BILL ANALYSIS
Senate Research Center S.B. 1232
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Current law relating to the collection of tuition payments from and the provision of an emergency loan to a student provides few options for students. The law does not provide for payment flexibility for a student paying tuition and fees through an installment plan, the payment of small balances with an installment plan, online agreements for emergency loans, or the option to pay an origination fee rather than interest on an emergency loan.
As proposed, S.B. 1232 provides flexibility in an installment plan used by a student to pay tuition and fees to an institution of higher education. The bill also authorizes an emergency loan to be made by either electronic or written agreement and an origination fee, rather than interest, to be charged for an emergency loan.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 54.007, Education Code, by amending Subsections (a), (b), and (d), by amending and relettering Subsection (f), as added by Chapter 888, Acts of the 79th Legislature, Regular Session, 2005, as Subsection (g), and by adding Subsection (b-1), as follows:
(a) Requires a governing board (board) of an institution of higher education (institution) to provide for the payment of tuition and fees for the fall and spring semesters either through full payment before the beginning of the semester, except as provided by Subsection (b-1), or in installments under one or more payment plan options that require the first payment to be made before the semester and the final payment to be made before the last day of the semester. Deletes existing text relating to the previous installment payment requirements.
(b) Requires a board to provide for the payment of tuition and fees for a summer term through either full payment before the beginning of the term, except as provided by Subsection (b-1), or installments under one or more payment plan options that require the first payment to be made before the term begins and the final payment to be made before the last day of the term, or, if enrolled for a summer term in a public junior college, as previously provided in this subsection. Deletes existing text relating to the previous installment payment requirements.
(b-1) Requires a student owing a balance of tuition and fees as a result of a change in the student's class schedule or a balance less than $100 after making an insufficient payment of tuition and fees to pay the balance owed not later than the next payment date established by a board under a payment plan adopted under Subsection (a)(2) or (b)(2), as applicable.
(d) Requires a board to include in any written or electronic agreement authorized by a student, rather than any promissory note signed by a student, a statement set forth in this subsection regarding the failure to pay the full amount of tuition and fees by the applicable due dates before imposing any sanctions authorized by this subsection on the student. Makes conforming and nonsubstantive changes.
(g) Requires a board to require a student who elects to pay tuition and fees by installment under this section to enter into either a written or electronic agreement reflecting the terms and conditions of the installment plan.
SECTION 2. Reenacts and amends Section 56.053(a), Education Code, as amended by Chapters 80 and 655, Acts of the 77th Legislature, Regular Session, 2001, to require, as a condition the rules regarding loan terms adopted by a board are subject to, that a loan be evidenced by a written or electronic agreement, rather than a promissory note, providing either for an origination fee of not more than three percent of the loan amount or a specified amount of interest on the loan. Deletes a prohibition on the maximum loan amount being lower than an amount equal to the required tuition and fees unless an institution determines a lower amount is in the best interest of the student. Makes nonsubstantive changes.
SECTION 3. Amends Section 56.053, Education Code, by adding Subsection (c), to provide that the maximum loan amount established under Subsection (a)(3) does not entitle a student to a loan in that amount. Authorizes an institution to lend a student less than that amount if it determines that a lower amount is in the best interest of the student.
SECTION 4. (a) Makes application of this Act prospective to the beginning of the 2007 fall semester, unless this Act takes effect after July 1, 2007, in which event application of this Act is prospective to the beginning of the 2008 spring semester.
(b) Makes application of this Act to the payment of tuition and fees prospective.
SECTION 5. Effective date: upon passage or September 1, 2007.