<PAGE> 1
		       SECURITIES AND EXCHANGE COMMISSION
			      Washington, D.C. 20549
			       ____________________

  x           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
		      THE SECURITIES EXCHANGE ACT OF 1934

		 For the fiscal year ended December 31, 1996

				    OR

	      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
		      THE SECURITIES EXCHANGE ACT OF 1934

		     For the transition period from     to
			Commission File Number 33-20166

			       _________________

	RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (TEX-LA) 1988-T1
	(Exact name of registrant as specified in its charter)

				   NEW YORK
	(State or other jurisdiction of incorporation or organization)

				  36-6878773
		     (I.R.S. Employer Identification Number)

		  2201 Cooperative Way, Herndon, VA 20171-3025
		    (Address of principal executive offices)
	(Registrant's telephone number, including area code, is 703-709-6700)

			      ___________________

	Securities Registered pursuant to Section 12(b) of the Act:  None.

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.

				 Yes   X      No

		  The Registrant has no common or voting stock.

		       DOCUMENTS INCORPORATED BY REFERENCE:

1.      Form of Trust Agreement
2.      Loan Agreement
3.      Loan Guarantee and Servicing Agreement

Exhibit Index located on page 13.

<PAGE> 2
Part I

Item 3. Legal Proceedings

			None.


Item 4. Submission of Matters to a Vote of Security Holders

			None.
<PAGE> 3
Part II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
	Matters

	a)              There is no established trading market for the
			certificates representing ownership of the beneficial
			interest in the Trust.

	b)              As of March 28, 1997 there was one holder of
			certificates representing ownership of the
			beneficial interest in the Trust.


Item 8. Financial Statements and Supplementary Data

			See attached audited financial statements.


Item 9. Disagreements on Accounting and Financial Disclosure

			None.



Part III

Item 13.        Certain Relationships and Related Transactions

			None.

<PAGE> 4
Part IV

Item 14.        Exhibits, Financial Statement Schedules and Reports
			on Form 8-K

	a)      The following documents are filed as part of this report:

			1.      Financial Statements
				Report of Independent Public Accountants
				Statement of Assets and Liabilities as of
					December 31, 1996 and 1995
				Statement of Income and Expenses, for the
				Years Ended December 31, 1996, 1995 and 1994
				Statement of Cash Flows, for the Years Ended
					December 31, 1996, 1995 and 1994
				Notes to Financial Statements

			2.      Financial Statement Schedules are omitted
				because they are inapplicable.

			3.      Exhibits

				Exhibit
				Number          Description of Exhibit

				 4.1            Form of Trust Agreement,
						including the form of Rural
						Electric Cooperative Grantor
						Trust Certificate
						(incorporated by reference
						to Exhibit 4.1 to Registration
						Statement on Form S-1 [No.
						33-20166]).

				10.1            Loan Agreement (incorporated
						by reference to Exhibit 10.1
						to Registration Statement on
						Form S-1 [No. 33-20166]).

				10.2            Loan Guarantee and Servicing
						Agreement (incorporated by
						reference to Exhibit 10.2 to
						Registration Statement on Form
						S-1 [No. 33-20166]).

		b)      Form 8-K dated December 17, 1996.
			Semi-annual Report to Certificateholders dated December
			15, 1996.

Supplemental information to be furnished with reports filed pursuant to
Section 15(d) of the Act by Registrants which have not registered securities
pursuant to Section 12 of the Act.

	No annual report, proxy statement, form of proxy or other proxy
	soliciting material has been sent to Certificateholders, and the
	Registrant does not presently contemplate sending any such material
	subsequent to the filing of this report.

<PAGE> 5
	Pursuant to the requirements of Section 13 or 15(d) of the Securities
	Act of 1934, the Registrant has duly caused this report to be signed
	on its behalf by the undersigned, thereunto duly authorized, in the
	County of Fairfax, Commonwealth of Virginia on the 28th day of March,
	1997.


	RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (TEX-LA) 1988 T-1

			By:     NATIONAL RURAL UTILITIES COOPERATIVE
				FINANCE CORPORATION as Servicer

				By:     /s/ Sheldon C. Petersen
					Sheldon C. Petersen, Governor and
					   Chief Executive Officer
<PAGE> 6

			RURAL ELECTRIC COOPERATIVE GRANTOR
			       TRUST (TEX-LA) 1988-T1


		FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995,
	       AND FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
			   TOGETHER WITH AUDITORS' REPORT
 <PAGE> 7


	Report of Independent Public Accountants



To the Trustee of
Rural Electric Cooperative Grantor Trust
	(Tex-La) 1988-T1, and

To the Board of Directors of
National Rural Utilities Cooperative
	Finance Corporation:


We have audited the accompanying statements of assets and liabilities of
Rural Electric Cooperative Grantor Trust (Tex-La) 1988-T1 as of December 31,
1996 and 1995, and the related statements of income and expenses and cash
flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform an audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Rural Electric
Cooperative Grantor Trust (Tex-La) 1988-T1 as of December 31, 1996 and 1995,
and the results of its operations and its cash flows for the years ended
December 31, 1996, 1995 and 1994, in conformity with generally accepted
accounting principles.



March 24, 1997
Washington, D. C.




<PAGE> 8
<TABLE>
<CAPTION>
       RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (TEX-LA) 1988-T1

		  STATEMENTS OF ASSETS AND LIABILITIES

		     AS OF DECEMBER 31, 1996 AND 1995

    _____________________________________________________________________


					 1996                 1995

<S>                                 <C>                   <C>
ASSETS

Interest Receivable                     $77,897               $86,689

Note Receivable                      11,075,000            12,325,000

     Total Assets                   $11,152,897           $12,411,689





LIABILITIES

Interest Payable-
Grantor Trust Certificates              $75,587               $84,118

Servicer Fees Payable                     2,310                 2,571

Rural Electric Cooperative
  Grantor Trust Certificates         11,075,000            12,325,000

     Total Liabilities              $11,152,897           $12,411,689

</TABLE>










	      The accompanying notes are an integral part
		      of these financial statements




<PAGE> 9
<TABLE>
<CAPTION>
	  RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (TEX-LA) 1988-T1

		     STATEMENTS OF INCOME AND EXPENSES

	   FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

    _____________________________________________________________________



					1996          1995          1994
<S>                                 <C>            <C>           <C>
INCOME:
  Interest on note receivable       $1,147,058     $1,253,440    $1,350,269


EXPENSES:
  Interest on
  grantor trust certificates         1,113,044      1,216,272     1,310,229
  Servicer fees                         34,014         37,168        40,040

      Total Expenses                 1,147,058      1,253,440     1,350,269

      Net Income                     $       -      $       -     $       -


</TABLE>









		The accompanying notes are an integral part
		     of these financial statements

<PAGE> 10
<TABLE>
<CAPTION>
	 RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (TEX-LA) 1988-T1

			   STATEMENTS OF CASH FLOWS

	    FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

   _____________________________________________________________________

				 1996            1995             1994
<S>                          <C>               <C>                <C>
CASH FLOWS FROM
  OPERATING ACTIVITIES:
  Interest received on
    note receivable          $1,147,058        $1,253,440         $1,350,269
  Interest paid to
    Certificateholders       (1,113,044)       (1,216,272)        (1,310,229)
  Fees paid to Servicer        ( 34,014)          (37,168)           (40,040)

     Net cash provided by
       operating activities           -                 -                  -


CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from principal
    payment on note           1,250,000         1,125,000           1,025,000

    Net cash provided from
     investing activities     1,250,000         1,125,000           1,025,000


CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payment to
    Certificateholders       (1,250,000)       (1,125,000)        (1,025,000)

    Net cash used in
     financing activities    (1,250,000)       (1,125,000)        (1,025,000)

NET CHANGE IN CASH                     -                -                  -

CASH, beginning of year                -                -                  -

CASH, end of year              $       -        $       -          $       -

ACCRUAL TO CASH BASIS RECONCILIATION:
  Accrual basis income         $       -        $       -          $       -
  Change in accrual accounts:
   Decrease in interest
    receivable                    8,792            7,912            7,210
   Decrease in interest
    payable                      (8,531)          (7,678)          (6,996)
   Decrease in servicer
    fees payable                   (261)            (234)            (214)

