EDUCATION CODE
CHAPTER 57. GUARANTEED STUDENT LOANS
SUBCHAPTER A. GENERAL PROVISIONS
§ 57.01. DECLARATION OF POLICY. The legislature,
giving due consideration to the historical and continuing interest
of the people of the State of Texas in encouraging deserving and
qualified persons to realize their aspirations for education beyond
high school, finds and declares that postsecondary education for
those who desire such an education and are properly qualified
therefor is important to the welfare and security of this state and
the nation and, consequently, is an important public purpose. The
legislature finds and declares that the state can achieve its full
economic and social potential only if every individual has the
opportunity to contribute to the full extent of his or her
capabilities and only when financial barriers to his or her
economic, social, and educational goals are removed. It is,
therefore, the purpose of this chapter to establish the Texas
Guaranteed Student Loan Corporation to:
(1) administer a guaranteed student loan program to
assist qualified Texas students in receiving a postsecondary
education in this state or elsewhere in the nation; and
(2) provide necessary and desirable services related
to the loan program, including cooperative awareness efforts with
appropriate educational and civic associations designed to
disseminate postsecondary education awareness information,
including information regarding student financial aid and the
Federal Family Education Loan Program, and other relevant topics
including the prevention of student loan default.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1991, 72nd Leg., ch. 450, § 1, eff.
Aug. 26, 1991; Acts 1999, 76th Leg., ch. 967, § 1, eff. June 18,
1999.
§ 57.02. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors of the
corporation.
(2) "Corporation" means the Texas Guaranteed Student
Loan Corporation.
(3) "Postsecondary educational institution" means any
institution, public or private, that provides courses of
instruction beyond that offered in secondary schools.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979.
SUBCHAPTER B. ADMINISTRATION
§ 57.11. TEXAS GUARANTEED STUDENT LOAN
CORPORATION. (a) The Texas Guaranteed Student Loan Corporation
is created to administer the programs authorized by this chapter.
The corporation is a public nonprofit corporation and, except as
otherwise provided in this chapter, has all the powers and duties
incident to a nonprofit corporation under the Texas Non-Profit
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
Statutes).
(b) Except as otherwise provided by law, all expenses of the
corporation shall be paid from income of the corporation.
(c) The corporation is subject to Chapter 551, Government
Code.
(d) Student loan borrower information collected, assembled,
or maintained by the corporation is confidential and is not subject
to disclosure under Chapter 552, Government Code.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1989, 71st Leg., ch. 985, § 1, eff.
Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 450, § 2, eff. Aug. 26,
1991; Acts 1995, 74th Leg., ch. 76, § 5.95(82), eff. Sept. 1,
1995; Acts 1999, 76th Leg., ch. 967, § 2, eff. June 18, 1999.
§ 57.12. APPLICATION OF SUNSET ACT. (a) The Texas
Guaranteed Student Loan Corporation is subject to Chapter 325,
Government Code (Texas Sunset Act). Unless continued in existence
as provided by that chapter, the corporation is abolished and this
chapter expires September 1, 2005.
(b) If the corporation is abolished, the comptroller of
public accounts shall serve as trustee to administer the assets of
the corporation and satisfy all outstanding obligations.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1985, 69th Leg., ch. 479, § 199, eff.
Sept. 1, 1985; Acts 1985, 69th Leg., ch. 729, § 15, eff. Sept. 1,
1985; Acts 1989, 71st Leg., ch. 985, § 2, eff. Sept. 1, 1989;
Acts 1991, 72nd Leg., 1st C.S., ch. 17, § 6.05, eff. Nov. 12,
1991; Acts 1999, 76th Leg., ch. 967, § 3, eff. June 18, 1999.
§ 57.13. COMPOSITION OF BOARD OF DIRECTORS. (a) The
corporation is governed by a board of nine directors appointed in
accordance with this section.
(b) The governor, with the advice and consent of the senate,
shall appoint nine members to the board. Four members must have
knowledge of or experience in finance, including management of
funds or business operations. One member must be a student who is
enrolled at a postsecondary educational institution for the number
of credit hours required by the institution to be classified as a
full-time student of the institution. Three members must be
members of the faculty or administration of an eligible
postsecondary educational institution, as defined by Section 57.46
of this code.
(c) Appointments to the board shall be made without regard
to the race, color, handicap, sex, religion, age, or national
origin of the appointees.
(d) The comptroller of public accounts or the comptroller's
designee shall serve as an ex officio voting member of the board.
(e) Each member of the board must be a Texas resident.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1989, 71st Leg., ch. 985, § 3, eff.
Sept. 1, 1989; Acts 2003, 78th Leg., ch. 1170, § 15.01, eff.
Sept. 1, 2003.
