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Changes to B-On-Time have million-dollar consequences

Changes to B-On-Time have million-dollar consequences
mgnonline.com
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POSTED: Wednesday, July 3, 2013 - 11:33am

UPDATED: Wednesday, July 3, 2013 - 11:44am

From 2007 to 2012, the University of Texas at Arlington contributed $17.8 million in tuition revenue to the state's B-On-Time Loan Program, which rewards needy students who can keep their grades up with forgivable, merit-based loans. But the university's students received just $6.3 million in return.

In the same time period, Texas A&M University put up nearly $22 million for the program — and its students got $33 million back.

This tuition shuffling will soon be a thing of the past. In a legislative session largely marked by unfinished business in higher education — no tuition revenue bonds issued for campus construction, no switch to outcomes-based funding for universities and a gubernatorial veto on a bill to limit the authority of university regents — tweaks to the B-On-Time program were among the more noteworthy accomplishments.

The basic upshot? Institutions will only be able to reap their fair share from the program, based on what they put into it.

The change can be credited, in large part, to an unexpected player: state Rep. Helen Giddings, D-DeSoto. Heading into the session, she had not closely followed the struggles of the B-On-Time Loan Program. But by the regular session's end, she was among the most vocal and successful advocates for reforming it.

“The philosophical position that Giddings made, and the [Texas Higher Education] Coordinating Board agrees with that philosophical position, is that students at the institutions should get access to what they contributed,” said Dan Weaver, the board's assistant commissioner for business and support services.

The establishment of the loan program in 2003 is one of former Senate Higher Education Chairwoman Judith Zaffirini's proudest accomplishments. In an effort to encourage students to graduate on time, it offers them a great deal: a no-interest loan that can be forgiven if a student graduates in four years with at least a 3.0 GPA. And the incentive appears to work. The four-year graduation rates for students with B-On-Time loans are significantly higher than those for students with some other form of financial aid.

But the program has encountered other difficulties. In its review of the coordinating board, which oversees the program, the Sunset Advisory Commission dedicated an entire section to B-On-Time, finding that its strict requirements and complex structure, among other challenges, made it difficult for students to use effectively.

Some of B-On-Time’s issues must be dealt with at the federal level. The program can be difficult to package for students, in part because of federal restrictions on the marketing of loan programs. U.S. Rep. Joaquin Castro, D-San Antonio, a former vice chairman of the Texas House Higher Education Committee, has filed a federal bill to address this, though its chances of getting through congressional gridlock appear low.

Giddings took an interest when she learned that some universities, including some that largely cater to low-income students, were losing money to other institutions through a quirk of how B-On-Time is funded.

To address the rising college costs anticipated after tuition deregulation in 2003, the state began setting aside 20 percent of all public university tuition above 2003 levels to be used for financial aid. Of that set-aside, 5 percent is designated for B-On-Time loans.

But the amount that was collected from a university for the program was never tied to how much its students could receive from those loans. As a result, schools that were more aggressive in signing students up for the loan program were able to receive more funding than they contributed, resulting in the situation Giddings set out to address.

“We want to continue to affirm the mission,” Giddings said, “but every now and then, you have to step back from situations and be able to admit that this is not working. It is not accomplishing the goal for which we intended it.”

Going forward, institutions will get back what they contributed. In the event the Legislature appropriates less for the program than the coordinating board anticipates collecting, as is set to happen in the coming biennium, the institutions will get their proportional share.

While this means more money in the pockets of schools, like UT-Arlington, that were losing out, Texas A&M University and a small handful of other schools that were gaining financial aid money through B-On-Time face a significant cut.

"There is always a concern when there is less financial assistance for us to award to students," Delisa Falks, the director of A&M's financial aid office, said in an email. "Texas A&M will work with the funding that we are allocated based on what we 'put into' the program to assist as many students as we are able to."

Giddings was not the only one to push for the change. Zaffirini also filed a bill that would have made similar revisions to the program, which she also managed to add to the coordinating board's sunset bill as an amendment.

In fact, Giddings and some others were hoping for more dramatic alterations; a number of the Sunset Advisory Commission's concerns went unaddressed. But Giddings said she was pleased with even this small step. “Most big things in the Legislature are done incrementally, whether we like it or not,” she said.

To make her case during the session, Giddings distributed a report from the Legislative Budget Board regarding the amount collected from and received by universities from 2007 to 2012. (We've included the data below.) The table also shows the number of awards granted at each university.

Institution

Awards

Collected

Received

ANGELO STATE UNIVERSITY 161 $1,853,941 $773,953
LAMAR UNIV-BEAUMONT 623 $4,511,098 $2,930,772
MIDWESTERN STATE UNIV 198 $1,470,872 $980,827
PRAIRIE VIEW A&M UNIV 796 $2,609,034 $4,244,554
SAM HOUSTON STATE UNIV 589 $5,862,132 $3,268,588
STEPHEN F AUSTIN UNIV 1,261 $4,928,091 $6,735,956
SUL ROSS STATE UNIV 12 $251,338 $64,946
TARLETON STATE UNIV 110 $2,350,170 $511,797
TEXAS A&M UNIV-COMMERCE 553 $1,851,779 $2,874,848
TEXAS A&M UNIV-CORPUS CHRISTI 818 $2,729,989 $4,483,600
TEXAS A&M UNIVERSITY 6,087 $21,758,446 $33,247,846
TEXAS A&M UNIV-GALVESTON 84 $995,540 $428,232
TEXAS A&M UNIV-INTERNATIONAL 598 $1,246,020 $3,441,314
TEXAS A&M UNIV-KINGSVILLE 277 $1,248,372 $1,394,444
TEXAS SOUTHERN UNIV 49 $3,111,918 $200,281
TEXAS ST UNIV SAN MARCOS 2,613 $15,603,469 $14,499,742
TEXAS TECH UNIVERSITY 1,019 $12,182,797 $5,187,868
TEXAS WOMANS UNIVERSITY 769 $3,286,834 $4,036,693
U OF HOUSTON CLEAR LAKE 52 $1,519,016 $242,221
U OF HOUSTON DOWNTOWN 43 $3,296,513 $216,448
U OF HOUSTON MAIN 1,272 $17,352,408 $7,129,657
U OF HOUSTON VICTORIA 23 $566,603 $122,110
UNIV OF NORTH TEXAS 3,007 $15,190,826 $13,846,201
UNIV OF TEXAS-ARLINGTON 1,279 $17,857,085 $6,317,895
UNIV OF TEXAS-AUSTIN 5,102 $31,477,702 $27,077,974
UNIV OF TEXAS-BROWNSVILLE 48 $577,290 $226,379
UNIV OF TEXAS-DALLAS 702 $7,935,245 $3,655,175
UNIV OF TEXAS-EL PASO 119 $6,731,219 $545,736
UNIV OF TEXAS-PAN AM 1,476 $5,458,898 $7,393,358
UNIV OF TEXAS-PERMIAN BASIN 44 $865,660 $172,445
UNIV OF TEXAS-SAN ANTONIO 1,300 $12,555,244 $7,635,274
UNIV OF TEXAS-TYLER 285 $1,756,132 $1,510,135
WEST TEXAS A&M UNIVERSITY 320 $1,784,089 $1,628,222

Some institutions are not included, either because they are new or because disclosing the information would run afoul of federal student privacy regulations.
 

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