     Total change in
      accrual accounts                 -               -                   -

Net cash provided by
   operating activities        $       -       $       -           $       -
</TABLE>
		     The accompanying notes are an integral part
			    of these financial statements

<PAGE> 11



		 RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (TEX-LA) 1988-T1

			      NOTES TO FINANCIAL STATEMENTS

		       AS OF DECEMBER 31, 1996, 1995 AND 1994


1.      ORGANIZATION AND OPERATIONS

	Rural Electric Cooperative Grantor Trust (Tex-La) 1988-T1 (the
	"Trust") was formed under a Trust Agreement dated February 15, 1988
	among National Rural Utilities Cooperative Finance Corporation
	("CFC"), Tex-La Electric Cooperative of Texas, Inc. (the
	"Cooperative") and The First National Bank of Chicago (the Trustee").
	On that date, CFC made a loan to the Cooperative which issued a note
	(the "Note"), evidencing the borrowing, to the Trust.  The Trust
	issued to CFC Rural Electric Cooperative Grantor Trust (Tex-La) 9.10%
	Certificates Due 2002 (the "Certificates") in the amount of
	$17,120,000.  The Certificates are solely the obligations of the
	Trust and are not insured or guaranteed by CFC, the Cooperative, the
	Trustee, the Rural Utilities Service ("RUS") of the United States
	Department of Agriculture ("USDA") nor any other governmental agency.
	Each Certificate represents an undivided fractional interest in the
	Trust.  CFC is the depositor of the Trust and acts as Servicer of the
	Note.   CFC filed, on behalf of the Trust, a Registration Statement
	on Form S-1 (Registration No. 33-20166) which become effective on
	March 9, 1988, and CFC resold the Certificates thereunder.

	The assets of the Trust consist primarily of the Note, bearing
	interest at 9.38% and maturing 2002,  which is guaranteed (the
	"Guarantee") as to timely payment of principal and interest by the
	United States of America, acting through the Administrator of RUS.
	The amounts of principal and interest payments on the Note held by
	the Trust are sufficient to cover the scheduled principal and
	interest payments on the Certificates issued by the Trust and the
	scheduled amounts of servicer fees.  The General Counsel of the USDA
	has issued an opinion that the Guarantee is supported by the full
	faith and credit of the United States of America.

	Debt service and servicer fee payments on the Note are made to the
	Trustee semi-annually (June 4 and December 4) by the Cooperative.
	The Trustee deposits all such receipts in the Trust account.  The
	Trustee is authorized by the Trust Agreement to invest all funds in
	the Trust account at the direction of CFC in certain eligible
	investments that mature no later than the business day next preceding
	the day (June 15 and December 15) such amounts are to be distributed
	to the Certificateholders and the Servicer.  The interest earned on
	the investments is distributed to the Cooperative.  Any funds that
	are not so invested must be held by the Trustee in the Trust account.
	The Trustee may not reinvest any returns of principal or investment
	earnings on eligible investments and the Trustee may not sell any
	eligible investment prior to its maturity except, at the direction
	of CFC, to preserve the value of the corpus of the Trust.

	On or before five business days after each date on which payments
	are made on the Certificates, the Trustee is obligated to supply
	the holders of such Certificate a report provided by the Servicer,
	which includes certain pertinent information as to how the payment
	is to be allocated to principal, interest, servicer fees and premium,
	if any, as well as the principal balance outstanding after such
	payment.

	The fiscal year of the Trust is the calendar year.  Within the
	prescribed period of time for tax reporting purposes, after the
	end of each calendar year during the term of the Trust Agreement,
	the Trustee is obligated to prepare and mail to each
	Certificateholder of record for the Trust, at any time during each
	year, a report setting forth the information as is reasonably
	necessary for the preparation of such Certificateholder's Federal
	income tax return.

<PAGE> 12


	Payments of principal on the Certificates are scheduled to be repaid
	over a period of thirteen years which began in 1990.  The principal
	payments over the next 5 years and thereafter are as follows:


	1997                                   $       1,400,000
	1998                                           1,550,000
	1999                                           1,725,000
	2000                                           1,925,000
	2001                                           2,125,000
	Thereafter                                     2,350,000

	Total                                  $      11,075,000

	The Certificates are not subject to full redemption prior to December
	15, 1997.  Thereafter, such Certificates are subject to optional
	redemption, for the entire remaining balance and without premium,
	upon redemption or purchase of the related Note.  The Trust Agreement
	will terminate after payment in full has been made on the
	Certificates issued thereunder.


2.      TAX STATUS OF THE TRUST

	Milbank, Tweed, Hadley & McCloy, counsel to CFC, has advised CFC
	with respect to the Trust that, in its opinion, (i) the Trust will
	not be classified as an association taxable as a corporation, but
	will be classified as a grantor trust and (ii) each Certificateholder
	will be treated for Federal income tax purposes as the owner of an
	undivided fractional interest in each of the assets held by the
	Trust.

	It is expected that the Trust will not have any liability for
	Federal or state income taxes for the current or future years.


3.      INTEREST AND SERVICER FEE ACCOUNTING

	The Trust records interest income as it is earned and accrues
	interest expense and servicer fees as they are incurred.
	Servicer fees represent ten basis points of the outstanding
	principal balance of the Certificates and the Note and recognition
	of conversion fees over the life of the loan.


4.      FAIR VALUE OF FINANCIAL INSTRUMENTS

	Use Of Estimates

	The preparation of financial statements in conformity with generally
	accepted accounting principles requires management to make estimates
	and assumptions that affect the reported amounts of assets and
	liabilities at the date of the financial statements and the reported
	amounts of expenses during the reported period.  The estimates
	involve judgments with respect to, among other things, various
	future factors which are difficult to predict and are beyond the
	control of the Trust.  With regards to the fair values below, actual
	amounts could differ from these estimates.



<PAGE> 13
	The following disclosure of the estimated fair value of financial
	instruments is made in accordance with FASB Statement No. 107,
	"Disclosure about Fair Value of Financial Instruments."  Whenever
	possible, the estimated fair value amounts have been determined
	using quoted market information as of December 31, 1996 and 1995,
	along with other valuation methodologies which are summarized below.
	Below is a summary of significant methodologies used in estimating
	fair value amounts and a schedule of fair values at December 31,
	1996 and 1995.

	The carrying amounts reported for Interest Receivable, Interest
	Payable - Grantor Trust Certificates, and Servicer Fees Payable
	approximate fair values due to the short term maturity of these
	instruments.

Note Receivable

Fair value is estimated by discounting the future cash flows using the
current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities.


Rural Electric Cooperative Grantor Trust Certificates

The fair value of the Certificates is estimated using quoted market prices
for similar notes over the same remaining maturities.

The carrying and estimated fair values of the Trust's financial instruments
as of December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>
					   1996                            1995
				   Carrying        Fair           Carrying         Fair
				    Value          Value           Value           Value
<S>                              <C>            <C>            <C>              <C>
Assets:
Interest Receivable                  77,897         77,897          86,689          86,689
Note Receivable                  11,075,000     12,491,061      12,325,000      14,595,858

Liabilities:
Interest Payable - Grantor
Trust Certificates                   72,587         75,587          84,118          84,118
Servicer Fees Payable                 2,310          2,310           2,571           2,571
Rural Electric Cooperative
  Grantor Trust Certificates     11,075,000     12,502,837      12,325,000      14,574,395

</TABLE>


	RURAL ELECTRIC COOPERATIVE GRANTOR TRUST (TEX-LA) 1988 T-1



		Exhibit Index


Exhibit
Number          Description of Exhibit

 4.1            Form of Trust Agreement, including the form of Rural
		Electric Cooperative Grantor Trust Certificate (incorporated
		by reference to Exhibit 4.1 to Registration Statement on
		Form S-1 [No. 33-20166]).

10.1            Loan Agreement (incorporated by reference to Exhibit 10.1
		to Registration Statement on Form S-1 [No. 33-20166]).

10.2            Loan Guarantee and Servicing Agreement (incorporated by
		reference to Exhibit 10.2 to Registration Statement on Form
		S-1 [No. 33-20166]).

<END>