Hinson-Hazlewood College Student Loan Program

Hinson-Hazlewood College Student Loan Program (HHSCLP) MODEL FOR STATE GOVERNMENT The program is self-supporting; borrowed funds are repaid by students, not taxpayers* Efficiently managed program since inception Stable source of financial assistance for students, regardless of changes in the marketplace Excellent value for students *Loan repayments and depositor interest cover all bond and administrative costs

Hinson-Hazlewood College Student Loan Program (HHSCLP) Texas Opportunity Plan Fund Authorized in 1965: co-sponsored by Representative George Hinson & Senator Grady Hazlewood

Hinson-Hazlewood College Student Loan Program (HHSCLP) 1st program in the country to offer state-funded low-interest loans to college students Still the only student loan program backed by tax-exempt General Obligation bonds (AAA rating) Bond authority approved by Texas voters 8 times Since the fall of 1966, approximately $2.7 billion in low-interest loans disbursed to Texas students

Student Loan Program Funding Bond Sale $ Pre 1992 Bonds Net Proceeds 1992 to Present Loan Funds (TOP Fund) HH Student Loans $ Loan Repayments Loan Funds (SLA Fund) HH Student Loans Interest & Sinking Fund Excess Transferred to SLA & TOP Required Reserve Pay Off Bonds Bond Principal & Interest Payments TOP = Texas Opportunity Plan SLA = Student Loan Auxiliary

Hinson-Hazlewood College Student Loan Program (HHSCLP) All loan origination, servicing, customer service, and pre-default collection activities performed by THECB staff THECB has never sold a loan Students have a reliable resource for help with their loans Numerous options for payment arrangements Defaulted loans referred to the OAG for litigation

5.25% Fixed annual interest (no compounding) Hinson-Hazlewood College Student Loan Program College Access Loans (CAL) 5.25% Fixed annual interest (no compounding) Lowest alternative loan rate available nationally, with payments deferred while in school* Comparison: Federal PLUS (parent loans) current rate 7.21% Most borrowers qualify for a 0% origination fee Current default rate is 3.35% *Rhode Island offers a 4.99% rate with repayment beginning immediately

Hinson-Hazlewood College Student Loan Program College Access Loan Requirements Be a Texas resident and enrolled at least ½ time in a program leading to an Associates degree, Bachelor’s degree, graduate degree, or (alternative) teacher certification Meet Satisfactory Academic Progress requirements Meet credit requirements or provide creditworthy cosigner Loan may be used to cover all or part of student’s Expected Family Contribution (EFC) Loan may not exceed Cost of Attendance minus student’s eligibility for federal aid, including loans

Hinson-Hazlewood College Student Loan Program (HHSCLP) FY 2014 Activities $150 million in loans disbursed (B-On-Time, TASSP, CAL) Loan applications processed: 33,422 (15,411 students) Calls answered: 132,992 Correspondence answered: 30,634 Online inquiries answered : 12,312 Forbearance/deferment requests processed: 14,274  

52,826 collections/courtesy calls Hinson-Hazlewood College Student Loan Program (HHSCLP) FY 2014 Activities, Cont’d Total payments processed: 980,171 for $122,460,615 (including 44,954 requiring manual handling) 52,826 collections/courtesy calls 42,599 due diligence/collections e-mails 17,833 skip-traced accounts Staff in Loan Program Operations: 56 FTEs

Contract with OAG - increased focus on collections, enhanced expertise Hinson-Hazlewood College Student Loan Program 2009 Transfer of Default Collections to the OAG Contract with OAG - increased focus on collections, enhanced expertise 238% Increase from 08/09 avg.

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