Sunset Advisory Commission

Legislature gives higher education board direction on loans

Financial aid counselors might be able to advise students to take out a no interest, forgiveable loan in the future, which is currently forbidden under federal law. 

The Legislature's Sunset Advisory Commission, a body charged with assessing the need of state agencies, directed the Texas Higher Education Coordinating Board to seek a revision to federal law that prevents schools from advertising the state's B-On-Time Loan Program, according to a report released by the commission in July. Financial aid officials are currently only allowed to direct students to federal financial aid programs, not state.

The B-On-Time Loan program grants students a no interest loan that is forgiveable if they graduate in four years with at least a 3.0 GPA. Five percent of a student's tuition is used to fund the program, and the higher education board's preliminary estimates indicate the program will have $84 million in awards for fiscal years 2014-2015. UT-Austin students typically take out $7,400 per year under the program. 

One of the program's biggest problems is low student participation rates, according to a report by the Sunset Advisory Commission. At UT-San Antonio, for instance, $100,000 went unused in 2011 because students did not know about it, officials claim.

“We’re not allowed to advertise these funds due to restrictions on alternative lending,” said Lisa Blazer, associate vice president for UT-San Antonio’s Financial Aid and Enrollment Services. “They have to request it from us. That will explain why a small amount will not be spent.”

Follow Jody Serrano on Twitter @jodyserrano. 

The state’s critiquer-in-chief, the Sunset Advisory Commission, issued its verdict on the state’s chief higher education overseer — and the results weren’t pretty.

Late last month, the commission issued a report that skewered the Texas Higher Education Coordinating Board for its institutionalized mismanagement and isolated approach to policy decisions.

In one key example of the board’s lack of transparency, non-members may not speak at a meeting without first formally requesting permission before the meeting itself — thereby relying on the “savvy” of the general public to navigate the board’s bureaucracy simply to voice their opinions. Even worse, the commission found that “fear of retaliation” prevented many of the board’s naysayers from bothering to engage in the cumbersome process.

In his response to the report, board commissioner Raymund Paredes, writing on behalf of the entire board, agreed with the characterization that the board’s limited input “hinder[s] its ability” to successfully promote Texas higher education.

The inclusion of the public in the board’s meetings will, according to Paredes, begin this month — though there are lingering questions as to why a government report was necessary to change the policy at all.

The commission’s review also scrutinized the board’s near-obsessive focus on Closing the Gaps — a board program that aims to bring Texas universities to parity with those in other large states — as a paradoxical commitment that “impedes … strategic management of its own operations.” By adopting Closing the Gaps as its defining mantra, the board was able to simultaneously pontificate about the value of a college degree while leaving college students out to dry.

The board came under scrutiny in December for making a jarring miscalculation in TEXAS Grant allocations, leaving UT students who rely on the scholarship $3.2 million short, collectively. Now, the board is under renewed scrutiny for the deficiencies of its B-On-Time loan program. The program, which provides a forgivable loan for qualifying students who graduate within four years, has a 22-percent default rate, which is twice that of the federal student loan default rate in Texas.

One of the implicit goals of B-On-Time, along with one of the goals of Closing the Gaps, is to increase the four-year graduation rate of the state’s universities. The focus on pushing students in and out of the college pipeline has found support in key leaders from state legislators to UT itself.

Organizations such as the Texas Higher Education Coordinating Board exist because of an overarching goal to unite differing groups under the banner of advancing higher education and, as the commission concluded, should be preserved. But one of the fundamental problems of the board is its worrisome abdication of that mission. Texas legislators rely on the board for leadership; universities rely on the board for its guidelines; and, most importantly, students rely on the board for guardianship of their education.

