Zaffirini Bill Revives No-Interest Student Loans, Forgiven With A 3.0

The text as introduced · 2,659 words

89R340 MM-F

By: Zaffirini
S.B. No. 44

A BILL TO BE ENTITLED

AN ACT

relating to the establishment and operation of the Texas B-On-time

student loan program; authorizing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 56, Education Code, is amended by adding

Subchapter Q to read as follows:

SUBCHAPTER Q. TEXAS B-ON-TIME LOAN PROGRAM

Sec. 56.451. DEFINITIONS. In this subchapter:

(1) "Coordinating board" means the Texas Higher

Education Coordinating Board.

(2) "Eligible institution" means:

(A) a general academic teaching institution; or

(B) a public junior college that offers one or

more baccalaureate degree programs.

(3) "General academic teaching institution" and

"public junior college" have the meanings assigned by Section

61.003.

Sec. 56.452. PROGRAM NAME; PURPOSE. (a) The student loan

program authorized by this subchapter is known as the Texas

B-On-time loan program, and an individual loan awarded under this

subchapter is known as a Texas B-On-time loan.

(b) The purpose of this subchapter is to provide no-interest

loans to eligible students to enable those students to earn

baccalaureate degrees at public institutions of higher education in

this state.

Sec. 56.453. ADMINISTRATION OF PROGRAM; RULES. (a) The

coordinating board shall:

(1) administer the Texas B-On-time loan program;

(2) determine the repayment and other terms of a Texas

B-On-time loan; and

(3) in consultation with the student financial aid

officers of eligible institutions, adopt any rules necessary to

implement the program or this subchapter.

(b) The coordinating board may charge and collect a loan

origination fee from a person who receives a Texas B-On-time loan to

be used by the board to pay for the operating expenses for making

loans under this subchapter.

(c) The total amount of Texas B-On-time loans awarded may

not exceed the amount available in the Texas B-On-time student loan

account under Section 56.463.

(d) The coordinating board, in collaboration with eligible

institutions and other appropriate entities, shall adopt and

implement measures to:

(1) improve student participation in the Texas

B-On-time loan program, including strategies to better inform

students and prospective students about the program; and

(2) improve the rate of student satisfaction of the

requirements for obtaining Texas B-On-time loan forgiveness.

(e) The coordinating board, in collaboration with eligible

institutions and appropriate nonprofit or college access

organizations, shall:

(1) educate students regarding the eligibility

requirements for forgiveness of Texas B-On-time loans;

(2) ensure that students applying for or receiving a

Texas B-On-time loan understand their responsibility to repay any

portion of the loan that is not forgiven; and

(3) ensure that students who are required to repay

Texas B-On-time loans receive and understand information regarding

loan default prevention strategies.

Sec. 56.454. PERSONS NOT ELIGIBLE. A person is not eligible

to receive a Texas B-On-time loan if the person was ever previously

enrolled at an institution of higher education for an academic term

before the academic year in which the person initially applies for a

loan under this subchapter.

Sec. 56.455. INITIAL ELIGIBILITY FOR LOAN. To be eligible

initially for a Texas B-On-time loan, a person must:

(1) be a resident of this state under Section 54.052 or

be entitled, as a child of a member of the armed forces of the United

States, to pay tuition at the rate provided for residents of this

state under Section 54.241;

(2) meet one of the following academic requirements:

(A) be a graduate of a public or private high

school in this state who graduated not earlier than the 2024-2025

school year and earned a distinguished level of achievement under

the foundation high school program established under Section 28.025

or its equivalent; or

(B) be a graduate of a high school operated by the

United States Department of Defense who:

(i) graduated from that school not earlier

than the 2024-2025 school year; and

(ii) at the time of graduation from that

school was a dependent child of a member of the armed forces of the

United States;

(3) be enrolled for a full course load for an

undergraduate student, as determined by the coordinating board, in

a baccalaureate degree program at an eligible institution;

(4) be eligible for federal financial aid, except that

a person is not required to meet any financial need requirement

applicable to a particular federal financial aid program; and

(5) comply with any additional requirement adopted by

the coordinating board under this subchapter.

Sec. 56.456. CONTINUING ELIGIBILITY AND ACADEMIC

PERFORMANCE REQUIREMENTS. (a) After initially qualifying for a

Texas B-On-time loan, a person may continue to receive a Texas

B-On-time loan for each semester or term in which the person is

enrolled at an eligible institution only if the person:

(1) is enrolled for a full course load for an

undergraduate student, as determined by the coordinating board, in

a baccalaureate degree program at an eligible institution;

(2) is eligible for federal financial aid, except that

a person is not required to meet any financial need requirement

applicable to a particular federal financial aid program;

(3) makes satisfactory academic progress toward a

degree as determined by the institution at which the person is

enrolled, if the person is enrolled in the person's first academic

year at the institution;

(4) completed at least 75 percent of the semester

credit hours attempted by the person in the most recent academic

year and has a cumulative grade point average of at least 2.5 on a

four-point scale or the equivalent on all coursework previously

attempted at institutions of higher education, if the person is

enrolled in any academic year after the person's first academic

year; and

(5) complies with any additional requirement adopted

by the coordinating board under this subchapter.

