1-1 AN ACT
1-2 relating to the Texas Guaranteed Student Loan Corporation and its
1-3 programs.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 57.01, Education Code, is amended to read
1-6 as follows:
1-7 Sec. 57.01. DECLARATION OF POLICY. The legislature, giving
1-8 due consideration to the historical and continuing interest of the
1-9 people of the State of Texas in encouraging deserving and qualified
1-10 persons to realize their aspirations for education beyond high
1-11 school, finds and declares that postsecondary education for those
1-12 who desire such an education and are properly qualified therefor is
1-13 important to the welfare and security of this state and the nation
1-14 and, consequently, is an important public purpose. The legislature
1-15 finds and declares that the state can achieve its full economic and
1-16 social potential only if every individual has the opportunity to
1-17 contribute to the full extent of his or her capabilities and only
1-18 when financial barriers to his or her economic, social, and
1-19 educational goals are removed. It is, therefore, the purpose of
1-20 this chapter to establish the Texas Guaranteed Student Loan
1-21 Corporation to:
1-22 (1) administer a guaranteed student loan program to
1-23 assist qualified Texas students in receiving a postsecondary
1-24 education in this state or elsewhere in the nation; and
2-1 (2) [to] provide necessary and desirable services
2-2 related to the loan program, including cooperative awareness
2-3 efforts with appropriate educational and civic associations
2-4 designed to disseminate postsecondary education awareness
2-5 information, including information regarding student financial aid
2-6 and the Federal Family Education Loan Program, and other relevant
2-7 topics including the prevention of student loan default.
2-8 SECTION 2. Section 57.11, Education Code, is amended by
2-9 adding Subsection (d) to read as follows:
2-10 (d) Student loan borrower information collected, assembled,
2-11 or maintained by the corporation is confidential and is not subject
2-12 to disclosure under Chapter 552, Government Code.
2-13 SECTION 3. Section 57.12(a), Education Code, is amended to
2-14 read as follows:
2-15 (a) The Texas Guaranteed Student Loan Corporation is subject
2-16 to Chapter 325, Government Code (Texas Sunset Act). Unless
2-17 continued in existence as provided by that chapter, the corporation
2-18 is abolished and this chapter expires September 1, 2005 [2003].
2-19 SECTION 4. Subchapter B, Chapter 57, Education Code, is
2-20 amended by adding Sections 57.21 and 57.211 to read as follows:
2-21 Sec. 57.21. PROGRAMS RELATED TO STUDENT FINANCIAL AID AND
2-22 COMPLETION OF POSTSECONDARY EDUCATION. (a) The corporation shall
2-23 take an active role in coordinating, facilitating, promoting, and
2-24 providing assistance and support to:
2-25 (1) programs designed to make available to the
2-26 residents of this state information concerning postsecondary
2-27 education awareness and the availability of student financial aid,
3-1 including the Federal Family Education Loan Program, and to assist
3-2 families in obtaining needed postsecondary education financing;
3-3 (2) programs designed to prevent student loan default;
3-4 and
3-5 (3) programs designed to increase student retention
3-6 and graduation rates in postsecondary education.
3-7 (b) The corporation shall coordinate its efforts under this
3-8 section with other entities, including the Texas Higher Education
3-9 Coordinating Board, the Texas Education Agency, professional,
3-10 educational, and civic associations, postsecondary educational
3-11 institutions that participate in the corporation's programs, and
3-12 lender advisory committees established under Section 57.461.
3-13 Sec. 57.211. SUPPORT OF EDUCATIONAL PURPOSES. The
3-14 corporation may support educational purposes with the approval of
3-15 the board.
3-16 SECTION 5. Section 57.22, Education Code, is amended to read
3-17 as follows:
3-18 Sec. 57.22. APPLICATION OF THE TEXAS NON-PROFIT CORPORATION
3-19 ACT. (a) The corporation is subject to the Texas Non-Profit
3-20 Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
3-21 Statutes), except that:
3-22 (1) the corporation may not make donations for the
3-23 public welfare or for charitable or[,] scientific[, or educational]
3-24 purposes or in aid of war activities;
3-25 (2) the corporation is not required to file articles
3-26 of incorporation;
3-27 (3) the corporation is not subject to voluntary or
4-1 involuntary dissolution;
4-2 (4) the corporation may not be placed in receivership;
4-3 and
4-4 (5) the corporation is not required to make reports to
4-5 the secretary of state under Article 9.01 of that Act.
4-6 (b) Subsection (a)(1) does not prohibit the corporation from
4-7 supporting educational purposes under Section 57.211.
4-8 SECTION 6. Section 57.41(c), Education Code, is amended to
4-9 read as follows:
4-10 (c) The corporation shall[, to the extent funds are
4-11 available,] make loans to eligible students, as a lender of last
4-12 resort, under the following conditions:
4-13 (1) the borrower certifies and provides evidence to
4-14 the corporation that the borrower [he/she] has made an application
4-15 to at least two qualified lenders and was unable to obtain a
4-16 guaranteed student loan from a commercial lender and is not aware
4-17 of any eligible lender in this state that is willing to make a
4-18 guaranteed student loan;
4-19 (2) the borrower also certifies to the corporation
4-20 that the borrower [he/she] was unable to obtain a guaranteed
4-21 student loan from the Texas Higher Education Coordinating Board;
4-22 (3) the corporation certifies that it is not aware of
4-23 any eligible lender in this state that is willing to make a
4-24 guaranteed student loan; and
4-25 (4) the corporation must, to the extent a market is
4-26 available, sell loans made as last resort loans within a reasonable
4-27 period of time of the date of loan origination. This provision
5-1 will not apply to any loans that cannot be sold at par. The
5-2 corporation shall maintain a separate file showing the name and
5-3 address of the student receiving such a loan and the name and
5-4 address of the involved educational institution.
