Relating to the displacement of student financial aid at a public institution of higher education, the official text

S.B. No. 2995

AN ACT

relating to the displacement of student financial aid at a public

institution of higher education.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 56, Education Code, is

amended by adding Section 56.0094 to read as follows:

Sec. 56.0094. FINANCIAL AID DISPLACEMENT. (a) In this

section:

(1) "Coordinating board" means the Texas Higher

Education Coordinating Board.

(2) "Gift aid" means a grant, scholarship, exemption,

waiver, or other financial aid awarded to a student without a

requirement to repay the aid or earn the aid through work.

(b) The coordinating board shall develop a financial aid

displacement advisory for use by institutions of higher education

under this section that contains:

(1) a statement bordered by a line one point in weight

in a font not less than 14 points in size in the following form:

"Financial aid displacement occurs when a student's

financial aid is reduced due to receipt of a private scholarship or

other reasons identified in this advisory. This practice occurs in

Texas and should be taken into consideration while applying for

financial aid. The institution to which you are applying is

providing in this application a list of recommendations describing

how to maximize your financial aid and ensure that you are prepared

when financial aid displacement occurs. You are encouraged to

reach out to the institution to which you are applying to receive

advice on how to avoid financial aid displacement."; and

(2) a list of the most common reasons, as identified by

the coordinating board, for which the amount of gift aid awarded may

be revised or reduced under this chapter.

(c) Each institution of higher education shall include in

the institution's admission application form or provide in the

institution's admission application form a link to the financial

aid displacement advisory developed under Subsection (b) and, in

plain language:

(1) how to apply for gift aid at the institution;

(2) the timeline for financial aid processes at the

institution, including application deadlines, suggested deadlines

to report gift aid, and other deadlines of which the institution

determines a prospective student should be made aware;

(3) a list of recommendations to aid a prospective

student in maximizing gift aid awards, as determined by the

institution;

(4) a list of recommendations for a prospective

student to ensure the student's gift aid will not be reduced; and

(5) contact information for an employee or office at

the institution from whom a prospective student may seek advice

regarding gift aid.

(d) The coordinating board shall adopt rules necessary to

implement this section.

SECTION 2. Section 56.0094, Education Code, as added by

this Act, applies beginning with the 2025-2026 academic year.

SECTION 3. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I hereby certify that S.B. No. 2995 passed the Senate on

May 12, 2025, by the following vote: Yeas 30, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 2995 passed the House on

May 28, 2025, by the following vote: Yeas 81, Nays 57, one

present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor