The bill, H.B. No. 319, amends the Texas Education Code to establish new standards for the interest rates on student loans issued by the Texas Higher Education Coordinating Board. It specifies that the board cannot impose stricter repayment ability standards on certain applicants unless they attend a school with a loan default rate of 15% or more, or as outlined in Section 52.36. Additionally, the bill modifies how the board sets interest rates, ensuring that the average rate is sufficient to cover bond interest and operational expenses, while also considering the applicant's risk of timely repayment based on factors such as the demand for their chosen degree and projected employment outcomes.

Furthermore, the bill introduces provisions for postponing interest payments while students are enrolled in participating institutions and allows for the collection of loan origination fees to help offset operational costs. The changes will take effect for student loans issued starting in the spring semester of 2026, with the overall implementation date set for September 1, 2025.

Statutes affected:
Introduced: Education Code 52.321, Education Code 52.36 (Education Code 52)