§ 57.131. RESTRICTIONS ON BOARD APPOINTMENT,
MEMBERSHIP, AND EMPLOYMENT. (a) An officer, employee, or paid
consultant of a Texas trade association of institutions that
originate or hold student loans or a Texas trade association in the
field of higher education may not be a member of the board or a
corporation employee who is exempt from the corporation's position
classification schedule.
(b) A person who is the spouse of an officer, manager, or
paid consultant of a Texas trade association described by
Subsection (a) of this section may not be a member of the board and
may not be a corporation employee who is exempt from the
corporation's position classification schedule.
(c) A person may not serve as a member of the board or act as
the general counsel to the board if the person is required to
register as a lobbyist under Chapter 305, Government Code, because
of the person's activities for compensation on behalf of a
profession related to the operation of the corporation.
(d) A person may not be one of the members of the board
required by Section 57.13(b) of this code to have knowledge of or
experience in finance if the person is a member of the board of
directors or an employee of an eligible lender that participates in
the guaranteed student loan program.
(e) For the purposes of this section, a Texas trade
association is a nonprofit, cooperative, and voluntarily joined
association of business or professional competitors in this state
designed to assist its members and its industry or profession in
dealing with mutual business or professional problems and in
promoting their common interest.
Added by Acts 1989, 71st Leg., ch. 985, § 4, eff. Sept. 1, 1989.
§ 57.14. DIRECTORS' TERMS OF OFFICE. Members of the
board appointed by the governor serve for terms of six years, with
the terms of two or three members expiring on January 31 of each
odd-numbered year.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 2003, 78th Leg., ch. 1170, § 15.02,
eff. Sept. 1, 2003.
§ 57.141. REMOVAL OF BOARD MEMBER. (a) It is a ground
for removal from the board if a member:
(1) does not have at the time of appointment the
qualifications required by Section 57.13(b) of this code;
(2) does not maintain during service on the board the
qualifications required by Section 57.13(b) of this code;
(3) violates a prohibition established by Section
57.131 of this code;
(4) cannot discharge the member's duties for a
substantial part of the term for which the member is appointed
because of illness or disability; or
(5) is absent from more than half of the regularly
scheduled board meetings that the member is eligible to attend
during a calendar year unless the absence is excused by majority
vote of the board.
(b) The validity of an action of the board is not affected by
the fact that it was taken when a ground for removal of a board
member existed.
(c) If the president has knowledge that a potential ground
for removal exists, the president shall notify the chairman of the
board of the ground. The chairman shall then notify the governor
that a potential ground for removal exists.
Added by Acts 1989, 71st Leg., ch. 985, § 5, eff. Sept. 1, 1989.
Amended by Acts 1991, 72nd Leg., ch. 450, § 3, eff. Aug. 26,
1991.
§ 57.15. VACANCIES. (a) A member of the board vacates
the office if the member ceases to be a member of the field from
which he or she was appointed.
(b) A vacancy on the board shall be filled by the original
appointing authority for the remainder of the unexpired term.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979.
§ 57.16. EXPENSES. Members of the board serve without
compensation but are entitled to reimbursement for actual and
necessary expenses in attending meetings of the board or performing
other official duties authorized by the chairman.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979.
§ 57.17. OFFICERS. The board shall elect from among its
members a chairman, vice-chairman, and other officers that the
board considers necessary. The chairman and vice-chairman serve
for a term of one year and may be reelected.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979.
§ 57.18. MEETINGS. (a) The board may meet as often as
necessary, but shall meet at least twice a year.
(b) The board shall develop and implement policies that
provide the public with a reasonable opportunity to appear before
the board and to speak on any issue under the jurisdiction of the
corporation.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1989, 71st Leg., ch. 985, § 6, eff.
Sept. 1, 1989.
§ 57.19. PRESIDENT; PERSONNEL. (a) The board shall
appoint a president to serve as chief executive officer in
administering the corporation and carrying out the policies of the
board. The president serves at the will of the board.
(b) The board may appoint employees and may fix their
compensation and prescribe their duties.
(c) The board may delegate any of its powers to the
president and corporation employees.
(d) The president or the president's designee shall develop
an intra-agency career ladder program. The program shall require
intra-agency postings of all nonentry level positions concurrently
with any public posting.
(e) The president or the president's designee shall develop
a system of annual performance evaluations. All merit pay for
corporation employees must be based on the system established under
this subsection.
(f) The president or the president's designee shall prepare
and maintain a written policy statement to assure implementation of
a program of equal employment opportunity under which all personnel
transactions are made without regard to race, color, handicap, sex,
religion, age, or national origin. The policy statement must
include:
(1) personnel policies, including policies relating
to recruitment, evaluation, selection, appointment, training, and
promotion of personnel;
(2) a comprehensive analysis of the corporation's work
force that meets federal and state guidelines;
(3) procedures by which a determination can be made of
significant underuse in the corporation's work force of all persons
for whom federal or state guidelines encourage a more equitable
balance; and
(4) reasonable methods to appropriately address those
areas of significant underuse.
(g) A policy statement prepared under Subsection (f) of this
section must cover an annual period, be updated at least annually,
and be filed with the governor's office.
(h) The governor's office shall deliver a biennial report to
the legislature based on the information received under Subsection
(g) of this section. The report may be made separately or as part of
other biennial reports made to the legislature.
(i) The board shall adopt policies that clearly define the
respective responsibilities of the governing body of the
corporation and the staff of the corporation.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1989, 71st Leg., ch. 985, § 7, eff.
Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 450, § 4, eff. Aug. 26,
1991.
§ 57.20. PUBLIC INTEREST INFORMATION AND
COMPLAINTS. (a) The board shall prepare information of public
interest describing the functions of the board and corporation and
the procedures by which complaints are filed with and resolved by
the board. The corporation shall make the information available to
the public and appropriate state agencies.
(b) The board shall establish methods by which consumers and
service recipients are notified of the name, mailing address, and
telephone number of the corporation for the purpose of directing
complaints to the board or corporation.
(c) The corporation shall keep an information file about
each complaint filed with the corporation that the corporation has
authority to resolve.
(d) If a written complaint is filed with the corporation
that the corporation has authority to resolve, the corporation, at
least quarterly and until final disposition of the complaint, shall
notify the parties to the complaint of the status of the complaint
unless the notice would jeopardize an undercover investigation.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1989, 71st Leg., ch. 985, § 8, eff.
Sept. 1, 1989.
§ 57.21. PROGRAMS RELATED TO STUDENT FINANCIAL AID AND
COMPLETION OF POSTSECONDARY EDUCATION. (a) The corporation shall
take an active role in coordinating, facilitating, promoting, and
providing assistance and support to:
(1) programs designed to make available to the
residents of this state information concerning postsecondary
education awareness and the availability of student financial aid,
including the Federal Family Education Loan Program, and to assist
families in obtaining needed postsecondary education financing;
(2) programs designed to prevent student loan default;
and
(3) programs designed to increase student retention
and graduation rates in postsecondary education.
(b) The corporation shall coordinate its efforts under this
section with other entities, including the Texas Higher Education
Coordinating Board, the Texas Education Agency, professional,
educational, and civic associations, postsecondary educational
institutions that participate in the corporation's programs, and
lender advisory committees established under Section 57.461.
Added by Acts 1999, 76th Leg., ch. 967, § 4, eff. June 18, 1999.
§ 57.211. SUPPORT OF EDUCATIONAL PURPOSES. The
corporation may support educational purposes with the approval of
the board.
Added by Acts 1999, 76th Leg., ch. 967, § 4, eff. June 18, 1999.
§ 57.22. APPLICATION OF THE TEXAS NON-PROFIT CORPORATION
ACT. (a) The corporation is subject to the Texas Non-Profit
Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
Statutes), except that:
(1) the corporation may not make donations for the
public welfare or for charitable or scientific purposes or in aid of
war activities;
(2) the corporation is not required to file articles
of incorporation;
(3) the corporation is not subject to voluntary or
involuntary dissolution;
(4) the corporation may not be placed in receivership;
and
(5) the corporation is not required to make reports to
the secretary of state under Article 9.01 of that Act.
(b) Subsection (a)(1) does not prohibit the corporation
from supporting educational purposes under Section 57.211.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1995, 74th Leg., ch. 238, § 1, eff.
Sept. 1, 1995; Acts 1999, 76th Leg., ch. 967, § 5, eff. June 18,
1999.
§ 57.23. LIABILITIES OF THE CORPORATION. Liabilities
created by the corporation are not debts of the state and the
corporation may not secure any liability with funds or assets of the
state except as otherwise provided by law.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979.
§ 57.24. AUTHORITY TO PARTICIPATE IN OTHER
REVENUE-GENERATING ACTIVITIES; LIMITATIONS. (a) The
corporation may participate in a revenue-generating activity that
is consistent with the corporation's purposes if the board
determines that the revenue from the activity:
(1) is sufficient to cover the costs of the activity;
and
(2) may contribute to a reduction in the insurance
premium paid by students under Section 57.43 of this code.
(b) If, under Subsection (a) of this section, the board
authorizes the corporation to perform additional services, the
corporation may not require postsecondary educational institutions
or students to use those services unless required by state or
federal law.
Added by Acts 1989, 71st Leg., ch. 985, § 9, eff. Sept. 1, 1989.
Amended by Acts 1991, 72nd Leg., ch. 450, § 5, eff. Aug. 26,
1991; Acts 1995, 74th Leg., ch. 238, § 2, eff. Sept. 1, 1995.
