SB444: Bill Text

SB444,17,22 39.54 Student lending transparency. (1) In this section, “institution of higher education" means an institution or college campus within the University of Wisconsin System, a technical college within the technical college system, a tribally controlled college, or a private, nonprofit institution of higher education located in this state that provides an educational program for which the institution awards an associate degree or higher or provides a program that is acceptable toward such a degree.

SB444,17,25 (2) Each institution of higher education shall provide to a prospective or newly accepted student and to the student's parents clearly outlined and easy-to-understand information pertaining to all of the following:

SB444,18,1 (a) The total cost of attendance at the institution of higher education.

SB444,18,6 (b) The approximate or, if known, the actual total amount of financial aid that the student would receive from the institution of higher education, and the approximate or, if known, the actual total amount of student loan debt that the student would accumulate, over the course of 4 years if the student were to attend the institution of higher education for 4 years.

SB444,18,9 (c) Student loan rates, repayment plans, default rates, and the actual monthly payment that would be required to pay the student loan debt described in par. (b) when the loan becomes due.

SB444,18,12 (3) Each institution of higher education shall create on its Internet site a link to that portion of the department of financial institutions' Internet site created under s. 224.30 (6) (c) and (d).

SB444,36 Section 36 . 39.56 of the statutes is created to read:

SB444,18,18 39.56 Loan counseling. (1) Definition. In this section, “institution of higher education" means an institution or college campus within the University of Wisconsin System, a technical college under ch. 38, or any private, nonprofit, educational institution located in this state that provides an educational program for which it awards an associate degree or higher.

SB444,18,22 (2) Applicability. This section applies to any student loan offered by an institution of higher education or a private lender or recommended to a student by an institution of higher education, other than a federally funded, federally insured, or federally guaranteed loan for which counseling is required by 20 USC 1092.

SB444,19,5 (3) Entrance counseling. (a) Before a student enters into a student loan agreement, an institution of higher education shall provide the student with comprehensive information on the terms and conditions of a loan and the responsibilities the student has with respect to the loan. The institution shall provide the information during a counseling session conducted in person, on a written form provided to the student that the student signs and returns, or online, with the student acknowledging receipt of the information. The information provided shall include all of the following:

SB444,19,7 1. To the extent practicable, the effect of accepting the loan to be disbursed on the eligibility of the borrower for other forms of student financial assistance.

SB444,19,9 2. How interest accrues and is capitalized during periods when the interest is not paid by the borrower.

SB444,19,12 3. The definitions of full-time and half-time enrollment at the institution of higher education, during regular terms and intersession terms, if applicable, and the consequences of not maintaining full-time or half-time enrollment.

SB444,19,15 4. The importance of contacting the appropriate office at the institution of higher education if the borrower withdraws before completing his or her program of study so that the institution can provide counseling under sub. (4).

SB444,19,17 5. Sample monthly repayment amounts, based on a range of levels of indebtedness.

SB444,19,20 6. The obligation of the borrower to repay the full amount of the loan, irrespective of whether the borrower completes his or her program of study at the institution.

SB444,19,22 7. The likely consequences of default on the loan, including adverse credit reports, delinquent debt collection procedures, and litigation.

SB444,19,24 8. Whether the student has reached the limit on his or her federal student loan opportunities.

SB444,20,3 9. The name of, and contact information for, an individual the borrower may contact if he or she has any questions about the borrower's rights and responsibilities or the terms and conditions of the loan.

SB444,20,8 10. How a student or any member of the public may file a complaint about a lender with the federal Consumer Financial Protection Bureau by calling a toll-free telephone number, or by completing a complaint form, which may be obtained on the bureau's Internet site. The institution of higher education shall also include the toll-free telephone number and Internet site address of the bureau.

SB444,20,10 (b) In conjunction with providing information under par. (a), the institution of higher education shall also do all of the following:

SB444,20,13 1. Clearly distinguish private loans from federal loans in individual financial aid awards by stating, for any private loans included by the institution as part of the institution's award package, all of the following:

SB444,20,14 a. Whether the rate is fixed or variable.

SB444,20,16 b. An explanation that private student loan lenders can offer variable interest rates that can increase or decrease over time, depending on market conditions.

SB444,20,20 c. An explanation that private student loans have a range of interest rates and fees and students should determine the interest rate of, and any fees associated with, the private student loan included in their financial aid award package before accepting the loan.

SB444,20,23 d. An explanation that students should contact the lender of the private student loan or their institution's financial aid office if they have any questions about a private student loan.

SB444,20,25 e. An explanation that the interest rate on a private student loan may depend on the borrower's credit rating.

SB444,21,4 2. If the institution of higher education provides a private loan lender list, provide general information about the loans available through the lender and disclose the basis for each lender's inclusion on the list. The institution shall also disclose with the list that the student may choose any lender.

SB444,21,10 (c) 1. A lender may not accept a final and complete application for a private student loan from an applicant, or assess any fees upon an applicant, without first receiving certification from the applicant's institution of higher education that the applicant has received counseling from the institution under pars. (a) and (b) and that the counseling was conducted in person, unless the certification specified that the applicant elected to receive the counseling in a manner other than in person.

SB444,21,16 2. The certification required by subd. 1. shall be signed by the applicant and the institutional counselor, and shall include the date of the counseling and the name, address, and telephone number of both the counselor and the applicant. An electronic facsimile copy of the counseling certification satisfies the requirement under this subdivision. The lender shall maintain the certification in an accurate, reproducible, and accessible format for the term of the student loan.

SB444,21,20 (4) Exit counseling. (a) As close as practicable to the date that a student graduates from, transfers from, withdraws from, or otherwise completes his or her program of study at the institution of higher education, the institution shall provide the student with information relating to all of the following:

SB444,21,24 1. Repayment plans that are available, including a description of the different features of each plan and sample information showing the average anticipated monthly payments, and the difference in interest paid and total payments, under each plan.

SB444,22,2 2. Debt management strategies designed to facilitate the repayment of indebtedness.

SB444,22,4 3. The options to prepay each loan, pay each loan on a shorter schedule, or change repayment plans.

SB444,22,6 4. The likely consequences of default on the loan, including adverse credit reports, delinquent debt collection procedures, and litigation.

SB444,22,7 5. The effects of consolidation on a borrower's underlying loan benefits.

SB444,22,8 6. Grace periods, loan forgiveness, cancellation, and deferment opportunities.

SB444,22,9 7. The borrower benefit programs of different lenders.

SB444,22,10 8. The tax benefits that may be available to borrowers.

SB444,22,11 9. How to enroll in income-based repayment.

SB444,22,14 (b) With respect to a student who leaves an institution of higher education without the knowledge of the institution, the institution shall attempt to provide the information described in par. (a) to the student in writing.

SB444,22,18 (5) Fee. An institution of higher education may assess a reasonable fee to the lender to defray the cost of counseling under this section in an amount not exceeding $50. The board and the department of financial institutions shall jointly promulgate rules to implement and administer this subsection.

SB444,37 Section 37 . 40.02 (54) (n) of the statutes is created to read:

SB444,22,20 40.02 (54) (n) The Wisconsin Student Loan Refinancing Authority.

SB444,38 Section 38 . 70.11 (38v) of the statutes is created to read:

SB444,22,25 70.11 (38v) Wisconsin Student Loan Refinancing Authority. All property owned by the Wisconsin Student Loan Refinancing Authority, provided that use of the property is primarily related to the purposes of the Wisconsin Student Loan Refinancing Authority.

SB444,39 Section 39. 77.54 (9a) (a) of the statutes is amended to read:

SB444,23,5 77.54 (9a) (a) This state or any agency thereof, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Wisconsin Student Loan Refinancing Authority, and the Fox River Navigational System Authority.

SB444,40 Section 40 . 100.45 (1) (dm) of the statutes is amended to read:

SB444,23,16 100.45 (1) (dm) “State agency" means any office, department, agency, institution of higher education, association, society, or other body in state government created or authorized to be created by the constitution or any law which is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Health and Educational Facilities Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Wisconsin Student Loan Refinancing Authority, and the Fox River Navigational System Authority.

SB444,41 Section 41 . 224.30 (6) of the statutes is created to read:

SB444,23,18 224.30 (6) Student lending transparency. (a) In this subsection:

SB444,23,19 1. “Higher education expenses" includes all of the following:

SB444,23,20 a. Tuition and fees.

SB444,23,21 b. Books and supplies.

SB444,23,22 c. Room and board.

SB444,23,25 2. “Private lending institution" means any private entity that by itself or through an affiliate makes available student loans to pay for or finance higher education expenses.

SB444,24,2 3. “Private student loan" means a loan issued by a private lending institution for the purpose of paying for or financing higher education expenses.

SB444,24,4 4. “Student borrower" means any individual who borrows money from a private lending institution to finance higher education expenses.

SB444,24,7 (b) The department shall compile data related to private student loans for the purpose of comparing private lending institutions' student loan interest rates and repayment plans, including all of the following:

SB444,24,8 1. Policies relating to deferment and forbearance.

SB444,24,9 2. Loan default policies and penalties.

SB444,24,12 3. Any other information that the department deems relevant for the purpose of creating a list of private lending institutions that provide the lowest rates and best repayment options on student loans.

SB444,24,15 (c) 1. Using the data compiled under par. (b), the department shall create and maintain a list of private lending institutions that provide the lowest rates and best repayment options on student loans.

SB444,24,21 2. In addition to the list under subd. 1., the department shall compile a list of the 10 best private lending institutions based on rates and policies that are most favorable to the student borrower. The department may also consider the private lending institutions' policies for allowing a student borrower to borrow more than 10 percent over the student borrower's total cost of higher education expenses when determining if a private lending institution should be placed on this list.

SB444,25,3 (d) The department shall place the lists created and compiled under par. (c) at an easily accessible location on the department's Internet site. The department shall update its Internet site on a monthly basis to ensure that the student loan information in these lists is current and accurate. Information pertaining to private lending institutions that do not make the list compiled under par. (c) 2. shall also be posted on the department's Internet site and those private lending institutions that provide the worst rates and strictest repayment options shall be clearly indicated.

SB444,25,6 (e) The department shall make any list or other data under this subsection that appears on the department's Internet site available to be linked as provided in ss. 39.28 (7) and 39.54 (3).

SB444,25,8 (f) The department may satisfy its duties under this subsection through a designee or 3rd-party contractor.

SB444,42 Section 42 . 230.03 (3) of the statutes is amended to read:

SB444,25,19 230.03 (3) “Agency" means any board, commission, committee, council, or department in state government or a unit thereof created by the constitution or statutes if such board, commission, committee, council, department, unit, or the head thereof, is authorized to appoint subordinate staff by the constitution or statute, except the Board of Regents of the University of Wisconsin System, a legislative or judicial board, commission, committee, council, department, or unit thereof or an authority created under subch. II of ch. 114 or under ch. 231, 232, 233, 234, 237, 238, 239, or 279. “Agency" does not mean any local unit of government or body within one or more local units of government that is created by law or by action of one or more local units of government.

SB444,43 Section 43 . Chapter 239 of the statutes is created to read:

SB444,25,21 Chapter 239

SB444,25,23 Wisconsin Student Loan REFINANCING Authority

SB444,25,24 239.01 Definitions. In this chapter:

SB444,25,25 (1) “Authority" means the Wisconsin Student Loan Refinancing Authority.

SB444,26,1 (2) “Board" means the governing board of the authority.

SB444,26,2 (3) “Qualified education loan" has the meaning given in 26 USC 221 (d).

SB444,26,6 239.02 Creation and organization of authority. (1) (a) There is created an authority, which is a public body corporate and politic, to be known as the “Wisconsin Student Loan Refinancing Authority." The members of the board shall consist of all of the following:

SB444,26,7 1. One member of the majority party in each house of the legislature.

SB444,26,8 2. One member of the minority party in each house of the legislature.

SB444,26,11 3. One undergraduate student enrolled at least half-time and in good academic standing at an institution within the University of Wisconsin System who is at least 18 years old and a resident of this state.

SB444,26,13 4. One student enrolled at least half-time and in good academic standing at a technical college who is at least 18 years old and a resident of this state.

SB444,26,16 5. One undergraduate student enrolled at least half-time and in good academic standing at a private, nonprofit institution of higher education located in this state who is at least 18 years old and a resident of this state.

SB444,26,22 6. Two members who have at least 10 years experience in making qualified education loans or loan refinancing, but any person having a financial interest in or whose employer is primarily engaged in the business of making qualified education loans is not eligible for appointment under this subdivision, and any member appointed under this subdivision who acquires such an interest while serving as a member shall resign from the board.

SB444,26,24 (b) 1. The members specified in par. (a) 1. and 2. shall be appointed as are the members of standing committees in their respective houses.

SB444,27,2 2. The members specified in par. (a) 3. to 5. shall be nominated by the governor, and with the advice and consent of the senate appointed, for 2-year terms.

SB444,27,4 3. The members specified in par. (a) 6. shall be nominated by the governor, and with the advice and consent of the senate appointed, for 3-year terms.

SB444,27,10 (2) If a student member of the board appointed under sub. (1) (a) 3. to 5. loses his or her student status upon which the appointment was based, he or she ceases to be a member of the board upon the appointment of a qualified successor to the board. A student member who loses his or her student status solely because he or she graduates from an institution of higher education may complete his or her current term on the board.

SB444,27,16 (3) The members of the board shall annually elect a chairperson and may elect other officers as they consider appropriate. A majority of the members of the board constitutes a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, notwithstanding the existence of any vacancies. Action may be taken by the board upon a vote of a majority of the voting members present.