not make donations for the
public welfare or for charitable or scientific purposes or in aid of
war activities;
(2) the corporation is not required to file articles
of incorporation;
(3) the corporation is not subject to voluntary or
involuntary dissolution;
(4) the corporation may not be placed in receivership;
and
(5) the corporation is not required to make reports to
the secretary of state under Section 22.357, Business Organizations
Code [Article 9.01 of that Act].
SECTION 9. Section 57.24, Education Code, is amended to
read as follows:
Sec. 57.24. AUTHORITY TO PARTICIPATE IN OTHER
REVENUE-GENERATING ACTIVITIES; LIMITATIONS. (a) The corporation
may participate in a revenue-generating activity that is reasonably
aligned [consistent] with or that may further the corporation's
purposes or business if the board determines that the revenue from
the activity may:
(1) [is sufficient to] cover the costs of the
activity; and
(2) provide funds to support activities approved by
the board as the corporation's philanthropic activities or as
having strategic or positioning importance to the corporation [may
contribute to a reduction in the insurance premium paid by students
under Section 57.43 of this code].
(b) If[, under Subsection (a) of this section,] the board
authorizes the corporation to perform additional services under
Subsection (a), the corporation may not require postsecondary
educational institutions or students to use those services unless
required by state or federal law.
SECTION 10. Section 57.41(a), Education Code, is amended to
read as follows:
(a) The corporation shall serve as the designated guarantee
agency under the Federal Family Education Loan Program in
accordance with [loans made to eligible borrowers by eligible
lenders as provided by the federal guaranteed student loan program
under] the Higher Education Act of 1965, 20 U.S.C. Section [Sec.]
1001 et seq., as amended, regulations adopted under that act, and
other applicable federal law.
SECTION 11. Section 57.461, Education Code, is amended to
read as follows:
Sec. 57.461. [POSTSECONDARY EDUCATIONAL INSTITUTIONS AND
LENDER] ADVISORY COMMITTEES. [(a)] The corporation shall
establish advisory committees as the board considers appropriate [:
[(1) an advisory committee that is composed of 15
members who represent the postsecondary educational institutions
that participate in the corporation's guaranteed student loan
program; and
[(2) an advisory committee that is composed of 12
members including:
[(A) one member who represents the Texas Higher
Education Coordinating Board; and
[(B) 11 members who represent lenders that
participate in the corporation's guaranteed student loan program].
[(b) The board shall appoint advisory committee members on
the recommendation of the president.
[(c) The board may establish other advisory committees as
the board considers necessary.
[(d) The board shall:
[(1) specify each advisory committee's purpose and
duties; and
[(2) require each committee to report to the board in a
manner specified by the board relating to each committee's
activities and work results.]
SECTION 12. Sections 57.47(a), (b), and (d), Education
Code, are amended to read as follows:
(a) If a student borrower defaults on a loan and the
corporation is required to honor the guarantee, the corporation may
[or the Texas Higher Education Coordinating Board shall] bring suit
against the defaulting party in accordance with the requirements of
the Higher Education Act of 1965, 20 U.S.C. Section [Sec.] 1001 et
seq., as amended.
(b) A suit against a defaulting party under this section may
be brought in the county in which the defaulting person resides, in
which the lender is located, or in Travis or Williamson County.
(d) Notwithstanding any other law, if the corporation [or
the Texas Higher Education Coordinating Board] brings suit against
a defaulting party under this section, the corporation [or the
coordinating board, as appropriate,] shall pay 50 percent of the
filing fee or other costs of court taxed and collected in advance
that are in effect on the date on which the suit is filed. If the
defaulting borrower prevails in the suit filed under this section,
the corporation [or the coordinating board, as appropriate,] shall
pay the remaining 50 percent of the statutory filing fee on the date
of the final disposition of the suit. If the corporation [or
coordinating board] prevails in the suit:
(1) the judgment shall find the defaulting borrower
liable to the corporation [or the coordinating board, as
appropriate,] for the amount of the filing fee; and
(2) the corporation [or coordinating board, as
appropriate,] shall pay the remaining 50 percent of the statutory
filing fee not later than one week after the date on which the
defaulting borrower pays to the corporation [or coordinating board,
as appropriate,] the full amount, including the filing fee, for
which the borrower is liable to the corporation [or coordinating
board].
SECTION 13. Section 57.48(a), Education Code, is amended to
read as follows:
(a) Except as provided by Subsection (g), the corporation
shall report to the comptroller the name of any person who is in
default on a loan guaranteed or administered under this chapter.
The report must contain the information and be submitted in the
manner and with the frequency required by rules of the comptroller.
SECTION 14. Sections 57.481(a), (b), and (c), Education
Code, are amended to read as follows:
(a) [In this section, "loan default rate" means the rate at
which student borrowers default on loans guaranteed by the
corporation as determined by the corporation in compliance with
federal guidelines.
[(b)] The corporation shall take a comprehensive and [an]
active role in coordinating, facilitating, and providing technical
assistance on guaranteed student loan default prevention and
reduction initiatives and programs that promote responsible
borrowing, financial literacy, debt management, research, and
informed policymaking [in the state] and shall work with the
appropriate state agencies and other entities inside and outside
this state, including eligible postsecondary educational
institutions, eligible lenders, servicers, secondary markets, the
Texas Higher Education Coordinating Board, the Texas [Central]
Education Agency, [and] state professional and occupational
licensing agencies, and the United States Department of Education.
(b) [(c)] The corporation shall maintain a system of
communication among the appropriate state agencies and entities to
address student [reduce] loan default prevention issues [claims].
SECTION 15. Section 57.49, Education Code, is amended to
read as follows:
Sec. 57.49. COOPERATION OF STATE AGENCIES AND SUBDIVISIONS.
Each agency and political subdivision of the state shall cooperate
with the corporation in providing information to the agency's or
political subdivision's clients concerning student financial aid,
including information about delinquency, default prevention, and
life-of-loan issues. Each agency and political subdivision shall
provide information to the corporation on request to assist the
corporation in curing delinquent loans, [and] collecting defaulted
loans, and developing information and reports concerning
responsible borrowing.
SECTION 16. Sections 57.50, 57.71, and 57.78, Education
Code, are amended to read as follows:
Sec. 57.50. NONDISCRIMINATION. Neither the corporation nor
an eligible lender may discriminate against an eligible student in
making a loan or loan guarantee on the basis of race, age, religion,
or sex or any other basis prohibited by applicable law.
Sec. 57.71. RESERVE AND OPERATING FUNDS. The corporation
shall establish reserve and operating funds in accordance with
Sections [Section] 422, 422A, and 422B of the Higher Education Act
of 1965 (20 U.S.C. Sections [Section] 1072, 1072a, and 1072b), as
amended.
Sec. 57.78. INVESTMENTS. The reserve and operating funds
established by the corporation under Section 57.71 shall [All money
of the corporation may] be invested in accordance with Sections
422A and 422B of the Higher Education Act of 1965 (20 U.S.C.
Sections 1072a and 1072b), as amended, or other applicable federal
law [Chapter 2256, Government Code].
SECTION 17. The following laws are repealed:
(1) Sections 57.19(g) and (h), Education Code;
(2) Sections 57.41(b), (c), and (d), Education Code;
(3) Section 57.42, Education Code;
(4) Section 57.43, Education Code;
(5) Section 57.44, Education Code;
(6) Section 57.45, Education Code;
(7) Section 57.46, Education Code; and
(8) Sections 57.481(d), (e), (f), (g), and (h),
Education Code.
SECTION 18. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2011.