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.
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