With elections on everyone’s mind as the television news shows focus on the presidential race, the Texas November elections for constitutional revision could easily be overlooked. The ballot includes Proposition 2, a constitutional amendment allowing the Texas Higher Education Coordinating Board to issue bonds for low-interest, low-fee loans to students. If passed, the proposition would allow the THECB to refinance its student loan program by issuing $500 million in bonds.
The Hinson-Hazelwood Student Loan Program has been administered by the Coordinating Board since 1965. The voters have approved the sale of general obligation bonds six times, but the $400 million last authorized in 1999 is now almost exhausted.
The program offers loans, currently at a 6 percent interest rate, that do not capitalize their interest—a big benefit to students with a low rate and less interest added. Any Texas resident enrolled at least half-time in a program leading to an associate, bachelor or graduate degree at a public or private university or college in Texas is eligible for these loans. The loans are repaid by the students and have no impact on property taxes, sales taxes or other taxes collected by the state.
The proposition must be approved by voters to continue to provide funding for this program.