SUBCHAPTER C. STUDENT LOANS
§ 57.41. GUARANTEED STUDENT LOANS. (a) The
corporation shall guarantee loans made to eligible borrowers by
eligible lenders as provided by the federal guaranteed student loan
program under the Higher Education Act of 1965, 20 U.S.C. § 1001
et seq., as amended.
(b) The corporation may prescribe the terms and conditions
on which the loans are to be guaranteed. In prescribing those terms
and conditions, the board shall take into consideration the need to
encourage lenders to make loans while at the same time maintaining
the fiscal integrity of the program.
(c) The corporation shall make loans to eligible students,
as a lender of last resort, under the following conditions:
(1) the borrower certifies and provides evidence to
the corporation that the borrower has made an application to at
least two qualified lenders and was unable to obtain a guaranteed
student loan from a commercial lender and is not aware of any
eligible lender in this state that is willing to make a guaranteed
student loan;
(2) the borrower also certifies to the corporation
that the borrower was unable to obtain a guaranteed student loan
from the Texas Higher Education Coordinating Board;
(3) the corporation certifies that it is not aware of
any eligible lender in this state that is willing to make a
guaranteed student loan; and
(4) the corporation must, to the extent a market is
available, sell loans made as last resort loans within a reasonable
period of time of the date of loan origination. This provision will
not apply to any loans that cannot be sold at par. The corporation
shall maintain a separate file showing the name and address of the
student receiving such a loan and the name and address of the
involved educational institution.
(d) The corporation may participate in revenue-generating
activities as provided for in Section 57.24 of this code.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1985, 69th Leg., ch. 64, § 1, eff.
Sept. 1, 1985; Acts 1989, 71st Leg., ch. 985, § 10, eff. Sept. 1,
1989; Acts 1991, 72nd Leg., ch. 450, § 6, eff. Aug. 26, 1991;
Acts 1999, 76th Leg., ch. 967, § 6, eff. June 18, 1999.
§ 57.42. REINSURANCE. The corporation may enter into an
agreement with the United States Department of Education for
reinsurance against loss under the loan program due to death,
disability, or default of the borrower.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1991, 72nd Leg., ch. 450, § 7, eff.
Aug. 26, 1991.
§ 57.43. INSURANCE PREMIUMS. The corporation may
impose and collect insurance premiums from eligible borrowers in an
amount not to exceed the maximum allowable under the Higher
Education Act of 1965, as amended.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1989, 71st Leg., ch. 985, § 11, eff.
Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 450, § 8, eff. Aug. 26,
1991; Acts 1999, 76th Leg., ch. 967, § 7, eff. June 18, 1999.
§ 57.44. ELIGIBLE BORROWERS. (a) In order to be
eligible for a loan to be guaranteed under this chapter, a person
must be an eligible borrower as provided under the Higher Education
Act of 1965, 20 U.S.C. § 1001 et seq., as amended.
(b) For a student borrower to be an eligible borrower, the
student borrower must:
(1) be accepted for enrollment or be in good standing,
as determined by the institution, at an eligible postsecondary
educational institution;
(2) be registered for or enrolled in at least one-half
the normal full-time course load, as determined by the institution;
and
(3) have executed a promissory note for a loan that is
eligible for reinsurance by the United States Department of
Education.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1991, 72nd Leg., ch. 450, § 9, eff.
Aug. 26, 1991.
§ 57.45. ELIGIBLE LENDERS. (a) In order to qualify as
an eligible lender under this subchapter, the lender must:
(1) be an eligible lender for purposes of the Higher
Education Act of 1965, as amended; and
(2) enter into an agreement with the corporation for
participation in the program.
(b) In contracting with the corporation, the eligible
lender shall agree to adhere to the lending requirements of the
corporation and to periodic review of guaranteed student loan
accounts as considered necessary by the corporation.
(c) Each eligible lender shall submit to the corporation at
the end of each fiscal year a report on the student loan accounts of
that lender.
(d) In accordance with federal and state law, the
corporation may provide, and charge a fee for, services to eligible
lenders necessary to encourage lender participation in the loan
program. Services for which the corporation charges a fee shall be
provided at the option of the lender.
(e) In order to be guaranteed by the corporation, a loan
made by an eligible lender must comply with all provisions of the
Higher Education Act of 1965, as amended, including provisions
relating to:
(1) limits on annual loan amounts;
(2) cumulative loan amount limits;
(3) maximum interest rates;
(4) grace periods;
(5) repayment terms; and
(6) deferment conditions.
(f) The corporation may suspend or revoke the eligibility of
a lender that the corporation determines is not in compliance with
this chapter.
