Proposed Rules Title 19

TITLE 19.EDUCATION

PART 1. TEXAS HIGHER EDUCATION COORDINATING BOARD

SUBCHAPTER QQ. PROVISIONS FOR NOTICE TO STUDENTS REGARDING TUITION SET ASIDE FOR FINANCIAL ASSISTANCE

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new §§21.2230 - 21.2232, concerning Provisions for Notice to Students Regarding Tuition Set Aside for Financial Assistance. Specifically, the new sections implement Senate Bill 1304, 81st Texas Legislature, which amended the Texas Education Code by adding §56.014. The new sections are intended to prescribe minimum standards for institutions of higher education to use in providing notices to students regarding the specific amount of each student's designated tuition required to be set aside for financial assistance.

Ms. Lois Hollis, Special Assistant to the Deputy Commissioner, has determined that for each year of the first five years the sections are in effect, there will be no fiscal implications to state or local government.

Ms. Hollis has also determined that for each year of the first five years the new sections are in effect, the public benefit anticipated as a result of administering the sections will be better consumer information on the amount of designated tuition used for financial aid that is attributable to each student. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the sections as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Lois Hollis, P.O. Box 12788, Austin, Texas 78711, (512) 427-6465, lois.hollis@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The new sections are proposed under the Texas Education Code, §56.014, which provides the Coordinating Board with the authority to prescribe minimum standards for the implementation of this section.

The new sections affect the Texas Education Code, §56.014.

§21.2230.Authority and Purpose.

(a) Authority. Authority for this subchapter is provided in the Texas Education Code, Chapter 56, Subchapter B, §56.014, Notice to Students Regarding Tuition Set Aside for Financial Assistance.

(b) Purpose. The purpose is to prescribe minimum standards for institutions of higher education to use in providing notices to students regarding the specific amount of each student's designated tuition required to be set aside for financial assistance.

§21.2231.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Board--The Texas Higher Education Coordinating Board.

(2) Board Staff--The staff of the Texas Higher Education Coordinating Board.

(3) Commissioner--The Commissioner of Higher Education. As used in this subchapter, "Commissioner" means the agency acting through its executive and his or her designees, staff, or agents.

(4) Institution of Higher Education--Any public technical institute, public junior college, public senior college or university, medical or dental unit, public state college, or other agency of higher education as defined in Texas Education Code, §61.003.

§21.2232.Notice to Students.

(a) Each institution of higher education that is required to set aside a portion of a student's designated tuition to provide financial assistance shall provide to each student who pays designated tuition a notice regarding the specific amount that is required to be set aside in accordance with the uniform standards prescribed by the Commissioner.

(b) The institution shall conform to the uniform standards prescribed by the Commissioner and must include the notice with one of the following:

(1) the student's tuition bill or billing statement, if the institution provides the student with a printed bill or statement for the payment of tuition;

(2) the student's tuition receipt, if the institution provides the student with a printed receipt for the payment of tuition; or

(3) a statement prominently displayed in an e-mail, if the institution does not provide the student with a printed tuition bill, statement, or receipt.

(c) Institutions of higher education shall comply with the standards and requirements not later than the 2010 spring semester.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on August 12, 2009.

TRD-200903543

Bill Franz

General Counsel

Texas Higher Education Coordinating Board

Proposed date of adoption: October 29, 2009

For further information, please call: (512) 427-6114

SUBCHAPTER RR. TEXAS ARMED SERVICES SCHOLARSHIP PROGRAM

19 TAC §§21.2240 - 21.2250

The Texas Higher Education Coordinating Board (Coordinating Board) proposes new §§21.2240 - 21.2250, concerning the Texas Armed Services Scholarship Program. The new sections implement House Bill 3452, 81st Texas Legislature, which amended the Texas Education Code by adding §§61.9771 - 61.9776. Specifically, the new sections describe the authority and purpose of the program, provide definitions of terms used, outline program award amounts and limits, and set forth requirements whereby elected officials may appoint students to receive a scholarship. The new sections also outline initial award eligibility and agreement requirements, describe the requirement that a recipient must sign a promissory note acknowledging the conditional nature of the scholarship, describe the eligibility requirements for continued awards, and outline the circumstances under which a scholarship may be converted to a loan. The new sections also describe the repayment terms of loans, the actions that may be taken by the Board to enforce collection of a scholarship converted to a loan, and the circumstances under which a recipient may be exempted from the repayment and/or service obligations of the program.

Mr. Dan Weaver, Assistant Commissioner for Business and Support Services, in keeping with the Legislative Budget Board's fiscal note for House Bill 3452, has determined that for each year of the first five years the sections are in effect there will be no significant fiscal implications to state or local government as a result of enforcing or administering the rules.

Mr. Weaver has also determined that for each year of the first five years the new sections are in effect the public benefit anticipated as a result of administering the sections will be a set of rules for the Texas Armed Services Scholarship Program, making it easier for the participants to understand the program's unique requirements. There is no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the sections as proposed. There is no impact on local employment.

Comments on the proposal may be submitted to Dan Weaver, P.O. Box 12788, Austin, Texas 78711, (512) 427-6165, dan.weaver@thecb.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

The new sections are proposed under the Texas Education Code, §61.9771 which provides the Coordinating Board with the authority to adopt any rules necessary to administer Texas Education Code, Chapter 61, Subchapter FF.

The new sections affect Texas Education Code, §§61.9771 - 61.9776.

§21.2240.Authority and Purpose.

(a) Authority. Authority for this subchapter is provided in the Texas Education Code, Subchapter FF, Texas Armed Services Scholarship Program. These rules establish procedures to administer the subchapter as prescribed in the Texas Education Code, §§61.9771 - 61.9776.

(b) Purpose. The purpose of the Texas Armed Services Scholarship Program is to encourage students to become members of the Texas Army National Guard, members of the Texas Air Force National Guard, and commissioned officers in any branch of the armed services of the United States.

§21.2241.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Board--The Texas Higher Education Coordinating Board.

(2) Institution of Higher Education--As defined in Texas Education Code, §61.003(8), and private or independent institutions of higher education as defined in Texas Education Code, §61.003(15).

(3) Commissioner--The Commissioner of Higher Education.

(4) Loan--A Texas Armed Services Scholarship that has become a loan because the conditions of the scholarship agreement have not been met.

(5) Recipient--A person who has received a Texas Armed Services Scholarship.

(6) Freshman--A student who has not completed an academic year in a public or private institution of higher education after receiving a high school diploma or a General Educational Diploma or its equivalent.

§21.2242.Award Amount.

(a) The amount of a conditional Texas Armed Services Scholarship in an academic year will be the lesser of:

(1) $15,000;

(2) The amount available for each scholarship from appropriations that may be used for scholarships for this program for that academic year; or

(3) $15,000 less any amount paid to a student by the branch of the armed services of the United States during an academic year for which the student receives a Texas Armed Services Scholarship.

(b) A student may receive a scholarship for four of the five years allowed for graduation.

§21.2243.Requirements for Appointment by Elected Officials.

(a) Each year the governor and the lieutenant governor may each appoint two students, and each state senator and each state representative may appoint one student to receive an initial conditional Texas Armed Services Scholarship.

(b) Appointments must be reported to the Board by the deadline established by the Commissioner.

(1) Is on track to graduate high school with the Distinguished Achievement Program (DAP) or the International Baccalaureate Program (IB);

(2) Has a current high school GPA of 3.0 or higher;

(3) Achieved a college readiness score on the SAT (1590) or ACT (23);

(4) Is currently ranked in the top one-third of the prospective high school graduating class.

§21.2244.Initial Award Eligibility and Agreement Requirements.

To receive an initial conditional scholarship award through the Texas Armed Services Scholarship Program, a selected student must:

(1) Be enrolled as a freshman in a Texas public or private institution of higher education, as certified by the institution;

(2) Enroll in and be a member in good standing of a Reserve Officers' Training Corps (ROTC) program while enrolled in the institution, as certified by the institution; and

(3) Enter into a written agreement with the Board agreeing to:

(A) Complete four years of ROTC training;

(B) Graduate no later than five years after the date the student first enrolls in a Texas public or private institution of higher education after having received a high school diploma or a General Educational Diploma or its equivalent;

(i) A four-year commitment to be a member of the Texas Army or Air Force National Guard; or

(ii) A contract to serve as a commissioned officer in any branch of the armed services of the United States;

(D) Meet the physical examination requirements and all other prescreening requirements of the Texas Army or Air Force National Guard or the branch of the armed services with which the student enters into a contract; and

(E) Repay the scholarship according to the terms of the promissory note if the student fails to meet the requirements described in §21.2247 of this title (relating to Conversion of the Scholarship to a Loan).

§21.2245.Promissory Note.

The Board shall require a person who receives a scholarship to sign a promissory note acknowledging the conditional nature of the scholarship and promising to repay the amount of the scholarship plus applicable interest, late charges, and any collection costs, including attorneys' fees, if the person fails to meet the conditions of the scholarship.

§21.2246.Eligibility for Continued Awards.

To continue to receive an annual conditional Texas Armed Services Program Scholarship, the student must:

(1) Maintain satisfactory academic progress as determined by the institution of higher education in which the student is enrolled;

(2) Continue to be a member of a Reserve Officers' Training Corps (ROTC) program; and

(3) Not have earned a baccalaureate degree or a cumulative total of 150 credit hours, including transferred hours, as verified by the recipients' institution of higher education.

§21.2247.Conversion of the Scholarship to a Loan.

(a) A scholarship will become a loan if the recipient:

(1) Fails to maintain satisfactory academic progress as required by the institution's ROTC program for continued participation in that program;

(2) Fails to fulfill any of the terms of the Texas Armed Services Scholarship agreement; or

(3) Fails to fulfill one of the following:

(A) a four-year commitment to be a member of the Texas Army National Guard;

(B) a four-year commitment to be a member of the Texas Air Force National Guard; or

(b) If a scholarship recipient requires a temporary leave of absence from the institution and/or the ROTC program for personal reasons or to provide service for the Texas Army or Air Force National Guard for fewer than twelve months, the Board may agree to not convert the scholarship to a loan during that time.

(c) If a recipient is required to provide more than twelve months of service in the Texas Army or Air Force National Guard as a result of a national emergency, the Board shall grant that recipient additional time to meet the graduation and service requirements specified in the Texas Armed Services Scholarship agreement.

§21.2248.Repayment of Loans.

(a) A Texas Armed Services Scholarship is considered a loan on the date the recipient fails to meet the conditions of the scholarship; the loan amount must be repaid, plus interest accrued.

(b) The interest rate charged on the Texas Armed Services Loans shall be the same rate charged for a College Access Loan at the time the funds were disbursed. Interest shall begin to accrue on the date the scholarship is converted to a loan.

(c) The total amount of principal, interest, late charges, and any costs of collection that accrue over the life of the loans are to be repaid in installments over a period of not more than 15 years after the date the scholarship becomes a loan.

(d) A recipient shall begin making payments six months after the date the scholarship becomes a loan.

(e) The minimum monthly payment amount required by any repayment plan is $100, or an amount required to repay the loan within 15 years, whichever is greater.

(f) A charge of 5 percent of the scheduled monthly payment amount or five dollars ($5), whichever is less, shall be assessed if the past due amount is not received within 20 days of the scheduled due date. These charges shall be collected for late payment of all sums due and payable and shall be taken out of the next payment received by the Board.

(g) In the case of delinquent accounts, the Commissioner may authorize the assessment of charges to cover costs necessary to collect the loan.

(h) An education deferment is available to any recipient whose loan is not in a default status and who provides the Board documentation of enrollment as at least a half-time student.

(i) The Commissioner may grant periods of forbearance in the form of postponed or reduced payments for unusual financial hardship if the Board receives a written request stating the circumstances that merit such consideration.

§21.2249.Enforcement of Collection.

(a) When a scholarship recipient fails to make as many as five monthly payments due in accordance with the established repayment schedule for a scholarship which has become a loan, the entire unpaid balance shall become due and payable immediately.

(b) When as many as six payments have been missed, the loan(s) will be considered to be in default, and the Office of the Attorney General, at the request of the Commissioner, may file suit for the unpaid balance plus court costs and attorneys' fees.

(c) The institution of higher education may not release an official certified copy of the official records of a scholarship recipient, nor may any recipient re-register for classes at the institution if Board reports made available to the institution state that the loan is in a delinquent status. The Commissioner must approve exceptions to this requirement in advance of the institution's release of an official certified copy of the records or of the recipient's re-registration.

(d) The Board shall notify the Comptroller of Public Accounts when a recipient's loan has become 90 days or more past due, resulting in the non-issuance of certain state warrants.

§21.2250.Exemption and Cancellation.

(a) The recipient shall be exempt from the requirement to repay the Texas Armed Services loan if the person is unable to meet the obligations of the agreement solely as a result of physical inability and provides a physician's certification and/or other appropriate documentation to the satisfaction of the Board.

(b) The Board shall cancel a recipient's loan upon the death of the recipient unless the debt was reduced to judgment before the death occurred.

(c) The Board may cancel a recipient's service and/or repayment obligation if funding for the Texas Armed Services Scholarship program is discontinued while the recipient continues to meet eligibility requirements.