By: West, et al. S.B. No. 680
(Patrick)
A BILL TO BE ENTITLED
AN ACT
relating to a pilot program to improve student loan default rates
and financial aid literacy among postsecondary students.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 61, Education Code, is
amended by adding Section 61.0763 to read as follows:
Sec. 61.0763. STUDENT LOAN DEFAULT PREVENTION AND FINANCIAL
AID LITERACY PILOT PROGRAM. (a) In this section, "career school
or college" has the meaning assigned by Section 132.001.
(b) Not later than January 1, 2014, the board shall
establish and administer a pilot program at selected postsecondary
educational institutions to ensure that students of those
institutions are informed consumers with regard to all aspects of
student financial aid, including:
(1) the consequences of borrowing to finance a
student's postsecondary education;
(2) the financial consequences of a student's academic
and career choices; and
(3) strategies for avoiding student loan delinquency
and default.
(c) The board shall select at least one institution from
each of the following categories of postsecondary educational
institutions to participate in the program:
(1) general academic teaching institutions;
(2) public junior colleges;
(3) private or independent institutions of higher
education; and
(4) career schools or colleges.
(d) In selecting postsecondary educational institutions to
participate in the pilot program, the board shall give priority to
institutions that have a three-year cohort student loan default
rate, as reported by the United States Department of Education:
(1) of more than 20 percent; or
(2) that has above average growth as compared to the
rates of other postsecondary educational institutions in this
state.
(e) The board, in consultation with postsecondary
educational institutions, shall adopt rules for the administration
of the pilot program, including rules governing the selection of
postsecondary educational institutions to participate in the pilot
program consistent with the requirements of Subsection (d).
(f) The board may contract with one or more entities to
administer the pilot program according to criteria established by
board rule.
(g) Not later than January 1 of each year, beginning in
2016:
(1) the board shall submit a report to the governor,
the lieutenant governor, and the speaker of the house of
representatives regarding the outcomes of the pilot program, as
reflected in the federal student loan default rates reported for
the participating institutions; and
(2) each participating institution shall submit a
report to the governor, the lieutenant governor, and the speaker of
the house of representatives regarding the outcomes of the pilot
program at the institution, as reflected in the federal student
loan default rate reported for the institution.
(h) This section expires December 31, 2020.
SECTION 2. The Texas Higher Education Coordinating Board
shall adopt rules for the administration of Section 61.0763,
Education Code, as added by this Act, as soon as practicable after
this Act takes effect. For that purpose, the coordinating board may
adopt the initial rules in the manner provided by law for emergency
rules.
SECTION 3. 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, 2013.