(g) Loans guaranteed by the corporation may be assigned or
transferred by the holders thereof to any eligible lender as
provided by the Higher Education Act of 1965, as amended,
notwithstanding the state in which the principal place of business
of any such eligible lender is located. Any loan so assigned or
transferred shall continue to be guaranteed by the corporation,
and, in the event of default, the corporation shall pay the lender
or holder under the provisions of the Higher Education Act of 1965,
as amended.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1981, 67th Leg., p. 18, ch. 13, § 2,
eff. March 20, 1981; Acts 1989, 71st Leg., ch. 985, § 12, eff.
Sept. 1, 1989; Acts 1999, 76th Leg., ch. 967, § 8, eff. June 18,
1999.
§ 57.46. ELIGIBLE INSTITUTIONS. (a) In order to
qualify as an eligible institution under this subchapter, a
postsecondary educational institution must:
(1) be an eligible institution for purposes of the
Higher Education Act of 1965, as amended; and
(2) be eligible for reinsurance of guaranteed
loans by the United States Department of Education.
(b) An otherwise eligible postsecondary educational
institution may be located anywhere.
(c) The corporation may suspend or revoke the eligibility of
an institution that the corporation determines is not in compliance
with this chapter.
(d) An eligible institution may withhold the academic
transcript of a student borrower in default on a loan guaranteed
under the Higher Education Act of 1965, 20 U.S.C. § 1001 et seq.,
until notified by the loan holder that the borrower has entered into
a satisfactory repayment agreement.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1991, 72nd Leg., ch. 450, § 10, eff.
Aug. 26, 1991.
§ 57.461. POSTSECONDARY EDUCATIONAL INSTITUTIONS AND
LENDER ADVISORY COMMITTEES. (a) The corporation shall establish:
(1) an advisory committee that is composed of 15
members who represent the postsecondary educational institutions
that participate in the corporation's guaranteed student loan
program; and
(2) an advisory committee that is composed of 12
members including:
(A) one member who represents the Texas Higher
Education Coordinating Board; and
(B) 11 members who represent lenders that
participate in the corporation's guaranteed student loan program.
(b) The board shall appoint advisory committee members on
the recommendation of the president.
(c) The board may establish other advisory committees as the
board considers necessary.
(d) The board shall:
(1) specify each advisory committee's purpose and
duties; and
(2) require each committee to report to the board in a
manner specified by the board relating to each committee's
activities and work results.
Added by Acts 1989, 71st Leg., ch. 985, § 13, eff. Sept. 1, 1989.
Amended by Acts 1999, 76th Leg., ch. 967, § 9, eff. June 18,
1999.
§ 57.47. SUITS ON DEFAULT. (a) If a student borrower
defaults on a loan and the corporation is required to honor the
guarantee, the corporation or the Texas Higher Education
Coordinating Board shall bring suit against the defaulting party in
accordance with the requirements of the Higher Education Act of
1965, 20 U.S.C. § 1001 et seq., as amended.
(b) A suit against a defaulting party under this section may
be brought in the county in which the defaulting person resides, in
which the lender is located, or in Travis County.
(c) It is not a defense to a suit under this section that the
defaulting party was a minor at the time the promissory note was
executed or that the statute of limitations has expired.
(d) Notwithstanding any other law, if the corporation or the
Texas Higher Education Coordinating Board brings suit against a
defaulting party under this section, the corporation or the
coordinating board, as appropriate, shall pay 50 percent of the
filing fee or other costs of court taxed and collected in advance
that are in effect on the date on which the suit is filed. If the
defaulting borrower prevails in the suit filed under this section,
the corporation or the coordinating board, as appropriate, shall
pay the remaining 50 percent of the statutory filing fee on the date
of the final disposition of the suit. If the corporation or
coordinating board prevails in the suit:
(1) the judgment shall find the defaulting borrower
liable to the corporation or the coordinating board, as
appropriate, for the amount of the filing fee; and
(2) the corporation or coordinating board, as
appropriate, shall pay the remaining 50 percent of the statutory
filing fee not later than one week after the date on which the
defaulting borrower pays to the corporation or coordinating board,
as appropriate, the full amount, including the filing fee, for
which the borrower is liable to the corporation or coordinating
board.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1985, 69th Leg., ch. 871, § 1, eff.
Aug. 26, 1985; Acts 1989, 71st Leg., ch. 985, § 14, eff. Sept. 1,
1989; Acts 1991, 72nd Leg., ch. 450, § 11, eff. Aug. 26, 1991.
§ 57.471. APPOINTMENT OF MASTER. In any case under
Section 57.47 of this code, the court may refer the case to a master
in chancery. All matters relating to the appointment and service of
the master are governed by Rule 171, Texas Rules of Civil Procedure,
except that the case need not be exceptional as required by that
rule.
