AB739-ASA1,2,2 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)
41., 16.765 (1), 16.765 (2), 16.765 (5), 16.765 (6), 16.765 (7) (intro.), 16.765 (7) (d),
516.765 (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); and to create 13.94 (1) (dt), 13.94 (1s) (c) 9.,
719.42 (10) (t), 19.42 (13) (p), 20.195, 39.28 (7), 39.52, 39.54, 40.02 (54) (n), 70.11
8(38v), 71.05 (6) (b) 28. j., 224.30 (6) and chapter 239 of the statutes; relating
9to: student loans, the individual income tax subtract modification for tuition
10and student fees, creating an authority to be known as the Wisconsin Student

1Loan Refinancing Authority, granting rule-making authority, and making an
2appropriation.

This substitute amendment 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 substitute amendment, 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 substitute amendment, 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.

This substitute amendment 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 substitute amendment through a designee or
third-party contractor.

The substitute amendment 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
due.

Finally, the substitute amendment 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 substitute amendment.

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
institutions.

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 substitute amendment, the phase-out provisions do not apply to a
taxable year that begins after December 31, 2013.

This substitute amendment 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 substitute
amendment defines eligible institution as a regionally accredited, nonprofit,
postsecondary educational institution.

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

This substitute amendment 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.

AB739-ASA1,4,72 13.172 (1) In this section, "agency" means an office, department, agency,
3institution of higher education, association, society, or other body in state
4government created or authorized to be created by the constitution or any law, that
5is entitled to expend moneys appropriated by law, including the legislature and the
6courts, and any authority created in subch. II of ch. 114 or in ch. 231, 233, 234, 238,
7239, or 279.