B-On-Time program reconsiderations aim to support more students


A bill in the state Senate seeks to improve a zero-interest loan program that forgives loans for students who complete their degrees in a timely fashion.

The B-On-Time loan program was established in 2003 by a bill written by state Sen. Judith Zaffirini, D-Laredo. Zaffirini also authored the current bill to amend the program. The program provides zero-interest student loans that may be forgiven if students complete their degrees within four years for a four-year degree and five years for a five-year degree, maintain a 3.0 grade point average and do not exceed their degree plan by more than six credit hours.

In a statement issued to The Daily Texan, Zaffirini said the current legislation is a “shell bill,” meaning the bill does not include all intended elements and may be amended throughout the upcoming legislative session.

“Our goal is to ensure that more students who need help paying for college have access to this critical program,” Zaffirini said.

In its current form, the bill excludes students who attend community colleges and technical schools from the program. Zaffirini said the program has not been successful at two-year institutions because the program’s parameters are too narrow.

At UT, 954 students who enrolled in the B-On-Time program received an average loan of $5,955 during 2010-11, according to data provided by the Office of Student Financial Services. That year, the office issued almost $5.7 million in B-On-Time loans.

During the 2011 legislative session, the state reduced B-On-Time funding by $45.2 million. During the 2011-12 academic year, UT issued $3.8 million in B-On-Time funds to 595 students, averaging $6,392 per loan.

This year, 386 UT students received an average of $6,877 from the program out of a pool of about $2.6 million.

In March, the Texas Sunset Advisory Commission recommended increasing the yearly and credit hour graduation requirements for loan forgiveness and requiring the Texas Higher

Education Coordinating Board to set minimum credit requirements to obtain a loan through the program.

In response to the committee’s report, the Coordinating Board released a report in March recommending turning the loan program into a rebate program among other recommendations.

Efforts to increase participation in the program may not have the intended impact if federal law prohibiting the state and public institutions from marketing the program remains in place. In order to market the program, the federal government requires institutions to publish a preferred lender agreement that lists private lenders students may obtain loans from as an alternative to federal subsidized and unsubsidized loans.

Zaffirini said she is working with U.S. Sen. John Cornyn and other federal officials to request changes to federal regulations that limit institutions’ ability to market the program.

Thomas Melecki, Office of Student Financial Services director, said when the federal law was enacted in November 2011, it prevented additional state money for the B-On-Time program from being distributed to UT students.

“That really hurt us last year,” Melecki said. “If we had been able to educate students on the program, we could have dispersed another $2.8 million to students who needed the money.”

Printed on Wednesday, Dec. 5 2012 as: Zaffirini files outline of further loan specifics