Added by Acts 1985, 69th Leg., ch. 871, § 2, eff. Aug. 26, 1985.
§ 57.48. PAYMENTS BY THE COMPTROLLER TO DEFAULTING
PERSONS PROHIBITED. (a) Except as provided by Subsection (g),
the corporation shall report to the comptroller the name of any
person who is in default on a loan guaranteed under this chapter.
The report must contain the information and be submitted in the
manner and with the frequency required by rules of the comptroller.
(b) Except as provided by this section, the comptroller, as
a ministerial duty, may not issue a warrant or initiate an
electronic funds transfer to a person who has been reported
properly under Subsection (a).
(c) Except as provided by this section, the comptroller may
not issue a warrant or initiate an electronic funds transfer to the
assignee of a person who has been reported properly under
Subsection (a) if the assignment became effective after the person
defaulted.
(d) If this section prohibits the comptroller from issuing a
warrant or initiating an electronic funds transfer to a person, the
comptroller may issue a warrant or initiate an electronic funds
transfer only as provided by this section to:
(1) the person's estate;
(2) the distributees of the person's estate; or
(3) the person's surviving spouse.
(e) This section does not prohibit the comptroller from
issuing a warrant or initiating an electronic funds transfer to a
person reported properly under Subsection (a) or to the assignee of
the person if the corporation subsequently and properly reports to
the comptroller that:
(1) the person is complying with an installment
payment agreement or similar agreement to eliminate the default,
unless the corporation subsequently and properly reports to the
comptroller that the person no longer is complying with the
agreement;
(2) the default is being eliminated by deductions of
money from the person's compensation under the garnishment
provisions of 20 U.S.C. Section 1095a, unless the corporation
subsequently and properly reports to the comptroller that the
default is no longer being eliminated by the deductions;
(3) the default has been eliminated; or
(4) the report of default was prohibited by Subsection
(g) or was otherwise erroneous.
(f) This section does not prohibit the comptroller from
issuing a warrant or initiating an electronic funds transfer to
pay:
(1) the compensation of a state officer or employee;
or
(2) the remuneration of an individual if the
remuneration is being paid by a private person through a state
agency.
(g) The corporation may not report a person under Subsection
(a) unless the corporation first provides the person with an
opportunity to exercise any due process or other constitutional or
statutory protection that must be accommodated before the
corporation may begin a collection action or procedure. The
comptroller may not investigate or determine whether the
corporation has complied with this prohibition.
(h) This section does not prohibit the comptroller from
issuing a warrant or initiating an electronic funds transfer if:
(1) the warrant or transfer would result in a payment
being made in whole or in part with money paid to the state by the
United States; and
(2) the state agency that administers the money
certifies to the comptroller that federal law:
(A) requires the payment to be made; or
(B) conditions the state's receipt of the money
on the payment being made.
(i) This section does not prohibit the comptroller from
issuing a warrant or initiating an electronic funds transfer to a
person reported properly under Subsection (a) or to the person's
assignee, the person's estate, the distributees of the person's
estate, or the person's surviving spouse if the corporation
consents to issuance of the warrant or initiation of the transfer.
(j) The comptroller may adopt rules and establish
procedures to administer this section.
(k) In this section:
(1) "Compensation" means base salary or wages,
longevity pay, hazardous duty pay, benefit replacement pay, or an
emolument provided in lieu of base salary or wages.
(2) "State agency" means a board, commission, council,
committee, department, office, agency, or other governmental
entity in the executive, legislative, or judicial branch of state
government. The term includes an institution of higher education
as defined by Section 61.003, other than a public junior or
community college.
(3) "State officer or employee" means an officer or
employee of a state agency.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1991, 72nd Leg., ch. 641, § 1, eff.
Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 449, § 20, eff. Sept. 1,
1993; Acts 1997, 75th Leg., ch. 1035, § 21, 22, eff. June 19,
1997; Acts 1999, 76th Leg., ch. 1467, § 1.01, eff. Jan. 1, 2000;
Acts 2001, 77th Leg., ch. 1158, § 5, eff. June 15, 2001.
§ 57.481. LOAN DEFAULT PREVENTION AND
REDUCTION. (a) In this section, "loan default rate" means the
rate at which student borrowers default on loans guaranteed by the
corporation as determined by the corporation in compliance with
federal guidelines.
(b) The corporation shall take an active role in
coordinating, facilitating, and providing technical assistance on
guaranteed student loan default prevention and reduction
initiatives and programs in the state and shall work with the
appropriate state agencies and other entities, including eligible
postsecondary educational institutions, eligible lenders,
servicers, secondary markets, the Texas Higher Education
Coordinating Board, the Central Education Agency, and state
professional and occupational licensing agencies.
