Texas House Bill HB2705

Texas 2017 - 85th Regular

Caption

Relating to alternative education loans and to the use of higher education private activity bonds by qualified alternative education loan lenders.

Impact

If passed, HB 2705 would primarily affect the Texas Education Code and Government Code by allowing municipalities to issue revenue bonds. This can serve as a financial catalyst for nonprofit corporations engaged in student and alternative loan servicing. The potential influx of capital through these bonds aims to improve the opportunities available for students and former students, particularly those who may not qualify for standard student loans. Additionally, the bill includes provisions for oversights such as the requirement for financial accountability and adherence to stipulated financial guidelines.

Summary

House Bill 2705 addresses the provision of alternative education loans and the use of higher education private activity bonds by qualified alternative education loan lenders. This legislation aims to enhance the accessibility of financing options available for students pursuing education at accredited institutions, facilitating a broader range of loan alternatives beyond traditional guaranteed student loans. By making amendments to existing education and government code sections, the bill outlines the parameters through which these loans can be granted, refinanced, or purchased, emphasizing the role of nonprofit corporations in administering these funds.

Contention

While the bill presents advantages in terms of increased funding for education, there may be points of contention among stakeholders. Critics may raise concerns about the implications of expanding alternative loan options without sufficient regulatory measures, which could lead to higher levels of debt for students. Additionally, observers may debate whether the reliance on nonprofit corporations for administering these loans is sufficient to protect borrowers from unfavorable lending terms. These discussions will be essential as the bill progresses through legislative scrutiny.