BILL ANALYSIS H.B. 1157 By: Hunter (Luna) Education 04-06-95 Senate Committee Report (Unamended) BACKGROUND The Texas Guaranteed Student Loan Corporation (TGSLC) was created to serve the postsecondary educational needs of Texas families. Since 1981, the TGSLC has guaranteed over 1.5 million student loans approximating $6 billion. The repayment on these loans is 80 percent. This service is carried at no cost or liability to the State of Texas. Change in the administration of the publicly-funded Federal District Student Loan Program and the privately-funded Federal Family Educational Loan Program (FFELP) require amending current law to permit the TGSLC the flexibility to work with the federal government in assuming the activities of guarantors which choose, or are directed, to leave the FFELP. PURPOSE As proposed, H.B. 1157 amends current law to permit the Texas Guaranteed Student Loan Corporation to work with the federal government in assuming the activities of certain guarantors while allowing the corporation to continue its primary mission of serving postsecondary education financing needs of Texas families. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 57.22, Education Code, by deleting existing Subsection (3) which prohibits the Texas Guaranteed Student Loan Corporation (corporation) from merging or consolidating with another corporation. (3)-(5) Redesignate existing Subdivisions (4)-(6). SECTION 2. Amends Section 57.24, Education Code, by deleting existing Subsection (c), which prohibits the corporation from guaranteeing loans for other states. SECTION 3. Amends Section 57.761, Education Code, as follows: Sec. 57.761. INTERNAL AUDITOR (a) Requires the president to appoint an internal auditor for the corporation. Requires the appointment to be approved by the board of directors of the corporation. (b) Makes conforming changes. (c) Requires the board or a board committee, as designated by the board, rather than the board's executive committee, to meet with the internal auditor on a regular basis. (d) Makes no changes. SECTION 4. Effective date: September 1, 1995. SECTION 5. Emergency clause.