(c) The corporation shall maintain a system of
communication among the appropriate state agencies and entities to
reduce loan default claims.
(d) The corporation shall:
(1) calculate the loan default rates for the
postsecondary educational institutions that participate in the
corporation's guaranteed student loan program; and
(2) semiannually notify the postsecondary educational
institutions of those loan default rates.
(e) The corporation after consultation with eligible
institutions and lenders and consistent with federal regulations
and policies shall establish a loan default rate for a
postsecondary educational institution or lender that, if exceeded,
requires the corporation to intervene as provided by Subsection (f)
of this section or permits the corporation to intervene as provided
by Subsection (g) of this section.
(f) If a postsecondary educational institution's loan
default rate exceeds the rate established for the institution under
Subsection (e) of this section, the corporation shall conduct
program evaluations for the institution or provide technical
assistance to the institution, or both.
(g) If a postsecondary educational institution's or
lender's loan default rate exceeds the rate established under
Subsection (e) of this section, the corporation may require the
institution or lender, as a condition of eligibility to participate
in the corporation's guaranteed student loan program, to take one
or more actions, including to require:
(1) educational institutions to set tuition and fees
refund policies for students who do not complete their course of
study that:
(A) are more beneficial to students; and
(B) encourage repayment of student loans;
(2) lenders to disburse loans to students in more
installments than required by federal guidelines, to the extent
permitted by federal law and federal guidelines; or
(3) lenders to notify in clear language the affected
postsecondary educational institutions and student borrowers if
student loans are assigned or transferred to another eligible
lender.
(h) Before the corporation may require a postsecondary
educational institution or lender to take any action under
Subsection (g) of this section, the proposed action must be
reviewed by the postsecondary educational institution or lender
advisory committee established under Section 57.461 of this code,
as appropriate.
Added by Acts 1989, 71st Leg., ch. 985, § 15, eff. Sept. 1, 1989.
§ 57.482. PAYMENTS BY A STATE AGENCY TO DEFAULTING
PERSONS PROHIBITED. (a) A state agency, as a ministerial duty,
may not use funds inside or outside the state treasury to pay a
person or the person's assignee if Section 57.48 prohibits the
comptroller from issuing a warrant or initiating an electronic
funds transfer to the person or assignee.
(b) A state agency that is prohibited by Subsection (a) from
making a payment to a person also is prohibited from paying any part
of that payment to:
(1) the person's estate;
(2) the distributees of the person's estate; or
(3) the person's surviving spouse.
(c) The comptroller may not reimburse a state agency for a
payment that the comptroller determines was made in violation of
this section.
(d) This section applies to a payment only if the
comptroller is not responsible under Section 404.046, 404.069, or
2103.003, Government Code, for issuing a warrant or initiating an
electronic funds transfer to make the payment.
(e) In this section, "state agency" has the meaning assigned
by Section 57.48.
Added by Acts 1999, 76th Leg., ch. 1467, § 1.02, eff. Jan. 1,
2000.
§ 57.49. COOPERATION OF STATE AGENCIES AND
SUBDIVISIONS. Each agency and political subdivision of the state
shall cooperate with the corporation in providing information to
the agency's or political subdivision's clients concerning student
financial aid, including information about default prevention.
Each agency and political subdivision shall provide information to
the corporation on request to assist the corporation in curing
delinquent loans and collecting defaulted loans.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1999, 76th Leg., ch. 967, § 10, eff.
June 18, 1999.
§ 57.491. LOAN DEFAULT GROUND FOR NONRENEWAL OF
PROFESSIONAL OR OCCUPATIONAL LICENSE. (a) In this section:
(1) "License" means a certificate or similar form of
permission issued or renewed by a licensing agency and required by
law to engage in a profession or occupation.
(2) "Licensee" means a person to whom a licensing
agency issues a license.
(3) "Licensing agency" means a board, commission,
department, or other agency in the executive branch of state
government that issues or renews a license.
(b) The corporation shall identify the licensing agencies
subject to this section and provide written notice to those
agencies of the requirements prescribed by this section. Only
those licensing agencies that the corporation identifies and that
receive such notice are required to carry out this section.
(c) The corporation periodically shall:
(1) identify the persons who are in default on loans
guaranteed by the corporation; and
(2) provide a written list of the names of those
persons to the licensing agencies.
(d) A person who is in default on a loan may enter an
agreement with the corporation for repayment of a defaulted loan as
required under this section. The corporation shall provide the
person with a certificate certifying that the person has entered a
repayment agreement on the defaulted loan.
(e) A licensing agency shall not renew the license of a
licensee whose name is on the list provided by the corporation under
Subsection (c) of this section unless:
(1) the renewal is the first renewal following the
agency's receipt of the list including the licensee's name among
those in default; or
(2) the licensee presents to the agency a certificate
issued by the corporation certifying that:
(A) the licensee has entered a repayment
agreement on the defaulted loan; or
(B) the licensee is not in default on a loan
guaranteed by the corporation.
