Proposition 2 – Student Loan Amendment

TEXAS – Proposition 2 – SJR 57

Brief background information: (provided by the Texas Legislative Council)

This amendment would authorize the Texas Higher Education Coordinating Board (THECB) to issue up to $500 million in general obligation bonds to finance college and university student loans. The THECB expects to exhaust the currently authorized amount of $400 million by 2009 so it is asking for an additional $100 million to help finance the student loans.

This program dates back to 1965 when $85 million was initially authorized. The amount was increased several times, most recently to $400 million in 1999.

Designed to be self-supporting, repayments of the student loans made under this program are applied toward retirement of the bonds.

Pro and Con– information provided by Jacci Howard Bear of About.com

Why Vote For Prop 2 This is a self-supporting loan program that provides more favorable rates than other sources thereby making higher education more affordable to students and providing Texas with a better educated future workforce.

With rising tuition and fees, there is greater demand for student loans.

Why Vote Against Prop 2To date, the program has never needed to dip into general revenue to meet expenses. However, the bonds are backed by the state and taxpayers could be responsible for repayment if interest on the loans doesn’t generate enough revenue or if there were an increase in student loan default rates.

Loan programs for higher education are available from private lenders even if the state did not provide loans.

— Edited for the web by Miguel Martinez