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TITLE 19EDUCATION
PART 1TEXAS HIGHER EDUCATION COORDINATING BOARD
CHAPTER 21STUDENT SERVICES
SUBCHAPTER AGENERAL PROVISIONS
RULE §21.1Fund Requirements for Student Loan Bonds Interest and Sinking Fund

There shall be deposited into the interest and sinking fund the following.

  (1) From the proceeds of the bonds, an amount of money sufficient to pay the interest on the bonds for a period of 24 months from the date of the bonds. Such funds so deposited should remain in the interest and sinking fund until used for the original purpose for which they were deposited. Bond resolutions provide that on the direction of the board, such money may be transferred to the Texas opportunity plan fund to the extent that it will not be needed because of money received as repayment of student loans and interest thereon, and such transfers should be made only when loan demand has exceeded expectations and no other source of funds for loans is available. It is the intent of this procedure to reduce transfers between funds to a minimum.

  (2) From the proceeds of the bonds, an amount which, when added to the amount now to the credit of the reserve portion, will be equal to the average annual principal and interest requirements on the bonds and the outstanding bonds. Such funds so deposited in the reserve portion of the interest and sinking fund should remain in the reserve portion and be used only in cases of emergency when no other source of funds is available other than first monies coming into the state treasury, or to make final payments of principal and interest to become due on the bonds. The amount of average annual principal and interest requirements shall be recomputed only at such times as immediately after each sale of additional bonds; or, in the event no bond sales occur during a fiscal year, only at the close of a fiscal year.

  (3) Money received in each fiscal year as repayment of student loans granted under the Act and interest thereon, including interest payments received from the federal government on behalf of student borrowers, sufficient to pay the interest on and principal of bonds to become due during the ensuing fiscal year and sufficient to maintain the reserve portion equal to the average annual principal and interest requirements on all bonds, outstanding bonds, and additional bonds at the time unpaid.

  (4) Money required by the constitutional provision and the Act to be transferred into the interest and sinking fund by the state treasurer out of first monies coming into the treasury of the State of Texas in each fiscal year not otherwise appropriated by the constitution.

  (5) Money in the interest and sinking fund, including the reserve portion, shall be used only for the purpose of paying interest on and principal of the bonds.


Source Note: The provisions of this §21.1 adopted to be effective January 1, 1976.

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