Bill Text: TX SB44 | 2025-2026 | 89th Legislature | Introduced

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Bill Title: Relating to the establishment and operation of the Texas B-On-time student loan program; authorizing a fee.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-11-12 - Filed [SB44 Detail]

Download: Texas-2025-SB44-Introduced.html

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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.