Do extra college credit hours taken at another school disqualify a student from B-On-Time loan forgiveness?

Plain-English summary

Texas used to run a program called the B-On-Time Loan, a no-interest student loan that could be completely forgiven if the student graduated efficiently. One way to qualify was to earn the degree without piling up too many credit hours: no more than six semester credit hours over the minimum the degree required. The Commissioner of Higher Education asked the AG about a specific student who seemed to fall right at that line.

The student earned a bachelor's degree that required 120 credit hours, finishing with 121 hours and a 3.03 grade point average, so on paper the student was only one hour over the minimum and within the forgiveness window. The wrinkle was that, during the same period, the student had also taken 36 credit hours at a different public university, paramedic training that the student's employer (the San Antonio Fire Department) required and paid for. If those 36 hours counted toward the cap, the student would blow past the six-hour cushion and lose forgiveness. So the question was whether outside hours like those count.

The AG worked through the statute, section 56.462. It tells you to include "transfer credit hours" in the total, but the AG read that term, using parallel language elsewhere in the Education Code, to mean hours the degree-granting institution actually recognizes and credits toward the degree. Here, the school that awarded the degree never gave credit for or transferred the 36 paramedic-training hours, so they were not transfer credit hours. They also did not fall into any of the categories the Legislature expressly excluded from the count (hours by examination, high school credit, or required developmental coursework).

That left a gap: the statute does not directly say what to do with hours earned elsewhere that the degree school never counted. Reading the statute as a whole, though, the AG concluded that every category the Legislature addressed ties back to the specific degree awarded, hours the degree-granting institution either granted or counted. So a court would likely conclude the Legislature did not mean to sweep in hours the degree school never credited. The bottom line: additional hours taken at another institution to keep a job, which do not push the total credited by the degree-granting school over the statutory limit, would not disqualify the student from having the B-On-Time loan forgiven.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The opinion itself notes that the B-On-Time Loan Program statute was repealed in 2015, so the program no longer issues new loans; this page describes how the law applied to an existing loan and is historical.

What the opinion meant for those who asked

The Texas Higher Education Coordinating Board (as the opinion described it): The opinion described the credit-hour calculation under section 56.462 as counting only hours the degree-granting institution awarded or counted toward the degree, and concluded the outside paramedic-training hours did not disqualify this student from forgiveness.

The student seeking forgiveness (as the opinion described it): The opinion described the 36 hours taken at another university to maintain employment as not "transfer credit hours" and not within any excluded category, so they did not count against the six-hour cushion.

Other B-On-Time borrowers and colleges (as the opinion described it): The opinion described the statutory limit as keyed to the degree actually awarded, so hours the degree-granting institution never credited would likely not count toward the cap.

Common questions

Did extra hours at another college cost this student loan forgiveness?
The AG concluded that a court would likely find they did not, because the degree-granting school never counted those hours toward the degree.

How did the B-On-Time loan forgiveness credit-hour rule work?
Under section 56.462, a student could have the loan forgiven for finishing the degree with a total number of semester credit hours that was not more than six hours over the minimum the degree required.

What counts as a "transfer credit hour" for this rule?
The AG read the term, using parallel Education Code language, to mean hours that the degree-granting institution recognizes and credits toward the undergraduate degree, not every hour a student earns somewhere.

Why didn't the 36 paramedic-training hours count?
The AG concluded those hours were not transfer credit hours (the degree school never credited them) and did not fall into any category the Legislature expressly excluded, and that the statute, read as a whole, counts only hours tied to the degree the institution awarded.

Does the B-On-Time program still exist?
The opinion notes the program's statute was repealed in 2015, so it no longer issues new loans. This opinion addressed an existing loan under the program.

Background and statutory framework

The Texas B-On-Time Loan Program, created in chapter 56, subchapter Q of the Education Code, provided no-interest loans to help students earn baccalaureate degrees, and section 56.462 allowed forgiveness either for finishing within a set time or for finishing without exceeding the credit-hour limit of not more than six hours over the minimum required (Tex. Educ. Code § 56.462). Section 56.462 directs that "transfer credit hours" be included in the total but does not define the term; the AG construed it, by analogy to parallel language, to mean hours that count toward the person's undergraduate degree at the awarding institution (Tex. Educ. Code § 54.2001).

The statute also excludes certain hours from the count, including required developmental coursework (Tex. Educ. Code §§ 51.3062, 51.306). The 36 hours the student took at another university were neither transfer credit hours nor within an excluded category. Reading the statute as a whole, the AG concluded that the credit-hour limit reaches only hours the degree-granting institution awarded or counted, so the outside hours did not disqualify the student from forgiveness under section 56.462.

Citations

Statutory provisions:

• Tex. Educ. Code § 56.462 (B-On-Time loan forgiveness; credit-hour limit and excluded categories)
• Tex. Educ. Code § 54.2001 (parallel "transfer credit hours" language counting toward an undergraduate degree)
• Tex. Educ. Code § 51.3062 (developmental coursework)
• Tex. Educ. Code § 51.306 (former developmental-coursework provisions)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0053
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2015/kp0053.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

December 21, 2015

Raymund A. Paredes, Ph.D. Opinion No. KP-0053
Commissioner of Higher Education
Texas Higher Education Coordinating Board Re: Eligibility for forgiveness of a B-On-
Post Office Box 12788 Time loan (RQ-0034-KP)
Austin, Texas 78711

Dear Commissioner Paredes:

You have requested an opinion regarding whether the Higher Education Coordinating Board (the "Board") should forgive a B-On-Time loan under particular circumstances. [1] Through chapter 56, subchapter Q of the Education Code, the Legislature created the Texas B-On-Time Loan Program, the purpose of which is "to provide no-interest loans to eligible students to enable those students to earn baccalaureate degrees at public and private or independent institutions of higher education in this state." [2] The Legislature has further authorized students who have received a Texas B-On-Time loan to have that loan forgiven if certain requirements are met. B-On-Time Act § 56.462, 2003 Tex. Gen. Laws at 2272-73 (amended 2005 and 2013). Section 56.462 includes two separate scenarios that would allow for loan forgiveness. Id. Subsection (1) allows for forgiveness for students who earn a degree within a set period of time. Id. Subsection (2) allows for forgiveness for students who earn a degree without exceeding the statutory limit of semester credit hours, regardless of the amount of time spent in pursuit of the degree. Id. The relevant language of section 56.462 states:

A student who receives a Texas B-On-Time loan shall be forgiven the amount of the student's loan if the student is awarded a baccalaureate degree at an eligible institution with a cumulative grade point average of at least 3.0 on a four-point scale or the equivalent:

(2) with a total number of semester credit hours, including transfer credit hours and excluding hours earned exclusively by examination, hours earned for a course for which the student received credit toward the student's high school academic requirements, and hours earned for developmental coursework that an institution of higher education required the student to take under Section 51.3062 or under the former provisions of Section 51.306, that is not more than six hours more than the minimum number of semester credit hours required to complete the degree.

Id.

You explain that a particular student has applied for forgiveness of a loan under subsection (2) after obtaining "a baccalaureate degree that required 120 credit hours ... with a grade point average ... of 3.03 and with 121 credit hours, more than ten percent ... of which were awarded on the basis of 'Life/Work Experience.'" Request Letter at 3. You explain that under normal circumstances, the loan might be forgiven pursuant to section 56.462(2) of the B-On-Time Act. Id. You also note, however, that the student took "36 credit hours at a different public university during the same time frame, ostensibly to obtain or maintain a job with the student's employer." [3] Id. You suggest that some of those hours may have been considered by the institution that awarded the degree in crediting the student hours for "Life/Work Experience." Id. You inform us that the hours for Life/Work Experience are included in the 121 credit hours that the student received, being only one more than the number required for the student's degree. See id. You question, however, whether the additional hours taken to maintain employment disqualify the student from loan forgiveness. Id. You therefore ask whether the Board should forgive the student's B-On-Time loan or whether the Board should instead require repayment. Id.

Section 56.462 provides some guidance as to how to calculate the "total number of semester credit hours." B-On-Time Act § 56.462, 2003 Tex. Gen. Laws at 2273 (amended 2005 and 2013). The Legislature has provided that "transfer credit hours" shall be included in calculating a student's total number of semester credit hours. Id. Section 56.462 does not define the term "transfer credit hours," but another provision in the Education Code using similar language explains that such hours "count toward the person's undergraduate degree." TEX. EDUC. CODE § 54.2001(b). Thus, the Legislature likely intended the term "transfer credit hours" in section 56.462 to refer to hours earned at another educational institution that the institution where the baccalaureate degree is earned recognizes and grants credit for undergraduate degree purposes. Based on your description, along with briefing submitted to this office, it appears that the institution from which the student graduated did not give credit for, or transfer, additional hours beyond those included in the 121 credit hours. [4] Therefore, the thirty-six additional hours about which you ask would not constitute transfer credit hours.

The Legislature has also explained that certain credit hours should not be included in the calculation of total number of semester credit hours. B-On-Time Act § 56.462, 2003 Tex. Gen. Laws at 2273 (amended 2005 and 2013). In particular, "hours earned exclusively by examination, hours earned for a course for which the student received" high school credit, and "hours earned for developmental coursework that an institution of higher education required the student to take" to address a student's deficiencies in the student's readiness to perform freshman-level academic coursework shall not be included in the calculation. Id.; see also TEX. EDUC. CODE § 51.3062(i) (concerning developmental coursework). The thirty-six additional hours taken at a different university during the time the student obtained a baccalaureate degree would not fall into a category of hours that the Legislature has expressly excluded from the calculation of total hours.

Thus, section 56.462 is silent as to whether the calculation of "total number of semester credit hours" should include credit hours earned at a different educational institution than the one that awarded the degree and that are not counted towards the baccalaureate degree awarded. B-On-Time Act § 56.462, 2003 Tex. Gen. Laws at 2273 (amended 2005 and 2013). However, all of the categories of credit hours addressed by the Legislature relate back to the specific "baccalaureate degree [awarded] at an eligible institution." Id. All are credit hours either awarded by the degree-granting institution or at least counted by the degree-granting institution in awarding the degree. Based on a reading of the statute as a whole, a court would likely conclude that the Legislature did not contemplate including in the calculation of total number of semester credit hours any hours for which the degree-granting institution did not give credit. A court would therefore likely conclude that additional credit hours taken at an institution other than the one awarding the baccalaureate degree that do not cause the total hours credited to the student by the institution awarding the baccalaureate degree to exceed the statutory limit and that were taken for the purpose of maintaining a job with the student's employer do not disqualify the student from having a B-On-Time loan forgiven under section 56.462 of the Act.

SUMMARY

A court would likely conclude that additional credit hours taken at an institution other than the one awarding the baccalaureate degree that do not cause the total hours credited to the student by the institution awarding the baccalaureate degree to exceed the statutory limit and that were taken for the purpose of maintaining a job with the student's employer do not disqualify the student from having a B-On-Time loan forgiven under section 56.462 of the Act.

Very truly yours,

KEN PAXTON
Attorney General of Texas

CHARLES E. ROY
First Assistant Attorney General

BRANTLEY STARR
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

Assistant Attorney General, Opinion Committee

[1] See Letter from Raymund A. Paredes, Comm'r of Higher Ed., to Honorable Ken Paxton, Tex. Att'y Gen. at 3 (July 14, 2015), https://www.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] Act of June 1, 2003, 78th Leg., R.S., ch. 779, sec. 1, 2003 Tex. Gen. Laws 2270, 2270-73, amended by Act of May 26, 2005, 79th Leg., R.S., ch. 1230, §§ 9-11, 2005 Tex. Gen. Laws 3972, 3976-77, and Act of May 26, 2013, 83d Leg., R.S., ch. 1155, §§ 14-21, 2013 Tex. Gen. Laws 2853, 2857-60 (the "B-On-Time Act" or "Act"), repealed by Act of May 22, 2015, 84th Leg., R.S., ch. 1243, secs. 6(d), 8(3), 2015 Tex. Gen. Laws 4195, 4197-98.

[3] Briefing submitted to this office on behalf of the student states that the student was employed by the San Antonio Fire Department, which required and paid for him to take thirty-six hours of paramedic training. Letter from Franklin Hopkins to Virginia Hoelscher at 4 (Aug. 17, 2015) (on file with the Op. Comm.) ("Hopkins Brief").

[4] See Request Letter at 3 (explaining that the student graduated with 121 credit hours for a degree that required 120 hours to complete); Hopkins Brief at 3 (explaining that the institution from which the student graduated "only counted ... 121 hours").