2015 - 2016 LEGISLATURE
June 11, 2015 - Introduced by Senators Hansen,
Lassa, Bewley, Carpenter,
Erpenbach, Harris Dodd, C. Larson, Miller, Ringhand, Risser, Shilling, L.
Taylor, Vinehout and Wirch, cosponsored by Representatives Mason,
Kolste, Barca, Barnes, Berceau, Billings, Bowen, Brostoff, Considine,
Danou, Doyle, Genrich, Goyke, Hebl, Hintz, Johnson, Jorgensen, Kahl,
Kessler, Meyers, Milroy, Ohnstad, Pope, Riemer, Sargent, Shankland,
Sinicki, Spreitzer, Stuck, Subeck, C. Taylor, Wachs, Young, Zamarripa and
Zepnick. Referred to Committee on Universities and Technical Colleges.
1An Act to amend
13.172 (1), 13.48 (13) (a), 13.62 (2), 13.94 (4) (a) 1., 13.95 2
(intro.), 16.002 (2), 16.004 (4), 16.004 (5), 16.004 (12) (a), 16.045 (1) (a), 16.15 3
(1) (ab), 16.41 (4), 16.417 (1) (b), 16.52 (7), 16.528 (1) (a), 16.53 (2), 16.54 (9) (a) 4
1., 16.765 (1), 16.765 (2), 16.765 (5), 16.765 (6), 16.765 (7) (intro.), 16.765 (7) (d), 5
16.765 (8), 16.85 (2), 16.865 (8), 71.05 (6) (b) 28. (intro.), am. and h., 77.54 (9a) 6
(a), 100.45 (1) (dm) and 230.03 (3); to repeal and recreate
230.03 (3); and to
13.94 (1) (dt), 13.94 (1s) (c) 9., 19.42 (10) (t), 19.42 (13) (p), 20.195, 39.28 8
(7), 39.52, 39.54, 39.56, 40.02 (54) (n), 70.11 (38v), 71.05 (6) (b) 28. j., 224.30 (5) 9
and chapter 239 of the statutes; relating to: student loans, the individual
10income tax subtract modification for tuition and student fees, creating an
1authority to be known as the Wisconsin Student Loan Refinancing Authority,
2granting 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 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
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 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 (UW) 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
Finally, the bill requires an institution of higher education and the Higher
Educational Aids Board (HEAB) 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
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.
Income tax subtraction
Under current law, there is an individual income tax subtraction for amounts
paid by a claimant for tuition expenses and mandatory student fees for a student who
is the claimant or the claimant's dependent under the Internal Revenue Code, to
attend an institution of higher education that is approved by the Educational
Approval Board and that is located in Wisconsin, or to attend certain postsecondary
schools in Minnesota to which the Minnesota-Wisconsin reciprocity agreement
applies. The tuition expenses and fees for which a subtraction may be claimed are
calculated based on the amount of tuition charged by the UW System at four-year
Also under current law, the subtraction that a claimant may claim for such
tuition expenses and mandatory student fees is reduced as the claimant's annual
federal adjusted gross income (FAGI) increases until, at a certain point, no
subtraction may be claimed. Currently, the allowable subtraction phases out, for a
single person or a married person filing as a head of household, as the claimant's
FAGI increases from $50,000 to $60,000. Once such a claimant's FAGI exceeds
$60,000, he or she may not claim the subtraction. For a married person filing a joint
return, the phaseout occurs as the married couple's joint FAGI increases from
$80,000 to $100,000, and no subtraction is allowed once the married couple's joint
FAGI exceeds $100,000. The phaseout for a married person filing a separate return
occurs as the claimant's FAGI increases from $40,000 to $50,000, and no subtraction
is allowed once the claimant's FAGI exceeds $50,000.
Under this bill, the phase-out provisions do not apply to a taxable year that
begins after December 31, 2013.
This bill also expands the definition of tuition expenses to include any amount
paid by a claimant in the year to which the claim relates on a student loan, the
proceeds of which were used by the claimant to pay the claimant's expenses for
tuition, fees, books, room and board, and educational supplies that were directly
related to the claimant's attendance at an eligible institution. The bill defines
eligible institution as a regionally accredited, nonprofit, postsecondary educational
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.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
For further information see the state 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:
13.172 (1) of the statutes is amended to read:
In this section, "agency" means an office, department, agency, 3
institution of higher education, association, society, or other body in state 4
government created or authorized to be created by the constitution or any law, that 5
is entitled to expend moneys appropriated by law, including the legislature and the 6
courts, and any authority created in subch. II of ch. 114 or in ch. 231, 233, 234, 238, 7239,
13.48 (13) (a) of the statutes is amended to read:
(a) Except as provided in par. (b) or (c), every building, structure or 10
facility that is constructed for the benefit of or use of the state, any state agency, 11
board, commission or department, the University of Wisconsin Hospitals and Clinics 12
Authority, the Fox River Navigational System Authority, the Wisconsin Student
13Loan Refinancing Authority,
the Wisconsin Economic Development Corporation, or 14
any local professional baseball park district created under subch. III of ch. 229 if the 15
construction is undertaken by the department of administration on behalf of the 16
district, shall be in compliance with all applicable state laws, rules, codes and 17
regulations but the construction is not subject to the ordinances or regulations of the 18
municipality in which the construction takes place except zoning, including without 19
limitation because of enumeration ordinances or regulations relating to materials 20
used, permits, supervision of construction or installation, payment of permit fees, or 21
13.62 (2) of the statutes is amended to read:
"Agency" means any board, commission, department, office, society, 3
institution of higher education, council, or committee in the state government, or any 4
authority created in subch. II of ch. 114 or in ch. 231, 232, 233, 234, 237, 238, 239, 5
or 279, except that the term does not include a council or committee of the legislature.
13.94 (1) (dt) of the statutes is created to read:
(dt) Biennially, beginning in 2017, conduct a financial audit of the 8
Wisconsin Student Loan Refinancing Authority and a program evaluation audit of 9
the programs administered by the Wisconsin Student Loan Refinancing Authority 10
under ch. 239. The legislative audit bureau shall file a copy of each audit report 11
under this paragraph with the distributees specified in par. (b).
13.94 (1s) (c) 9. of the statutes is created to read:
(c) 9. The Wisconsin Student Loan Refinancing Authority for the cost 14
of the audit required to be performed under sub. (1) (dt).
13.94 (4) (a) 1. of the statutes is amended to read:
(a) 1. Every state department, board, examining board, affiliated 17
credentialing board, commission, independent agency, council or office in the 18
executive branch of state government; all bodies created by the legislature in the 19
legislative or judicial branch of state government; any public body corporate and 20
politic created by the legislature including specifically the Fox River Navigational 21
System Authority, the Lower Fox River Remediation Authority, the Wisconsin 22
Aerospace Authority, the Wisconsin Student Loan Refinancing Authority,
Wisconsin Economic Development Corporation, a professional baseball park district, 24
a local professional football stadium district, a local cultural arts district,
and a 25
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 2
college district boards; every county department under s. 51.42 or 51.437; every 3
nonprofit corporation or cooperative or unincorporated cooperative association to 4
which moneys are specifically appropriated by state law; and every corporation, 5
institution, association or other organization which receives more than 50% of its 6
annual budget from appropriations made by state law, including subgrantee or 7
subcontractor recipients of such funds.
13.95 (intro.) of the statutes is amended to read:
913.95 Legislative fiscal bureau.
(intro.) There is created a bureau to be 10
known as the "Legislative Fiscal Bureau" headed by a director. The fiscal bureau 11
shall be strictly nonpartisan and shall at all times observe the confidential nature 12
of the research requests received by it; however, with the prior approval of the 13
requester in each instance, the bureau may duplicate the results of its research for 14
distribution. Subject to s. 230.35 (4) (a) and (f), the director or the director's 15
designated employees shall at all times, with or without notice, have access to all 16
state agencies, the University of Wisconsin Hospitals and Clinics Authority, the 17
Wisconsin Aerospace Authority, the Lower Fox River Remediation Authority, the
18Wisconsin Student Loan Refinancing Authority,
the Wisconsin Economic 19
Development Corporation, and the Fox River Navigational System Authority, and to 20
any books, records, or other documents maintained by such agencies or authorities 21
and relating to their expenditures, revenues, operations, and structure.
16.002 (2) of the statutes is amended to read:
"Departments" means constitutional offices, departments, and 24
independent agencies and includes all societies, associations, and other agencies of 25
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, 2
16.004 (4) of the statutes is amended to read:
16.004 (4) Freedom of access.
The secretary and such employees of the 5
department as the secretary designates may enter into the offices of state agencies 6
and authorities created under subch. II of ch. 114 and under chs. 231, 233, 234, 237, 7
and 279, and may examine their books and accounts and any other matter 8
that in the secretary's judgment should be examined and may interrogate the 9
agency's employees publicly or privately relative thereto.
16.004 (5) of the statutes is amended to read:
16.004 (5) Agencies and employees to cooperate.
All state agencies and 12
authorities created under subch. II of ch. 114 and under chs. 231, 233, 234, 237, 238, 13239,
and 279, and their officers and employees, shall cooperate with the secretary 14
and shall comply with every request of the secretary relating to his or her functions.
16.004 (12) (a) of the statutes is amended to read:
(a) In this subsection, "state agency" means an association, 17
authority, board, department, commission, independent agency, institution, office, 18
society, or other body in state government created or authorized to be created by the 19
constitution or any law, including the legislature, the office of the governor, and the 20
courts, but excluding the University of Wisconsin Hospitals and Clinics Authority, 21
the Wisconsin Aerospace Authority, the Lower Fox River Remediation Authority, the 22
Wisconsin Economic Development Corporation, the Wisconsin Student Loan
and the Fox River Navigational System Authority.
16.045 (1) (a) of the statutes is amended to read:
(a) "Agency" means an office, department, independent agency, 2
institution of higher education, association, society, or other body in state 3
government created or authorized to be created by the constitution or any law, that 4
is entitled to expend moneys appropriated by law, including the legislature and the 5
courts, but not including an authority created in subch. II of ch. 114 or in ch. 231, 232, 6
233, 234, 237, 238, 239,
16.15 (1) (ab) of the statutes is amended to read:
(ab) "Authority" has the meaning given under s. 16.70 (2), but 9
excludes the University of Wisconsin Hospitals and Clinics Authority, the Lower Fox 10
River Remediation Authority, the Wisconsin Student Loan Refinancing Authority, 11
and the Wisconsin Economic Development Corporation.
16.41 (4) of the statutes is amended to read: