| 1 | 1 | | By: West, et al. S.B. No. 680 |
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| 2 | 2 | | (Patrick) |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to a pilot program to improve student loan default rates |
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| 8 | 8 | | and financial aid literacy among postsecondary students. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter C, Chapter 61, Education Code, is |
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| 11 | 11 | | amended by adding Section 61.0763 to read as follows: |
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| 12 | 12 | | Sec. 61.0763. STUDENT LOAN DEFAULT PREVENTION AND FINANCIAL |
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| 13 | 13 | | AID LITERACY PILOT PROGRAM. (a) In this section, "career school |
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| 14 | 14 | | or college" has the meaning assigned by Section 132.001. |
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| 15 | 15 | | (b) Not later than January 1, 2014, the board shall |
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| 16 | 16 | | establish and administer a pilot program at selected postsecondary |
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| 17 | 17 | | educational institutions to ensure that students of those |
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| 18 | 18 | | institutions are informed consumers with regard to all aspects of |
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| 19 | 19 | | student financial aid, including: |
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| 20 | 20 | | (1) the consequences of borrowing to finance a |
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| 21 | 21 | | student's postsecondary education; |
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| 22 | 22 | | (2) the financial consequences of a student's academic |
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| 23 | 23 | | and career choices; and |
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| 24 | 24 | | (3) strategies for avoiding student loan delinquency |
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| 25 | 25 | | and default. |
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| 26 | 26 | | (c) The board shall select at least one institution from |
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| 27 | 27 | | each of the following categories of postsecondary educational |
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| 28 | 28 | | institutions to participate in the program: |
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| 29 | 29 | | (1) general academic teaching institutions; |
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| 30 | 30 | | (2) public junior colleges; |
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| 31 | 31 | | (3) private or independent institutions of higher |
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| 32 | 32 | | education; and |
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| 33 | 33 | | (4) career schools or colleges. |
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| 34 | 34 | | (d) In selecting postsecondary educational institutions to |
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| 35 | 35 | | participate in the pilot program, the board shall give priority to |
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| 36 | 36 | | institutions that have a three-year cohort student loan default |
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| 37 | 37 | | rate, as reported by the United States Department of Education: |
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| 38 | 38 | | (1) of more than 20 percent; or |
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| 39 | 39 | | (2) that has above average growth as compared to the |
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| 40 | 40 | | rates of other postsecondary educational institutions in this |
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| 41 | 41 | | state. |
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| 42 | 42 | | (e) The board, in consultation with postsecondary |
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| 43 | 43 | | educational institutions, shall adopt rules for the administration |
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| 44 | 44 | | of the pilot program, including rules governing the selection of |
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| 45 | 45 | | postsecondary educational institutions to participate in the pilot |
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| 46 | 46 | | program consistent with the requirements of Subsection (d). |
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| 47 | 47 | | (f) The board may contract with one or more entities to |
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| 48 | 48 | | administer the pilot program according to criteria established by |
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| 49 | 49 | | board rule. |
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| 50 | 50 | | (g) Not later than January 1 of each year, beginning in |
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| 51 | 51 | | 2016: |
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| 52 | 52 | | (1) the board shall submit a report to the governor, |
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| 53 | 53 | | the lieutenant governor, and the speaker of the house of |
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| 54 | 54 | | representatives regarding the outcomes of the pilot program, as |
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| 55 | 55 | | reflected in the federal student loan default rates reported for |
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| 56 | 56 | | the participating institutions; and |
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| 57 | 57 | | (2) each participating institution shall submit a |
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| 58 | 58 | | report to the governor, the lieutenant governor, and the speaker of |
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| 59 | 59 | | the house of representatives regarding the outcomes of the pilot |
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| 60 | 60 | | program at the institution, as reflected in the federal student |
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| 61 | 61 | | loan default rate reported for the institution. |
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| 62 | 62 | | (h) This section expires December 31, 2020. |
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| 63 | 63 | | SECTION 2. The Texas Higher Education Coordinating Board |
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| 64 | 64 | | shall adopt rules for the administration of Section 61.0763, |
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| 65 | 65 | | Education Code, as added by this Act, as soon as practicable after |
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| 66 | 66 | | this Act takes effect. For that purpose, the coordinating board may |
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| 67 | 67 | | adopt the initial rules in the manner provided by law for emergency |
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| 68 | 68 | | rules. |
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| 69 | 69 | | SECTION 3. This Act takes effect immediately if it receives |
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| 70 | 70 | | a vote of two-thirds of all the members elected to each house, as |
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| 71 | 71 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 72 | 72 | | Act does not receive the vote necessary for immediate effect, this |
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| 73 | 73 | | Act takes effect September 1, 2013. |
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