BILL ANALYSIS



C.S.H.B. 1697
By: Maxey
02-28-95
Committee Report (Substituted)


BACKGROUND

The Texas Guaranteed Student Loan Corporation (TGSLC) was
established in 1979 to administer federal higher education loan
programs.  In Texas, TGSLC guarantees more than 85 percent of all
student loans.

The default rate for loans backed by the Texas Guaranteed Student
Loan Corporation (TGSLC) is 23 percent for all borrowers.  However,
the default rate was 46 percent in January 1994 for students who
attended private trade schools, also known as proprietary schools. 
In many cases, these students default on their loans because they
cannot get a job in the field for which they were trained. 
Beginning in 1995, the state will have to pay a fee to the federal
government based on its number of schools with default rates
exceeding 20 percent.

This legislation will provide Texas students with more information
on the performance of postsecondary institutions.  


PURPOSE

H.B. 1697, as substituted provides information on the default,
graduation and placement rates of students attending a
postsecondary educational institution that does not grant a
baccalaureate or postgraduate degree and is eligible to enroll a
student receiving a guaranteed student loan.


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does expressly grant
additional rulemaking authority to the Texas Higher Education
Coordinating Board (Section 61.0735 (2) (d)). 


SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 61 C, Education Code, by adding Section
61.0735 to read as follows:

  Sec. 61.0735. NOTICE RELATING TO GUARANTEED STUDENT LOANS.  (a)
Defines: (1) guaranteed student loan and (2) postsecondary
educational institution.

  (b) The Coordinating board shall collect and maintain information
relating to guaranteed student loans for each postsecondary
educational institution that does not grant a baccalaureate or a
postgraduate degree and is eligible to receive students with such
loans.

  (c) The Coordinating board shall prepare and distribute
information in subsection (b).

  (d) The Coordinating Board shall require: (1) postsecondary
educational institutions to report information required for the
administration of this section; and (2) each entity that
administers guaranteed student loans must provide the applicant
with the materials prepared by the board.

SECTION 2.  Effective date: September 1, 1995.  Materials shall be
provided no later than September 1, 1996.
SECTION 3.  Emergency clause. 


COMPARISON OF ORIGINAL TO SUBSTITUTE

H.B. 1697 required information on default, graduation and placement
rates from all postsecondary educational institutions of this
state.  The committee substitute limited the postsecondary
institutions to only those that do not offer baccalaureate or
postgraduate degrees.


SUMMARY OF COMMITTEE ACTION

H.B. 1697 was considered by the committee in a public hearing on
March 14, 1995.  The bill was left as pending business.

H.B. 1697 was considered by the committee in a public hearing on
March 28, 1995.  The committee considered a complete substitute for
the bill.  The substitute was adopted without objection by a non-record vote.  The bill was reported favorably as substituted, with
the recommendation that it do pass and be printed, by a record vote
of 7 ayes, 0 nays, 0 pnv, 2 absent.