By: West, Hegar S.B. No. 680
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a pilot program to improve student loan default rates
  and financial aid literacy among postsecondary students.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter C, Chapter 61, Education Code, is
  amended by adding Section 61.0763 to read as follows:
         Sec. 61.0763.  STUDENT LOAN DEFAULT PREVENTION AND FINANCIAL
  AID LITERACY PILOT PROGRAM. (a)  In this section, "career school
  or college" has the meaning assigned by Section 132.001.
         (b)  Not later than January 1, 2014, the board shall
  establish and administer a pilot program at selected postsecondary
  educational institutions to ensure that students of those
  institutions are informed consumers with regard to all aspects of
  student financial aid, including:
               (1)  the consequences of borrowing to finance a
  student's postsecondary education;
               (2)  the financial consequences of a student's academic
  and career choices; and
               (3)  strategies for avoiding student loan delinquency
  and default.
         (c)  The board shall select at least one institution from
  each of the following categories of postsecondary educational
  institutions to participate in the program:
               (1)  general academic teaching institutions;
               (2)  public junior colleges;
               (3)  private or independent institutions of higher
  education; and
               (4)  career schools or colleges.
         (d)  In selecting postsecondary educational institutions to
  participate in the pilot program, the board shall give priority to
  institutions that have a three-year cohort student loan default
  rate, as reported by the United States Department of Education:
               (1)  of more than 20 percent; or
               (2)  that has above average growth as compared to the
  rates of other postsecondary educational institutions in this
  state.
         (e)  The board, in consultation with postsecondary
  educational institutions, shall adopt rules for the administration
  of the pilot program, including rules governing the selection of
  postsecondary educational institutions to participate in the pilot
  program consistent with the requirements of Subsection (d).
         (f)  The board may contract with one or more entities to
  administer the pilot program according to criteria established by
  board rule.
         (g)  Not later than January 1 of each year, beginning in
  2016:
               (1)  the board shall submit a report to the governor,
  the lieutenant governor, and the speaker of the house of
  representatives regarding the outcomes of the pilot program, as
  reflected in the federal student loan default rates reported for
  the participating institutions; and
               (2)  each participating institution shall submit a
  report to the governor, the lieutenant governor, and the speaker of
  the house of representatives regarding the outcomes of the pilot
  program at the institution, as reflected in the federal student
  loan default rate reported for the institution.
         (h)  This section expires December 31, 2020.
         SECTION 2.  The Texas Higher Education Coordinating Board
  shall adopt rules for the administration of Section 61.0763,
  Education Code, as added by this Act, as soon as practicable after
  this Act takes effect.  For that purpose, the coordinating board may
  adopt the initial rules in the manner provided by law for emergency
  rules.
         SECTION 3.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2013.