(f) A licensing agency may issue an initial license to a
person whose name is on the list provided by the corporation under
Subsection (c) of this section and who meets all other
qualifications for licensure, but shall not renew the license
unless the person presents to the agency a certificate issued by the
corporation certifying that:
(1) the licensee has entered a repayment agreement on
the defaulted loan; or
(2) the licensee is not in default on a loan guaranteed
by the corporation.
(g) A licensing agency shall not renew the license of a
licensee who defaults on a repayment agreement unless the person
presents to the agency a certificate issued by the corporation
certifying that:
(1) the licensee has entered another repayment
agreement on the defaulted loan; or
(2) the licensee is not in default on a loan guaranteed
by the corporation or on a repayment agreement.
(h) A licensing agency shall provide written notice of the
nonrenewal policies established under Subsections (e), (f), and (g)
of this section to each applicant for a license or for renewal of a
license. The corporation shall provide written notice of those
same policies on each loan application form provided by the
corporation and on each promissory note signed by a borrower.
Failure to provide the notice required by this subsection does not
affect the default status of a borrower or the prohibitions on
renewal of a license held by a person in default.
(i) A licensing agency shall provide an opportunity for a
hearing to a licensee before the agency takes action concerning the
nonrenewal of a license under this section.
(j) Each licensing agency shall adopt any rules necessary to
carry out the licensing agency's duties under this section.
(k) The board shall establish procedures to carry out the
corporation's duties under this section.
(l) This section does not apply to the State Securities
Board.
Added by Acts 1989, 71st Leg., ch. 985, § 16, eff. Sept. 1, 1989.
§ 57.50. NONDISCRIMINATION. Neither the corporation
nor an eligible lender may discriminate against an eligible student
in making a loan or loan guarantee on the basis of race, age,
religion, or sex.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1989, 71st Leg., ch. 985, § 17, eff.
Sept. 1, 1989.
SUBCHAPTER D. FISCAL PROVISIONS
§ 57.71. RESERVE AND OPERATING FUNDS. The corporation
shall establish reserve and operating funds in accordance with
Section 422 of the Higher Education Act of 1965 (20 U.S.C. Section
1072), as amended.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1999, 76th Leg., ch. 967, § 11, eff.
June 18, 1999.
§ 57.75. TAX EXEMPTION. All income, property, and other
assets of the corporation are exempt from taxation by the state and
political subdivisions of the state.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979.
§ 57.76. ANNUAL AUDIT. (a) At least once each year the
corporation shall have a fiscal audit performed by a certified
public accountant.
(b) A copy of the annual audit shall be submitted to the
state auditor for review. The state auditor may:
(1) examine any working papers from the annual audit;
and
(2) conduct a separate audit if, after reviewing the
independent audit, the state auditor considers a separate audit
necessary.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1985, 69th Leg., ch. 871, § 4, eff.
Aug. 26, 1985; Acts 1989, 71st Leg., ch. 985, § 18, eff. Sept. 1,
1989.
§ 57.761. INTERNAL AUDITOR. (a) The president shall
appoint an internal auditor for the corporation. The appointment
of an internal auditor must be approved by the board.
(b) The internal auditor shall report to the president. The
board may require the internal auditor to submit directly to the
board certain reports specified by the board.
(c) The board or a board committee, as designated by the
board, shall meet with the internal auditor on a regular basis.
(d) The internal auditor shall examine the corporation's
system of internal controls and its system of identifying fixed and
variable costs, including administrative costs.
Added by Acts 1989, 71st Leg., ch. 985, § 19, eff. Sept. 1, 1989.
Amended by Acts 1995, 74th Leg., ch. 238, § 3, eff. Sept. 1,
1995.
§ 57.77. ANNUAL REPORT. (a) The corporation annually
shall prepare a written report on the financial and program
operations of the corporation. The report shall include the
audited financial statement for the year, the number and dollar
value of loans guaranteed during the year, and the total dollar
value of outstanding guaranteed loans.
(b) The corporation shall submit the annual report to the
governor, lieutenant governor, speaker of the house of
representatives, comptroller of public accounts, and commissioner
of higher education.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1997, 75th Leg., ch. 1423, § 5.14,
eff. Sept. 1, 1997.
§ 57.78. INVESTMENTS. All money of the corporation may
be invested in accordance with Chapter 2256, Government Code.
Added by Acts 1979, 66th Leg., p. 1711, ch. 706, § 1, eff. Aug.
27, 1979. Amended by Acts 1999, 76th Leg., ch. 967, § 12, eff.
June 18, 1999.
