On November 2, 1999, two proposed constitutional amendments affecting higher education will be included on the voting ballots.

Information on one of these, Proposition 13, is listed below. Information on the other, Proposition 17, was included in the Sept. 23 issue of On Campus.

Proposition 13 will appear on the ballots as: The constitutional amendment providing for the issuance of $400 million in general obligation bonds to finance educational loans to students.

Senate Bill 184 and Senate Joint Resolution 16, sponsored by Sen. Gonzalo Barrientos and Rep. Bob Turner during the 76th Legislature, authorized the Texas Higher Education Coordinating Board to issue $400 million in general obligation bonds to continue college loan assistance for low- and middle-income students through the Hinson-Hazelwood Student Loan Program.

Because the measure is an amendment to the Texas Constitution, it must be approved by a majority of Texas voters and will appear on the November ballot as Proposition 13. Early voting in the election begins Oct. 18.

The Hinson-Hazelwood Student Loan Program is the umbrella program for several federally guaranteed loan programs the Texas Higher Education Coordinating Board administers. Since its creation in 1965, the program has provided more than $900 million in student loans to more than 260,000 low- and middle-income students in Texas.

Currently, the program provides loans to about 16,000 financially needy students who attend Texas public and private institutions of higher education each year. Funding is provided by the issuance of general obligation bonds specifically authorized by constitutional amendment.

If adopted by voters on Nov. 2, Proposition 13 would authorize $400 million in general-obligation bonds for student loans. Under the Hinson-Hazelwood Student Loan Program, student borrowers must be Texas residents or eligible to pay in-state tuition and must demonstrate financial need. The program uses money from student loan repayments, federal interest subsidies, lenders' allowances and depositor interest to offset state borrowing costs.

The Hinson-Hazelwood Student Loan program would affect students by:

• Providing loans of lower interest, which are more affordable than private student loans because of the low interest rate paid by the state on bonds.
• Providing loans to students whom other lenders often are unwilling to help ¾ the program serves as a lender of last resort.
• Providing a stable source for student loans.
• Providing loans that are administered by one entity. Borrowers are not subject to their loans being sold to other lenders.

The Hinson-Hazelwood Student Loan Program is completely self-supporting. Not a single penny of state funding has ever been used to pay for administration or to repay loans.

The program also has a 33-year track record of administrative performance. The loan default rate is three to four times lower than default rates for private student loans. In 1994, the default rate was only 5 percent, compared to 15 to 20 percent for private loans.

Bonds used to fund the loans improve the state's overall bond rating because of the prompt record of repayment.