1-1 By: Maxey (Senate Sponsor - Barrientos) H.B. No. 1697 1-2 (In the Senate - Received from the House May 12, 1995; 1-3 May 15, 1995, read first time and referred to Committee on 1-4 Education; May 17, 1995, reported adversely, with favorable 1-5 Committee Substitute by the following vote: Yeas 7, Nays 0; 1-6 May 17, 1995, sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1697 By: Barrientos 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to providing information to students applying for 1-11 guaranteed student loans relating to the graduation, placement, and 1-12 student loan default rates for proprietary schools. 1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-14 SECTION 1. (a) In this section: 1-15 (1) "Guaranteed student loan" means a loan guaranteed 1-16 under the Higher Education Act of 1965 (20 U.S.C. Section 1001 et 1-17 seq.) or other federal law the purpose of which is to provide money 1-18 for a person to attend a postsecondary educational institution. 1-19 (2) "Proprietary school" has the meaning assigned by 1-20 Chapter 32, Education Code, or the successor to that chapter. 1-21 (b) The agency responsible for administering Chapter 32, 1-22 Education Code, or the successor to that chapter shall collect and 1-23 maintain information relating to guaranteed student loans for each 1-24 proprietary school in this state that is eligible to enroll a 1-25 student receiving a guaranteed student loan. The information 1-26 collected by the agency must include, to the extent practicable: 1-27 (1) the graduation rate for students enrolled in the 1-28 proprietary school; 1-29 (2) the career placement rate for students graduating 1-30 from the proprietary school; and 1-31 (3) the guaranteed student loan default rate of 1-32 students who have received guaranteed student loans to attend the 1-33 proprietary school. 1-34 (c) The agency shall prepare materials for distribution to a 1-35 student applying for a guaranteed student loan to attend a 1-36 proprietary school to which this section applies designed to inform 1-37 the student of the graduation, placement, and loan default rates 1-38 for the proprietary school collected under Subsection (b) of this 1-39 section. The agency may provide the information in any form the 1-40 agency considers reasonable and may provide rates for the 1-41 proprietary school as a whole or for particular programs of the 1-42 proprietary school. 1-43 (d) The agency by rule shall require: 1-44 (1) proprietary schools covered by this section and 1-45 entities administering guaranteed student loans in this state to 1-46 report information that the agency requires for the administration 1-47 of this section; and 1-48 (2) each entity that administers guaranteed student 1-49 loans in this state to provide each applicant for a guaranteed 1-50 student loan to attend a proprietary school to which this section 1-51 applies with the materials prepared by the agency under Subsection 1-52 (c) of this section. 1-53 (e) The agency shall include in the materials distributed 1-54 under Subsection (c) of this section information warning the 1-55 student of the possible consequences of defaulting on repayment of 1-56 the student loan. The agency shall prescribe the form and content 1-57 of the warning. The warning must include information relating to 1-58 the following items, with any additions or changes prescribed by 1-59 the agency to ensure that the information is clear and accurate: 1-60 (1) that the student may be sued for the entire unpaid 1-61 amount of the delinquent loan, including interest; 1-62 (2) that the student may become liable for costs 1-63 associated with collecting the delinquent loan, including 1-64 attorney's fees and court costs; 1-65 (3) that the wages or salary of the student may be 1-66 subject to withholding to enforce repayment of the delinquent loan 1-67 and to recover related collection costs; 1-68 (4) that the student may become ineligible to receive 2-1 guaranteed student loans or other student financial aid until the 2-2 student has made satisfactory arrangements for repayment of the 2-3 delinquent loan; 2-4 (5) that the student may become ineligible for 2-5 assistance under most federal benefits programs; 2-6 (6) that the student may become ineligible for future 2-7 student deferments of the loan or for federal interest benefits 2-8 when enrolled in a college or university after default; and 2-9 (7) that the student may become ineligible to obtain 2-10 or renew a professional or occupational license. 2-11 (f) The agency shall prepare materials for distribution to 2-12 students applying for guaranteed student loans as required by this 2-13 section not later than September 1, 1996. 2-14 SECTION 2. This Act takes effect September 1, 1995. 2-15 SECTION 3. The importance of this legislation and the 2-16 crowded condition of the calendars in both houses create an 2-17 emergency and an imperative public necessity that the 2-18 constitutional rule requiring bills to be read on three several 2-19 days in each house be suspended, and this rule is hereby suspended. 2-20 * * * * *