Fate of Texas Student Loans to be Determined by Voters on Nov. 8
Funding for the Hinson-Hazlewood College Student Loan Program is one of 10 proposed amendments to the Texas Constitution that will be up for a vote Nov. 8. The program has received more than $1.8 billion in proceeds from bonds sold by the State Legislature since 1969.
The state expects the program to exhaust its funds in 2013, which makes the issuance of new bonds a requirement if the program is to continue to help Texas residents pay for college. State-funded student loans in Texas and other states may become even more important as budget negotiations in Washington consider further cuts to federal financial aid programs.
“With this new debt commission, everything is on the table,” said State Sen. Royce West, author of the constitutional amendment to fund Hinson-Hazelwood (HH) student loans, on the possibility of further college financial aid cuts by the federal government. “They are looking to cut entitlement programs and are also looking at education funding. From that vantage point, higher education is going to be on the chopping block. One of things that is going to be on the block is research, but then they will look at financial aid.”
Funding for HH student loans is paramount because of how competitive the Texas loans are compared to federal student loans and private student loans, according to a summary of the proposed amendment by the House Research Organization.
“The fixed rate currently charged by the coordinating board for its College Access Loans, which is one of the loans that comprises the HH loan program, is 6 percent,” the organization said. “This is one of the most competitive student loans in the country. Student demand for low-interest loans with stable rates is increasing as access to other financial aid programs is constrained by fiscal challenges” (“Voters Get Say on 10 Constitutional Amendments,” Star Local News, Aug. 30, 2011).
State Student Loans Help Offset Climbing Tuition and Declining Financial Aid
West said that keeping the HH loan program going is critical during a tough economy because more people are going back to school to increase their job prospects at a time when public schools in the state have dramatically increased their tuition. At the University of Texas at Austin — where the power to set tuition was changed from the Texas Legislature to the UT System Board of Regents in 2003 — 15 credit hours cost $1,975 in 2002. By this fall however, the cost of 15 credit hours had climbed to $4,897, an increase of 148 percent in less than 10 years.
As challenging as it may sound, however, a constitutional amendment for selling bonds to fund student loans in Texas is nothing new. State Sen. Florence Shapiro said the Legislature has to go through the process every four to six years. Shapiro, who supports the amendment, said that borrower-friendly HH loans pay for themselves and have some of the lowest interest rates available.
“What this does is assist those college students who need a little help financially,” Shapiro said. “Sometimes all the students need is a little extra money to finish off their education, and this does that.”
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