Student Loans for College Students in Texas
Include These Programs in Your Loan Search
College funding draws from resources that don’t require repayment, like scholarships and grants, but these are not the only sources of financial aid for university students. Student loans close the affordability gap left after gift-aid is exhausted, providing low-interest options for students and parents paying for higher education.
In the past, the Federal Government dispensed low-interest fixed-rate loans with the help of private banks and credit unions. Stafford Loan amounts were determined by government agencies, then students receiving the federally-backed aid would enter into loan agreements with private lenders.
To cut out the middleman, and save money associated with administering the loans, the Department of Education now acts as its own lender for Subsidized Federal Direct Student Loans. Lending limits hover around five-thousand dollars annually, per student, and rates are fixed, so there are no surprises during repayment. Competitive student loan interest rates are hard to beat in the private sector, but for students needing to extend their borrowing capacity, private alternative financing is available.
Government repayment options facilitate success, giving graduates several alternatives for making good on student debt. Graduated repayment plans that start with small payments, and then catch-up with larger payments over time, allow payments to grow alongside graduates’ earning power. Other income-based repayment plans match payments with students’ ability to pay, by requiring that a certain percentage of gross income be applied to satisfy student debt.
Federal aid runs deep, but supplemental programs from state governments also provide valuable resources for needy students attending state schools. The Texas Higher Education Coordinating Board (THECB) maintains an accessible and comprehensive online portal for college bound Texas students seeking financial aid for school. State students and parents find information and resources there, relating to 529 college savings plans, Federal Education Loans, private scholarships and grants, alternative student loans, as well as financial aid specifically designated for Texas students. Texas student loans are sometimes referenced as the Hinson-Hazlewood Loan Program, or HH Loans.
THECB Loan Programs for Texas Higher Education
The THECB provides consistent, low-interest college financing opportunities for state students. The loan programs are designed to assist state students who qualify to pay in-state tuition rates. Texas holds on to student loans, rather than selling them to other creditors. As a result, student loans are serviced by the state over their entire lifetimes, in these three distinct categories:
- College Access Loans (CAL)
- Texas Armed Services Scholarship Program (TASSP)
- Texas B-On Time Loan (BOT)
College Access Loans provide supplemental funding for Texas college students who need it. The state-sponsored loan is a credit-based opportunity, so worthy credit references and cosigners are required to land assistance. The loans are open to Texas students, who need not demonstrate financial need to qualify. However, federal awards and other financial aid are first subtracted from the cost of each student’s education, before CAL amounts are determined. Additional eligibility requirements include:
- Texas resident
- Enrolled at least half-time, or six credits
- Pursuing associate’s, bachelor’s, graduate or higher degree OR
- Enrolled in alternative educator certification program
- Meet satisfactory academic progress requirements set forth by university of attendance
Minimum loans are $100, and maximums relate to the actual cost of attending, minus any other aid received. A 3% loan origination fee is deducted from each award, and the state puts-forth these specific requirements for cosigners attached to CAL loans:
- Favorable credit history
- At least twenty-one years old
- Not the spouse of the borrower
- U.S. Citizen
- Regular, confirmed income stream from employment
Texas Armed Services Scholarship Program serves a special group of students recognized each year by members of the state legislature and executive branch. The Governor and Lieutenant Governor each get to choose two annual recipients, and state senators and representatives each select one. The effort is aimed at stimulating enrollment into the state National Guard, Coast Guard or Merchant Marines, and to encourage students to become commissioned officers in United States Armed Services.
In addition to nomination from an elected official, qualified candidates meet at least two of these four conditions of eligibility:
- Graduate of the Distinguished Achievement Program or International Baccalaureate Program
- Maintained 3.0 minimum high school GPA
- Score 1590 on SAT, or minimum 23 on ACT
- Graduate among the top one-third of high school academic class.
Continued eligibility requires candidates to remain in college ROTC programs, and exhibit satisfactory academic progress, as determined by campus standards. Aid cannot be sought beyond an applicant’s successful earning of bachelor’s-level credentials. Maximum awards are valued at $10,000 each.
Texas B-On-Time Loans are reserved for the neediest applicants. The zero-interest loans are administered on individual participating college campuses across the state. Once approved, your financial aid office will direct you to submit a promissary note and appropriate application materials. Texas college students qualify for loans by meeting these basic eligibility requirements:
- Resident of Texas
- Graduated from high school in 2003 or after
- No bachelor’s degree earned previously
- Enrolled full-time
- Enrolled in approved program leading to undergraduate degree or certificate
- Submit timely FAFSA, and qualify for federal aid
Loans require a 3% origination fee, and are worth as much as $3500 per semester.
Alternative Loans for Texas Students
Government loans carry the best interest rates, and the most favorable repayment terms. Educational funding supplied by State and Federal Government agencies offers flexibility that private sector lenders cannot match. Subsidized loans, for example, are not available from banks, credit unions and other lenders.
Private loans for students require successful applicants to have good credit, so be prepared to submit your history of timely payments and positive credit outcomes. If your record is sparse, or needs additional references, enlist the help of a worthy cosigner who’s willing to back your education.