H.B. No. 1697
1-1 AN ACT
1-2 relating to providing information to students applying for
1-3 guaranteed student loans relating to the graduation, placement, and
1-4 student loan default rates for proprietary schools.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. (a) In this section:
1-7 (1) "Guaranteed student loan" means a loan guaranteed
1-8 under the Higher Education Act of 1965 (20 U.S.C. Section 1001 et
1-9 seq.) or other federal law the purpose of which is to provide money
1-10 for a person to attend a postsecondary educational institution.
1-11 (2) "Proprietary school" has the meaning assigned by
1-12 Chapter 32, Education Code, or the successor to that chapter, and
1-13 any other private school offering courses in cosmetology, as
1-14 defined by Section 1(3), Chapter 1036, Acts of the 62nd
1-15 Legislature, Regular Session, 1971 (Article 8451a, Vernon's Texas
1-16 Civil Statutes), or barbering, as defined by Section 4(b), Chapter
1-17 65, Acts of the 41st Legislature, 1st Called Session, 1929 (Article
1-18 8407a, Vernon's Texas Civil Statutes).
1-19 (b) The agency responsible for administering Chapter 32,
1-20 Education Code, or the successor to that chapter shall collect and
1-21 maintain information relating to guaranteed student loans for each
1-22 proprietary school in this state that is eligible to enroll a
1-23 student receiving a guaranteed student loan. The information
1-24 collected by the agency must include, to the extent practicable:
2-1 (1) the graduation rate for students enrolled in the
2-2 proprietary school;
2-3 (2) the career placement rate for students graduating
2-4 from the proprietary school; and
2-5 (3) the guaranteed student loan default rate of
2-6 students who have received guaranteed student loans to attend the
2-7 proprietary school.
2-8 (c) The agency shall prepare materials for distribution to a
2-9 student applying for a guaranteed student loan to attend a
2-10 proprietary school to which this section applies designed to inform
2-11 the student of the graduation, placement, and loan default rates
2-12 for the proprietary school collected under Subsection (b) of this
2-13 section. The agency may provide the information in any form the
2-14 agency considers reasonable and may provide rates for the
2-15 proprietary school as a whole or for particular programs of the
2-16 proprietary school.
2-17 (d) The agency by rule shall require:
2-18 (1) proprietary schools covered by this section and
2-19 entities administering guaranteed student loans in this state to
2-20 report information that the agency requires for the administration
2-21 of this section; and
2-22 (2) each entity that administers guaranteed student
2-23 loans in this state to provide each applicant for a guaranteed
2-24 student loan to attend a proprietary school to which this section
2-25 applies with the materials prepared by the agency under Subsection
2-26 (c) of this section.
2-27 (e) The agency shall include in the materials distributed
3-1 under Subsection (c) of this section information warning the
3-2 student of the possible consequences of defaulting on repayment of
3-3 the student loan. The agency shall prescribe the form and content
3-4 of the warning. The warning must include information relating to
3-5 the following items, with any additions or changes prescribed by
3-6 the agency to ensure that the information is clear and accurate:
3-7 (1) that the student may be sued for the entire unpaid
3-8 amount of the delinquent loan, including interest;
3-9 (2) that the student may become liable for costs
3-10 associated with collecting the delinquent loan, including
3-11 attorney's fees and court costs;
3-12 (3) that the wages or salary of the student may be
3-13 subject to withholding to enforce repayment of the delinquent loan
3-14 and to recover related collection costs;
3-15 (4) that the student may become ineligible to receive
3-16 guaranteed student loans or other student financial aid until the
3-17 student has made satisfactory arrangements for repayment of the
3-18 delinquent loan;
3-19 (5) that the student may become ineligible for
3-20 assistance under most federal benefits programs;
3-21 (6) that the student may become ineligible for future
3-22 student deferments of the loan or for federal interest benefits
3-23 when enrolled in a college or university after default; and
3-24 (7) that the student may become ineligible to obtain
3-25 or renew a professional or occupational license.
3-26 (f) The agency shall prepare materials for distribution to
3-27 students applying for guaranteed student loans as required by this
4-1 section not later than September 1, 1996.
4-2 SECTION 2. This Act takes effect September 1, 1995.
4-3 SECTION 3. The importance of this legislation and the
4-4 crowded condition of the calendars in both houses create an
4-5 emergency and an imperative public necessity that the
4-6 constitutional rule requiring bills to be read on three several
4-7 days in each house be suspended, and this rule is hereby suspended.