The Texas Higher Education Coordinating Board has notified college financial aid offices across the state that there isn't enough money in the Texas "B On Time" loan program to cover all the students who qualify for it. This is the program that provides no interest loans that are completely forgiven if the student graduates on time with at least a "B" average.
Last year, Texas colleges and universities gave out $49 million of these loans to nearly 13,000 students. This year, there's only $41 million available for the loans. Financial aid offices say there's no loan money available for new students, and about 650 students who got the loan last year won't be able to renew.
At the University of Houston, Financial Aid spokeswoman Kim Sherwood says UH students who applied for a B On Time loan have a better alternative -- the Texas Grant Program.
"For us it'll be incoming freshmen that were expecting it. A lot of them, hopefully, we'll be able to give them the Texas Grant, which is actually a better award that's the same amount. Basically a grant is money that you receive that you don't have to pay back."
Sherwood says even now they know that hundreds of incoming UH students who would otherwise get a B On Time loan are getting a Texas Grant instead.
"Right there will be a minimum of 580 students that will get the Texas Grant. We're still getting final transcripts from high schools, which is really the main determinant of whether or not they're eligible for either the Texas Grant or the B On Time Program. So we're not sure exactly what population we're working with, but it'll be at least 580 students that'll get the Texas Grant."
Sherwood says she can't speak for other universities, but she guesses that other state supported schools are dealing with this problem the same way, by providing the Texas Grant in place of the B On Time loan. She says it's really not a big issue at U of H. Jim Bell, Houston Public Radio News.