(b) If a person fails to meet any of the requirements of

Subsection (a) after the completion of any semester or term, the

person may not receive a Texas B-On-time loan for the next semester

or term in which the person enrolls. A person may become eligible

to receive a Texas B-On-time loan in a subsequent semester or term

if the person:

(1) completes a semester or term during which the

person is not eligible for a Texas B-On-time loan; and

(2) meets all of the requirements of Subsection (a).

(c) A person who is eligible to receive a Texas B-On-time

loan continues to remain eligible to receive the Texas B-On-time

loan if the person enrolls in or transfers to another eligible

institution.

Sec. 56.457. WAIVER OF COURSE LOAD REQUIREMENT. (a) The

coordinating board shall adopt rules to allow a person who is

otherwise eligible to receive a Texas B-On-time loan, in the event

of a hardship or other good cause, to receive a Texas B-On-time loan

while enrolled in a number of semester credit hours that is less

than the number of semester credit hours required under Section

56.455 or 56.456, as applicable.

(b) The coordinating board may not allow a person to receive

a Texas B-On-time loan while enrolled in fewer than six semester

credit hours.

Sec. 56.458. LOAN USE. A person receiving a Texas B-On-time

loan may use the money to pay for any usual and customary costs of

attendance at an eligible institution incurred by the student,

including tuition, fees, books, and room and board.

Sec. 56.459. LOAN AMOUNT. (a) The amount of a Texas

B-On-time loan for a semester or term for a student enrolled

full-time at a general academic teaching institution is an amount

determined by the coordinating board as the average statewide

amount of tuition and required fees that a resident student

enrolled full-time in a baccalaureate degree program would be

charged for that semester or term at general academic teaching

institutions.

(b) The amount of a Texas B-On-time loan for a student

enrolled full-time at a public junior college is an amount

determined by the coordinating board as the average statewide

amount of tuition and required fees that a student who is a resident

of the junior college district and is enrolled full-time in a

baccalaureate degree program would be charged for that semester or

term at public junior colleges.

(c) Not later than January 31 of each year, the coordinating

board shall publish the amounts of each loan established by the

board for each type of institution for the academic year beginning

the next fall semester.

(d) If in any academic year the amount of money in the Texas

B-On-time student loan account is insufficient to provide the loans

to all eligible persons in amounts specified by this section, the

coordinating board shall determine the amount of available money

and shall allocate that amount to eligible students in the order in

which the students applied.

Sec. 56.460. NOTIFICATION OF PROGRAM; RESPONSIBILITIES OF

SCHOOL DISTRICTS. (a) The coordinating board, in consultation

with representatives of the board's financial aid advisory

committee established under Section 61.0776, shall prepare

materials designed to inform prospective students, their parents or

guardians, and their teachers and counselors about the program and

eligibility for a Texas B-On-time loan. The coordinating board

shall distribute to each eligible institution and to each school

district a copy of the materials prepared under this subchapter.

(b) Each school district shall notify its middle school

students, junior high school students, and high school students,

those students' teachers and counselors, and those students'

parents or guardians of the Texas B-On-time loan program and the

eligibility requirements of the program.

Sec. 56.461. LOAN PAYMENT DEFERRED. The repayment of a

Texas B-On-time loan received by a student under this subchapter is

deferred as long as the student remains continuously enrolled in a

baccalaureate degree program at an eligible institution.

Sec. 56.462. LOAN FORGIVENESS. A student who receives a

Texas B-On-time loan shall be forgiven the amount of the student's

loan if the student is awarded a baccalaureate degree at an eligible

institution with a cumulative grade point average of at least 3.0 on

a four-point scale or the equivalent:

(1) within:

(A) four calendar years after the date the

student initially enrolled in an institution of higher education if

the student is awarded a degree other than a degree in a program

that the institution certifies to the coordinating board is a

program that requires more than four years to complete; or

(B) five calendar years after the date the

student initially enrolled in an institution of higher education if

the student is awarded a degree in a program that the institution

certifies to the coordinating board is a program that requires more

than four years to complete; or

(2) with a total number of semester credit hours that

is not more than six hours more than the minimum number of semester

credit hours required to complete the degree, including transfer

credit hours and excluding hours earned:

(A) exclusively by examination;

(B) for a course for which the student received

credit toward the student's high school academic requirements; and

(C) for developmental coursework that an

institution of higher education required the student to take under

Subchapter F-1, Chapter 51, or under the provisions of former

Section 51.306 or former Section 51.3062.

Sec. 56.463. TEXAS B-ON-TIME STUDENT LOAN ACCOUNT. (a) The

Texas B-On-time student loan account is an account in the general

revenue fund. The account consists of gifts and grants and

legislative appropriations received under Section 56.464 and other

money required by law to be deposited in the account.

(b) Money in the Texas B-On-time student loan account may be

used only to pay the costs of the coordinating board related to the

operation of the Texas B-On-time loan program and as otherwise

provided by this subchapter.

Sec. 56.464. FUNDING. (a) The coordinating board may

solicit and accept gifts and grants from any public or private

source for the purposes of this subchapter.

(b) The coordinating board may issue and sell general

obligation bonds under Subchapter F, Chapter 52, for the purposes

of this subchapter.

(c) The legislature may appropriate money for the purposes

of this subchapter.

SECTION 2. Section 52.89, Education Code, is amended by

amending Subsection (c) and adding Subsection (c-1) to read as

follows:

(c) The board shall deposit to the credit of the fund any

proceeds from the sale of bonds, excluding:

(1) any accrued interest on the bonds which shall be

deposited in the board interest and sinking fund relating to the

bonds; and

(2) proceeds from the sale of bonds issued by the board

under Section 56.464(b) to provide Texas B-On-time student loans [ ,

as that subsection existed immediately before September 1, 2015 ].

(c-1) Notwithstanding Subsection (c), proceeds from the

sale of bonds issued by the board under Section 56.464(b) to provide

Texas B-On-time student loans may be deposited to the credit of the

fund by resolution of the board.

SECTION 3. Sections 52.90(a) and (b), Education Code, are

amended to read as follows:

(a) The board :

(1) shall make a loan from the fund to a student who

qualifies for a loan under Subchapter C ; and

(2) may make a loan from the fund to a student who

qualifies for a Texas B-On-time student loan under Subchapter Q,

Chapter 56 .

(b) Loans from the fund are governed by Subchapter C of this

chapter or Subchapter Q, Chapter 56, as appropriate, as if made

under that subchapter, except to the extent of conflict with this

subchapter .

SECTION 4. The heading to Section 52.91, Education Code, is

amended to read as follows:

Sec. 52.91. BONDS FOR [ FORMER ] TEXAS B-ON-TIME STUDENT LOAN

PROGRAM.

SECTION 5. Section 52.91, Education Code, is amended by

amending Subsections (a) and (c) and adding Subsection (b) to read

as follows:

(a) The board shall deposit to the credit of the Texas

B-On-time student loan account established under Section 56.463 or

former Section 56.0092 any proceeds from the sale of bonds issued by

the board to fund Texas B-On-time student loans under Section

56.464(b), [ as that subsection existed immediately before

September 1, 2015, ] other than :

(1) accrued interest on the bonds, which shall be

deposited to the credit of the interest and sinking fund related to

the bonds ; and

(2) any proceeds from the sale of the bonds that the

board by resolution deposits to the student loan auxiliary fund

under Section 52.89(c-1) .

(b) The board by resolution may establish, as provided by

Section 52.03, one or more interest and sinking funds to be used for

any purpose relating to the Texas B-On-time student loan program

established under Subchapter Q, Chapter 56.

(c) The board shall repay bonds described by Subsection (a)

using proceeds from the bonds, legislative appropriations, and

money collected by the board as repayment for Texas B-On-time

student loans awarded by the board [ under Section 56.0092(c) for a

semester or term occurring before the 2020 fall semester ]. The

board may also repay the bonds by using tuition set aside under

Section 56.465, as that section existed immediately before

September 1, 2015, for a semester or term occurring before the 2015

fall semester. The board may not repay the bonds with money

collected by the board as repayment for student loans awarded by the

board under Subchapter C.

SECTION 6. Section 56.0092, Education Code, is repealed.

SECTION 7. (a) The Texas Higher Education Coordinating

Board and the eligible institutions shall award loans under the

Texas B-On-time loan program established under Subchapter Q,

Chapter 56, Education Code, as added by this Act, beginning with the

2025 fall semester.

(b) The Texas Higher Education Coordinating Board shall

adopt the initial rules for awarding loans under the Texas

B-On-time loan program established under Subchapter Q, Chapter 56,

Education Code, as added by this Act, as soon as practicable after

the effective date of this Act.

SECTION 8. 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, 2025.