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A BILL TO BE ENTITLED
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AN ACT
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relating to certain prohibitions regarding the relationship |
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between student loan lenders and public or private institutions of |
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higher education. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter Z, Chapter 51, Education Code, is |
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amended by adding Section 51.9645 to read as follows: |
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Sec. 51.9645. PROHIBITIONS REGARDING THE RELATIONSHIP |
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BETWEEN STUDENT LOAN LENDERS AND PUBLIC OR PRIVATE INSTITUTIONS OF |
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HIGHER EDUCATION. (a) In this section: |
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(1) "Public or private institution of higher |
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education" means: |
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(A) an institution of higher education, as |
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defined by Section 61.003; and |
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(B) a private or independent institution of |
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higher education, as defined by Section 61.003. |
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(2) "Student loan" means a loan that requires that all |
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or part of the loan proceeds be used to assist a person in paying the |
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costs incurred by a person in attending a public or private |
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institution of higher education. |
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(3) "Student loan lender" means a person whose primary |
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business is: |
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(A) making, brokering, arranging, or accepting |
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applications for student loans; or |
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(B) a combination of activities described by |
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Paragraph (A). |
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(b) A student loan lender and a public or private |
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institution of higher education may not enter into an agreement |
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under which the lender: |
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(1) pays the institution a percentage of the principal |
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of loans directed towards the lender from a borrower for higher |
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education expenses related to attending the institution; or |
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(2) shares the proceeds from the lender's student loan |
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activities with the institution in any other manner. |
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(c) A student loan lender may not: |
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(1) offer or provide any gift to a public or private |
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institution of higher education or to an employee of a public or |
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private institution of higher education in exchange for the |
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institution or employee recommending the lender to students or |
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potential students of the institution who are seeking financial |
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aid; or |
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(2) provide any remuneration to an employee of a |
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public or private institution of higher education for service on an |
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advisory board to the lender. |
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(d) A public or private institution of higher education or |
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an employee of a public or private institution of higher education |
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may not solicit or accept any gift from a student loan lender in |
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exchange for the institution or employee recommending the lender to |
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students or potential students of the institution who are seeking |
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financial aid. |
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(e) An employee of a public or private institution of higher |
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education may not accept any remuneration for service on an |
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advisory board to a student loan lender. |
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SECTION 2. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |