SB444: Bill Text

LRB-0278/2

ARG:amn

2019 - 2020 LEGISLATURE

2019 Senate BILL 444

September 23, 2019 - Introduced by Senators Hansen, Ringhand, Bewley, Carpenter, Johnson, Larson, Risser, Shilling, Smith, L. Taylor and Wirch, cosponsored by Representatives Shankland, Anderson, Billings, Bowen, Brostoff, Crowley, Fields, Goyke, Hebl, Milroy, Ohnstad, Pope, Riemer, Sargent, Sinicki, Subeck, C. Taylor and Zamarripa. Referred to Committee on Universities, Technical Colleges, Children and Families.

SB444,1,10 An Act to amend 13.172 (1), 13.48 (13) (a), 13.62 (2), 13.94 (4) (a) 1., 13.95 (intro.), 16.002 (2), 16.004 (4), 16.004 (5), 16.004 (12) (a), 16.045 (1) (a), 16.15 (1) (ab), 16.41 (4), 16.417 (1) (b), 16.52 (7), 16.528 (1) (a), 16.53 (2), 16.54 (9) (a) 1., 16.765 (1), 16.765 (2), 16.765 (5), 16.765 (6), 16.765 (7) (intro.), 16.765 (7) (d), 16.765 (8), 16.85 (2), 16.865 (8), 77.54 (9a) (a), 100.45 (1) (dm) and 230.03 (3); and to create 13.94 (1) (dt), 13.94 (1s) (c) 10., 19.42 (10) (t), 19.42 (13) (q), 20.195, 39.28 (7), 39.52, 39.54, 39.56, 40.02 (54) (n), 70.11 (38v), 224.30 (6) and chapter 239 of the statutes; relating to: student loans, creating an authority to be known as the Wisconsin Student Loan Refinancing Authority, granting rule-making authority, and making an appropriation.

Analysis by the Legislative Reference Bureau

The Wisconsin Student Loan Refinancing Authority

This bill creates an authority, which is a public body corporate and politic, to be known as the Wisconsin Student Loan Refinancing Authority (WSLRA). The WSLRA is governed by a board that consists of four members of the legislature, three members who are students of an institution of higher education, and two members with experience in making student loans. The five members of the board who are not members of the legislature are nominated by the governor, and with the advice and consent of the senate appointed, to serve two- or three-year terms. The board appoints the chief executive officer of WSLRA and annually elects the chairperson of the board. The board is given all the powers necessary or convenient to carry out its duties, as well as specific powers to conduct its corporate business, including the power to issue bonds for any corporate purpose.

Under the bill, the board must develop and implement a loan program under which state residents may refinance student loans. Under the program, WSLRA provides a loan to an individual to pay off some or all of his or her outstanding student loan debt. To qualify for the program, an individual must satisfy eligibility requirements established by WSLRA. Under the bill, WSLRA must provide loans under the program at the lowest possible interest rate that is still sufficient to cover the expenses of the program. A loan issued under the program is not dischargeable in a bankruptcy proceeding.

Financial aid information

This bill requires the Department of Financial Institutions to compile data related to private student loans for the purpose of comparing private lending institutions' student loan interest rates and repayment plans. A “private student loan" is a loan issued by a private lending institution for the purpose of paying for or financing higher education expenses, including tuition and fees, books and supplies, and room and board. DFI must create and maintain a list of private lending institutions that provide the lowest rates and best repayment options on student loans. DFI must also compile a list of the top ten best private lending institutions based on rates and policies that are most favorable to the student borrower. DFI must place these lists on DFI's Internet site and update the Internet site monthly to ensure that the student loan information in these lists is current and accurate. DFI's Internet site must also contain information pertaining to lending institutions that do not make the top ten list, including identifying those lending institutions that provide the worst rates and strictest repayment options. DFI may satisfy its duties under the bill through a designee or third-party contractor.

The bill also requires 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 (institution of higher education) to 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:

1. The total cost of attendance at the institution of higher education.

2. 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 four years, if the student were to attend the institution of higher education for four years (student loan debt).

3. Student loan rates, repayment plans, default rates, and the actual monthly payment that would be required to pay that student loan debt when the loan becomes due.

Finally, the bill requires an institution of higher education and the Higher Educational Aids Board to create on their Internet sites a link to that portion of DFI's Internet site containing the lists and other information required under the bill.

Student loan counseling

This bill requires any institution of higher education in this state that offers an associate degree or higher to provide loan counseling for its students. Under the bill, before a student enters into a student loan agreement, the institution must 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. A lender may not accept an application for a private student loan, or assess any fees for the loan, unless the lender has received certification from the applicant's institution of higher education that the applicant has received such counseling.

The bill also requires an institution of higher education to provide a student with information when the student leaves the institution, whether through graduation, transfer, or otherwise. The information must include available loan repayment plans, debt management strategies, options for prepayment of loans, and the consequences of defaulting on a loan.

Finally, the bill authorizes an institution of higher education to assess a lender a reasonable fee of up to $50 to defray the cost of the student counseling required under the bill.

Student loan debt report

Under current law, HEAB administers certain grant and loan programs for resident students enrolled in institutions of higher education in this state.

This bill requires HEAB to submit an annual report to the Joint Committee on Finance regarding student loan debt incurred in the previous year by resident undergraduate students enrolled in institutions of higher education located in this state. The report must include that information, together with all of the following:

1. The statewide average amount of student loan debt incurred in the previous year by resident undergraduate students enrolled in institutions of higher education located in this state.

2. A comparison of that statewide average to the national average amount of student loan debt incurred in the previous year by undergraduate students enrolled in institutions of higher education in the United States.

3. A comparison of that statewide average to the statewide average amount of student loan debt incurred in the previous year by undergraduate students in the state with the lowest ratio of statewide average student loan debt to the lowest quintile of state per capita income.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB444,1 Section 1 . 13.172 (1) of the statutes is amended to read:

SB444,4,7 13.172 (1) In this section, “agency" means an 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, that is entitled to expend moneys appropriated by law, including the legislature and the courts, and any authority created in subch. II of ch. 114 or in ch. 231, 233, 234, 238, 239, or 279.

SB444,2 Section 2 . 13.48 (13) (a) of the statutes is amended to read:

SB444,4,21 13.48 (13) (a) Except as provided in par. (b) or (c), every building, structure or facility that is constructed for the benefit of or use of the state, any state agency, board, commission or department, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Student Loan Refinancing Authority, the Wisconsin Economic Development Corporation, or any local professional baseball park district created under subch. III of ch. 229 if the construction is undertaken by the department of administration on behalf of the district, shall be in compliance with all applicable state laws, rules, codes and regulations but the construction is not subject to the ordinances or regulations of the municipality in which the construction takes place except zoning, including without limitation because of enumeration ordinances or regulations relating to materials used, permits, supervision of construction or installation, payment of permit fees, or other restrictions.

SB444,3 Section 3. 13.62 (2) of the statutes is amended to read:

SB444,5,5 13.62 (2) “Agency" means any board, commission, department, office, society, institution of higher education, council, or committee in the state government, or any authority created in subch. II of ch. 114 or in ch. 231, 232, 233, 234, 237, 238, 239, or 279, except that the term does not include a council or committee of the legislature.

SB444,4 Section 4 . 13.94 (1) (dt) of the statutes is created to read:

SB444,5,11 13.94 (1) (dt) Biennially, beginning in 2021, conduct a financial audit of the Wisconsin Student Loan Refinancing Authority and a program evaluation audit of the programs administered by the Wisconsin Student Loan Refinancing Authority under ch. 239. The legislative audit bureau shall file a copy of each audit report under this paragraph with the distributees specified in par. (b).

SB444,5 Section 5 . 13.94 (1s) (c) 10. of the statutes is created to read:

SB444,5,14 13.94 (1s) (c) 10. The Wisconsin Student Loan Refinancing Authority for the cost of the audit required to be performed under sub. (1) (dt).

SB444,6 Section 6 . 13.94 (4) (a) 1. of the statutes is amended to read:

SB444,6,7 13.94 (4) (a) 1. Every state department, board, examining board, affiliated credentialing board, commission, independent agency, council or office in the executive branch of state government; all bodies created by the legislature in the legislative or judicial branch of state government; any public body corporate and politic created by the legislature including specifically the Fox River Navigational System Authority, the Lower Fox River Remediation Authority, the Wisconsin Aerospace Authority, the Wisconsin Student Loan Refinancing Authority, the Wisconsin Economic Development Corporation, a professional baseball park district, a local professional football stadium district, a local cultural arts district, and a long-term care district under s. 46.2895; every Wisconsin works agency under subch. III of ch. 49; every provider of medical assistance under subch. IV of ch. 49; technical college district boards; every county department under s. 51.42 or 51.437; every nonprofit corporation or cooperative or unincorporated cooperative association to which moneys are specifically appropriated by state law; and every corporation, institution, association or other organization which receives more than 50 percent of its annual budget from appropriations made by state law, including subgrantee or subcontractor recipients of such funds.

SB444,7 Section 7 . 13.95 (intro.) of the statutes is amended to read:

SB444,6,21 13.95 Legislative fiscal bureau. (intro.) There is created a bureau to be known as the “Legislative Fiscal Bureau" headed by a director. The fiscal bureau shall be strictly nonpartisan and shall at all times observe the confidential nature of the research requests received by it; however, with the prior approval of the requester in each instance, the bureau may duplicate the results of its research for distribution. Subject to s. 230.35 (4) (a) and (f), the director or the director's designated employees shall at all times, with or without notice, have access to all state agencies, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Lower Fox River Remediation Authority, the Wisconsin Student Loan Refinancing Authority, the Wisconsin Economic Development Corporation, and the Fox River Navigational System Authority, and to any books, records, or other documents maintained by such agencies or authorities and relating to their expenditures, revenues, operations, and structure.

SB444,8 Section 8 . 16.002 (2) of the statutes is amended to read:

SB444,7,2 16.002 (2) “Departments" means constitutional offices, departments, and independent agencies and includes all societies, associations, and other agencies of state government for which appropriations are made by law, but not including authorities created in subch. II of ch. 114 or in ch. 231, 232, 233, 234, 237, 238, 239, or 279.

SB444,9 Section 9 . 16.004 (4) of the statutes is amended to read:

SB444,7,9 16.004 (4) Freedom of access. The secretary and such employees of the department as the secretary designates may enter into the offices of state agencies and authorities created under subch. II of ch. 114 and under chs. 231, 233, 234, 237, 238, 239, and 279, and may examine their books and accounts and any other matter that in the secretary's judgment should be examined and may interrogate the agency's employees publicly or privately relative thereto.

SB444,10 Section 10 . 16.004 (5) of the statutes is amended to read:

SB444,7,14 16.004 (5) Agencies and employees to cooperate. All state agencies and authorities created under subch. II of ch. 114 and under chs. 231, 233, 234, 237, 238, 239, and 279, and their officers and employees, shall cooperate with the secretary and shall comply with every request of the secretary relating to his or her functions.

SB444,11 Section 11 . 16.004 (12) (a) of the statutes is amended to read:

SB444,7,23 16.004 (12) (a) In this subsection, “state agency" means an association, authority, board, department, commission, independent agency, institution, office, society, or other body in state government created or authorized to be created by the constitution or any law, including the legislature, the office of the governor, and the courts, but excluding the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Student Loan Refinancing Authority, and the Fox River Navigational System Authority.

SB444,12 Section 12 . 16.045 (1) (a) of the statutes is amended to read:

SB444,8,6 16.045 (1) (a) “Agency" means an office, department, independent 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, that is entitled to expend moneys appropriated by law, including the legislature and the courts, but not including an authority created in subch. II of ch. 114 or in ch. 231, 232, 233, 234, 237, 238, 239, or 279.

SB444,13 Section 13 . 16.15 (1) (ab) of the statutes is amended to read:

SB444,8,11 16.15 (1) (ab) “Authority" has the meaning given under s. 16.70 (2), but excludes the University of Wisconsin Hospitals and Clinics Authority, the Lower Fox River Remediation Authority, the Wisconsin Student Loan Refinancing Authority, and the Wisconsin Economic Development Corporation.

SB444,14 Section 14 . 16.41 (4) of the statutes is amended to read: