Planning for the future
Texas Guaranteed is negotiating with the U.S. Department of Education on what role it will play in the revamped student loan industry — and exactly how it will be paid for its services, Torres said.
The agency may be paid directly by the Education Department after going through a competitive bidding process with other agencies. Or it could work out individual contracts with Texas’ 146 colleges and universities to continue to provide services that include default and delinquency prevention, financial literacy and debt management programs, and training for financial aid administrators.
Once those details are ironed out, Texas Guaranteed plans to ask the state Legislature in January to amend the law that spells out its duties to reflect the realities of the new federal program.
As a public nonprofit, Texas Guaranteed receives no state appropriations, but the agency must justify its existence every 12 years under Texas’ sunset law. After passing the sunset process in 2004, the agency is up for review next in September 2017.
Currently, the Texas Education Code establishes the agency to specifically “administer a guaranteed student loan program.”
“With these changes, their role is questionable, especially under the existing statute,” said state Sen. Judith Zaffirini, D-Laredo. Zaffirini, head of the Higher Education Committee, said her staff is currently working with Texas Guaranteed officials to amend the statute.
Zaffirini added that Texas Guaranteed does valuable work and said she doesn’t foresee the agency being dismantled.
“All of those services are very important, especially debt management and financial literacy,” she said. “Many of the students that need the money the most lack that kind of information. They have to learn to manage