LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 30, 1999
TO: Honorable Teel Bivins, Chair, Senate Committee on
Education
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB713 by Cuellar (relating to student financial aid,
including the consolidation or repeal of student aid and
grant programs and the creation of grant programs to
provide financial assistance to students at institutions
of higher education who meet certain academic,
citizenship, financial need, and other requirements),
Committee Report 2nd House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB713, Committee Report 2nd House, Substituted: negative impact *
* of $(125,440,362) through the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(55,191,505) *
* 2001 (70,248,857) *
* 2002 (123,424,688) *
* 2003 (156,042,863) *
* 2004 (166,808,367) *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 1999 *
* 0001 *
* 2000 $(55,191,505) 6.0 *
* 2001 (70,248,857) 6.0 *
* 2002 (123,424,688) 6.0 *
* 2003 (156,042,863) 6.0 *
* 2004 (166,808,367) 6.0 *
***************************************************************************
Technology Impact
The Texas Higher Education Coordinating Board would have to develop new
information systems to administer these programs. The bill would
require tracking of students for a number of years to insure that they
complete the teaching requirement or repay the money.
Fiscal Analysis
The bill would establish the Texas Hope Grant Program and the Teach for
Texas Grant Program. The Hope Grant would provide college scholarships
for students who graduated high school not earlier than the 1998-99
school year. The student must have completed the recommended or advanced
high school curriculum and maintained a grade point average as prescribed
in the bill. If the student's high school did not offer the entire
recommended or advanced high school curriculum, the student must have
taken all the courses offered. Students would have to meet financial
need requirements and enroll at least three-fourths of a full course load
not later than the 16th month after graduating from high school. These
students must come from a low-income or middle-income family and
establish financial need as defined by the Coordinating Board. The
scholarships could be used by Texas residents at any institution of
higher education and would equal the average cost of tuition and fees at
a public university, community college, or technical institute in Texas.
The scholarship amount would be reduced only if other gift aid for which
the person is eligible exceeds the total cost of attendance. To
maintain the scholarship, a student would have to make satisfactory
academic progress toward a degree.
A Teach for Texas Grant could be double the amount of a Hope Grant.
After September 1, 2001, only college juniors or seniors who receive a
Hope Grant are eligible for a Teach for Texas Grant. For fiscal years
2000 and 2001, a junior or senior who has not received a Texas Hope
Grant, but meets all other qualifications for a Teach for Texas Grant and
the academic performance requirements of the Texas Hope Grant, could
receive a Teach for Texas Grant. The student would have to be in a
baccalaureate degree program in a teaching field that is experiencing a
critical shortage of teachers; or agree to teach in a public school that
is experiencing a critical shortage of teachers. A recipient would have
to teach full-time for five years to complete the obligation. A student
could receive both the Hope Grant and Teach for Texas Grant. The amount
of the Teach for Texas Grant would be double the amount of the Texas Hope
Grant.
The Coordinating Board would administer the program, including defining
financial need requirements. Each year, the Coordinating Board would
publish the amount of a scholarship for each type of institution. The
Coordinating Board would distribute program rules to each eligible
institution and each school district.
School districts would have to notify students of the scholarship program
and ensure that each student's transcript or diploma indicate the high
school curriculum completed by the student.
The bill would eliminate a number of existing tuition and fee exemption
and scholarship programs. A portion of the revenue from repealed
programs would be transferred to the Coordinating Board to fund these
grant programs. Another portion of the savings would be maintained by
the institutions.
Methodology
For purposes of this estimate, it is assumed that "financial need" refers
to students whose expected family contribution is zero. To determine
grant costs, the statewide average costs of tuition and fees at public
universities, community colleges, and technical institutes were used.
Estimates of the number of students eligible for Hope Grants were made
based on the number of high school students expected to complete the
recommended or advanced curriculum. Historical information on the rate
of high school graduates enrolling and being retained in institutions of
higher education was used to determine the number of students receiving
scholarships. To determine the number of students eligible for the Teach
for Texas Program in fiscal years 2000 and 2001, historical information
on the number of teachers certified from an undergraduate program were
used and assumptions about how many would meet the financial eligibility
and be willing to teach in the designated field or community were made.
Additional general revenue would be necessary to cover the increase in
formula funding for additional students.
The Coordinating Board indicates a need for one-time costs for developing
systems for awarding grants and tracking students in the programs.
There would be ongoing maintenance costs for these systems, as well as,
additional staff needed to administer the programs.
Local Government Impact
Community colleges would experience some savings from the repeal of
programs that exempt certain students from tuition and fees at these
institutions.
No significant impact on local school districts.
Source Agencies:
LBB Staff: JK, CT, PF