SECTION 107.3. Effect of Student Loan Payment Default on Licensure

(a) Definitions.

(1) Administering entity--a governmental entity that administers a student loan, student loan repayment, or scholarship program.

(2) Corporation--the Texas Guaranteed Student Loan Corporation (TGSLC).

(3) License--A license, certificate, registration, permit, or other authorization issued by the Board.

(4) Student loan--A loan made to a person to support the person while attending a public or private institution of higher education or other postsecondary educational establishment that is:

(A) owed to this state, an agency of this state, or the United States; or

(B) guaranteed by this state, an agency of this state, or the United States.

(b) Discretion to Renew, Approve or Discipline a License.

(1) The Board may deny a person's initial application for licensure; deny an application for renewal of license issued by the Board; suspend the license; or take other disciplinary action against the person upon receipt of information from an administering entity that a person has defaulted on a student loan or has breached a student loan repayment contract or scholarship contract by failing to perform the person's service obligation under the contract as established by §56.003 of the Texas Occupations Code.

(2) A determination by an administering entity that a person has defaulted on a student loan or has breached a student loan repayment contract or scholarship contract by failing to perform the person's service obligation under the contract creates a rebuttable presumption that the person has committed the default or breach.

(3) The Board may rescind any action taken under section (b)(1) on the receipt of information from an administering entity that the person against whom the action was taken has:

(A) entered into an agreement with the administering entity to:

(i) repay the student loan;

(ii) perform the service obligation;

(iii) pay any damages required by the student loan repayment contract or scholarship contract; or

(B) taken other action resulting in the person no longer being in default on the student loan or in breach of the student loan repayment contract or scholarship contract.

(4) The Board may reinstate any action taken under section (b)(1) and may take other disciplinary action on the receipt of information from an administering entity that the person against whom the action was taken has:

(A) defaulted on breached an agreement under section (b)(3)(A); or

(B) otherwise defaulted on the student loan or breached the student loan repayment or scholarship contract.

(c) Mandatory Non-Renewal of a License.

(1) The Board shall not renew a license due to a default on a student loan guaranteed by Texas Guaranteed Student Loan Corporation (TGSLC), a default on a repayment agreement with TGSLC or a failure to enter a repayment agreement with TGSLC as established under §57.491 of the Texas Education Code, unless the licensee presents to the Board 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 or on a repayment agreement.

(2) The Board shall provide its applicants and licensees with written notice of the nonrenewal policies established under §57.491 of the Texas Education Code and an opportunity for a hearing in accordance with the provisions of the Administrative Procedure Act, Texas Government Code, §2001.001, et seq.

(3) As required by §57.491(c) of the Texas Education Code, the Board, on an annual basis, shall prepare a list of the agency's licensees and submit the list to the corporation in hard copy or electronic form.

Source Note: The provisions of this §107.3 adopted to be effective December 10, 2013, 38 TexReg 8831