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.