The state budget deficit could force the Texas Youth Commission, the state juvenile corrections agency, to substantially lower the costs of providing services — which may force layoffs and facility closures. The news comes after the agency, which was rocked by a series of child sex-abuse scandals that became public in 2007, received high marks earlier this month from a Sunset Advisory Commission staff report as well as an internal evaluation. “The biggest costs you have are personnel and facilities,” said state Rep. Jerry Madden, R-Plano, vice chairman of the House Corrections Committee. “They will get the biggest look as we cut back on the number of youth there.” The population of children in TYC custody has declined from more than 5,000 to about 1,500 since the abuse scandals came to light, while the agency still maintains the facilities and staff from when it had significantly more children in its care. Madden said the agency would have to look seriously at cutting the number of facilities the agency maintains to house children. Longtime critics of the commission said neither report addressed the fundamental issues facing the agency. “The jury is still out on TYC,” said Texas state Sen. John Whitmire, D-Houston, chair of the Senate Criminal Justice Committee. “We will always need a juvenile corrections commission, but their mission will be defined by the need.” Whitmire said neither the internal report or the Sunset review addressed the problems of urban youth sent to remote rural locations and minimal health and educational services. During the last legislative session, the Legislature granted about $60,000 a child per year to probation departments in urban communities to see if services could be provided more effectively — significantly less than the $130,000 spent per year on each child in TYC custody. “If you gave the juvenile probation department additional money, you could keep more kids in their community, where they are close to their families, the courts and the services they need,” Whitmire said. “Even though TYC may or may not continue, it will continue to be downsized and will probably house just those the community wouldn’t want because of the nature of their crime.” More than 300 children currently in TYC custody will eventually end up in the adult criminal justice system because of the nature of their crime. Child advocates have long pressed for combining the TYC and the Texas Juvenile Probation Commission into one agency, the Sunset Commission staff report recommended that TYC remain its own agency but should be downsized to reflect the fact it is caring for fewer children. Child advocates warn that legislators must focus on the impact that budget cuts will have on the children who are in either TYC or the juvenile probation system. “We need to focus on the ramifications of the budget shortfall on the children, if we don’t do that and the funding goes away, then what do they have to work with?” said Ana Yánez-Correa, executive director of Texas Criminal Justice Coalition. “Basically, the children can be put at risk by not giving them the resources that they need.”

Election 2010

The election of the next chairman of the Texas Railroad Commission, the office charged with regulating the state oil and gas industry, will test whether more endorsements and experience can help one candidate overcome an even bigger handicap — the ‘D’ next to his name.

The race between Democrat Jeff Weems, a lawyer from Houston, and Republican David Porter, an accountant from Giddings, takes on added significance as the commission approaches review in the next legislative session by the Sunset Advisory Commission, which can make recommendations to overhaul or abolish ineffective state agency bodies. Hearings on the railroad commission end in November.

Since 1994, Republicans have been charge of regulating the Texas oil and gas industry, but after incumbent Victor Carrillo was upset in the Republican primary by the little-known Porter, Democrats began to view the seat as a statewide office that could potentially change hands. A UT/Texas Tribune poll released Monday shows Porter leading Weems 50 percent to 34 percent. In the poll, undecided voters were pressed to choose a candidate.

Low natural gas prices in the current economy could mean a slow down in drilling activity, said Justin Furnace, president of the Texas Independent Producers and Royalty Owners Association.
“Leadership is needed during the slowdown to fix issues at the railroad commission and find ways to encourage operators to invest in Texas,” Furnace said.

The UT System owns 2 million acres of oil and gas-rich land, about half of which are leased to companies for oil and gas exploration. Oil and gas prices affect the value of those lands to UT. Jim Benson, director of University Lands, said the UT System is in tune with the daily operations of the commission, which oversees drilling, pipeline leaks and other environmental issues.

“We work in concert with the railroad commission. We also have people looking after UT System institutions’ interest in the Permanent University Fund lands,” Benson said. “The railroad commission is a tremendous tool that we utilize.”

Small-percentage payouts from the Permanent University Fund pay for certain academic programs and other critical items at UT Austin and 16 other institutions in the UT and Texas A&M systems. According to the UT System’s quarterly prediction, recovering oil prices will greatly increase UT’s payout.

Weems, who received six major newspaper endorsements, said commissioners should fight for continued support of the agency so that it has the manpower to enforce environmental regulations. He said Republican commissioners brag about cutting their budget to the point that the body can’t do its job, which led to lax regulation and increasingly ignored safety issues in locations such as the Barnett Shale in North Texas.

“The field people could fix [environmental issues in the Barnett Shale] quickly, but instead the EPA and the TCEQ will come in, stumble around and do things that don’t fix the problem and screw up the job-creating aspect of the industry,” Weems said.

Weems has received $38,000 from lawyers and lobbyists. Porter has received $12,500 from the energy and natural resources sector. Carillo had received $168,000 from the energy and natural resources sector.

Porter said in the state’s present budget crisis, the commission will have to do more with less to maintain the regulatory functions of the commission and keep families near drilling activities safe. Porter said he looks at regulations from the point of view of people who have to comply with them.

“If they can’t comply with them, it doesn’t matter what it’s supposed to achieve,” he said. “Compliance is what’s going to achieve the safety goals that [the regulation] has got in mind.”

But Andrew Wheat, research director for Texans for Public Justice, said the railroad commission is a textbook example of a “captured agency,” a state agency beholden to the interests of the industry it is supposed to regulate. Current railroad commissioners have received 40 to 45 percent of their campaign donations from the oil industry, which he said is a “huge conflict” of interest. Donations from lawyers and lobbyists with interests in matters that the commission regulates is also a potential conflict of interest, Wheat said.