5-5 SECTION 7. Section 57.43, Education Code, is amended to read
5-6 as follows:
5-7 Sec. 57.43. INSURANCE PREMIUMS. [(a)] The corporation may
5-8 impose and collect insurance premiums from eligible borrowers in an
5-9 amount not to exceed the maximum allowable under the Higher
5-10 Education Act of 1965, as amended.
5-11 [(b) If the corporation imposes an insurance premium under
5-12 this section, the corporation must impose the lowest insurance
5-13 premium practicable that:]
5-14 [(1) complies with federal requirements; and]
5-15 [(2) does not jeopardize the corporation's financial
5-16 viability.]
5-17 SECTION 8. Section 57.45(g), Education Code, is amended to
5-18 read as follows:
5-19 (g) Loans guaranteed by the corporation may be assigned or
5-20 transferred by the holders thereof to any eligible lender as
5-21 provided by the Higher Education Act of 1965, as amended,
5-22 notwithstanding the state in which the principal place of business
5-23 of any such eligible lender is located. Any loan so assigned or
5-24 transferred shall continue to be guaranteed by the corporation,
5-25 and, in the event of default, the corporation shall pay [meet] the
5-26 lender or holder [claim out of the guarantee account established]
5-27 under the [Section 57.72 of this code; provided, however, any such
6-1 subsequent holder shall be required to comply with other]
6-2 provisions of the Higher Education Act of 1965, as amended [this
6-3 chapter].
6-4 SECTION 9. Section 57.461(b), Education Code, is amended to
6-5 read as follows:
6-6 (b) The board shall appoint advisory committee members on
6-7 the recommendation of the president [executive director].
6-8 SECTION 10. Section 57.49, Education Code, is amended to
6-9 read as follows:
6-10 Sec. 57.49. COOPERATION OF STATE AGENCIES AND SUBDIVISIONS.
6-11 Each [To the extent allowed by law, each] agency and political
6-12 subdivision of the state shall cooperate with the corporation in
6-13 providing information to the agency's or political subdivision's
6-14 clients concerning student financial aid, including information
6-15 about default prevention. Each agency and political subdivision
6-16 shall provide information to the corporation on request to assist
6-17 the corporation in curing delinquent loans and collecting [attempts
6-18 to collect on] defaulted loans.
6-19 SECTION 11. Section 57.71, Education Code, is amended to
6-20 read as follows:
6-21 Sec. 57.71. RESERVE AND OPERATING FUNDS [FUND]. The
6-22 corporation shall establish [a] reserve and operating funds in
6-23 accordance with Section 422 of the Higher Education Act of 1965 (20
6-24 U.S.C. Section 1072), as amended [fund into which all money
6-25 received by the corporation shall be deposited. The corporation
6-26 shall establish accounts in that fund in accordance with this
6-27 section].
7-1 SECTION 12. Section 57.78, Education Code, is amended to
7-2 read as follows:
7-3 Sec. 57.78. INVESTMENTS[, DEPOSITORIES]. All money of the
7-4 corporation may be invested in accordance with Chapter 2256,
7-5 Government Code [in direct obligations of the United States of
7-6 America; obligations which in the opinion of the Attorney General
7-7 of the United States are general obligations of the United States
7-8 and backed by its full faith and credit; obligations guaranteed by
7-9 the United States of America; evidences of indebtedness of the
7-10 Federal Land Banks, Federal Intermediate Credit Banks, Banks for
7-11 Cooperatives, Federal Home Loan Banks, Federal National Mortgage
7-12 Association, Federal Financing Bank Participation Certificates in
7-13 the Federal Assets Financing Trust, New Housing Authority Bonds and
7-14 Project Notes fully secured by contracts with the United States or
7-15 any other agency or instrumentality of the United States of
7-16 America; and deposits or certificates of deposits of any bank or
7-17 trust company which are fully secured (to the extent not insured by
7-18 a corporation instrumentality or agency of the United States of
7-19 America) by obligations in which the corporation may invest under
7-20 the provisions hereof].
7-21 SECTION 13. Sections 57.72, 57.73, and 57.74, Education
7-22 Code, are repealed.
7-23 SECTION 14. The importance of this legislation and the
7-24 crowded condition of the calendars in both houses create an
7-25 emergency and an imperative public necessity that the
7-26 constitutional rule requiring bills to be read on three several
7-27 days in each house be suspended, and this rule is hereby suspended,
8-1 and that this Act take effect and be in force from and after its
8-2 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2568 was passed by the House on April
23, 1999, by the following vote: Yeas 141, Nays 0, 2 present, not
voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2568 was passed by the Senate on May
20, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor