Texas Senate considers bill to cut child support interest rates from 6% to 3%

Texas lawmakers are taking significant steps to reform the child support system, with the Senate Committee on Jurisprudence advancing Senate Bill 629, which proposes to lower the interest rate on child support arrears from 6% to 3%. This change aims to alleviate the financial burden on noncustodial parents, many of whom struggle to meet their obligations due to limited incomes.

During the April 23, 2025, meeting, experts highlighted the pressing need for this reform. Professor Quentin Reiser from the University of Wisconsin presented data showing that high interest rates on arrears discourage payments, leading to a cycle of debt that affects custodial families. He emphasized that lowering the interest rate would not only slow the growth of arrears but also encourage more consistent payments from noncustodial parents.

Currently, Texas has one of the highest levels of unpaid child support in the nation, with approximately $19 billion owed across over a million cases. Many of these parents report annual incomes below $10,000, making it nearly impossible for them to catch up on their debts. The proposed bill aims to provide a more manageable path for these parents, ultimately benefiting custodial families who rely on this support.

Lisa Marshall, CEO of Fighting Homelessness, also voiced her support for the bill, noting that the current system exacerbates poverty and homelessness. She pointed out that nearly half a million families are without support, not due to unwillingness to pay, but because the debt has become unmanageable. By reducing the interest rate, the bill seeks to give parents a fair chance to fulfill their responsibilities and provide stability for their children.

The committee discussed a substitute for the bill that would delay the enactment date from September 1, 2025, to January 1, 2026, allowing more time for implementation. This adjustment reflects a commitment to ensuring that the changes can be effectively integrated into the existing system.

As the committee continues to gather testimony and refine the bill, the potential impact on Texas families remains a focal point. Advocates argue that this reform could lead to increased payments and a more equitable child support system, ultimately fostering better outcomes for children and families across the state.