AB 498

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 learning, 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 similar eligibility

requirements to the criteria a private lender uses to make an unsecured personal

loan at market rates. 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 (DFI) 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 10 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 10 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 (UW) System, a technical college within the technical college system, a

tribally controlled college, or a private, nonprofit institution of higher education