How to Get or Refinance Texas Student Loans

How to Get or Refinance Texas Student Loans

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The average Texas undergraduate in the class of 2018 left school with $27,293 in student loan debt, according to The Institute for College Access & Success — so it’s no surprise that many college grads need information about student loans in Texas.

If you’re in need of assistance on how to pay for school, here’s your guide to Texas student aid, including loans, scholarships and grants. Specifically, let’s look at:

Texas student loans, scholarships and more
Federal student loans in Texas
Private student loans in Texas
Plus: In-state vs. out-of-state tuition in Texas

Texas student loans, scholarships and more

First, let’s look at some of the programs special to the state. Here are ways to access loans and scholarship awards earmarked for Texas students:

College Access Loan Program

This program is aimed at helping Texas college students cover funding gaps between their Texas student aid and their overall costs, through loans serviced by the Texas Higher Education Coordinating Board.

In order to meet eligibility requirements for this loan, you must meet credit criteria (or have a cosigner who does), as well as be classified as a resident of Texas by the school you’re attending. You must borrow at least $100, and your total amount borrowed can be up to the cost of attendance, minus any other aid you receive from the state or the federal government. As of July 31, 2020, the loan carried with a 4.20% fixed annual rate with noncapitalized interest and repayment periods of 10 or 20 years, depending on how much you borrow.

Education and training vouchers for youths aging out of foster care

For those looking for Texas student grants and loans, these vouchers can help pay for school if you’re aging out of the foster care system. If you’re at least 16 years old and likely to remain in foster care until age 18, or if you’re younger than 21 and were either adopted after age 16 or aged out of foster care, you can apply for one of these vouchers, which offers up to $5,000 a year to help with college or a training program.

In order to receive the voucher, students must enroll for at least six semester hours at an eligible institution.

Fifth Year Accounting Student Scholarship Program

Students planning to become certified public accountants (CPAs) can get help paying for an additional year of college with this program. This is an example of a Texas student grants and loan program that’s very specific and requires that you go into a particular profession in order to benefit.

In order to be eligible for this scholarship, you need to be enrolled at a participating school and have completed at least 120 hours of coursework (including 15 semester credit hours of accounting classes). You must also plan to take the CPA exam in the state of Texas. You do have to demonstrate financial need, so the school you attend will review your information to see if you qualify.

The award amount is up to $5,000 to help pay for additional education to become a CPA.

Texas Armed Services Scholarship Program

When it comes to Texas college student loans, this scholarship program is an interesting hybrid. You sign a promissory note with the authority that issues Texas higher education student loans for the program, but you don’t have to repay the money if you meet the requirements of the scholarship.

In order to qualify for this scholarship you’d need to:

  • Have a GPA of at least 3.0 in high school
  • Receive a 1070 on the SAT or a 23 on the ACT
  • Be ranked in the top one-third of your graduating class
  • Be enrolled with the ROTC or other commissioning program at college
  • Register with the Selective Service (or be exempt)
  • Continue to make satisfactory progress while in college

On top of that, you must be appointed by a state political leader. The governor and the lieutenant governor can each appoint two students, and each state senator and state representative can appoint one student.

As long as you meet the conditions and then serve as a commissioned officer in any branch of the United States Armed Services or commit to serve for four years in one of the Texas National Guard units, you can receive the scholarship and you won’t have to worry about student loan repayment.

With this scholarship, you can receive the lesser of $10,000, or an amount that wouldn’t exceed your cost of attendance, minus what you’d earn with a military contract and any additional financial aid.

Texas Educational Opportunity Grant Program

When looking into Texas college loans and grants, those attending a two-year program can benefit from this program. This program can reduce your need for student loans in Texas if you plan to go to a two-year public college or technical institute. In order to qualify, you’ll need to demonstrate financial need, be enrolled at least half-time and can’t have attempted more than 30 semester credit hours.

You can receive funding amounts of up to the following, depending on the type of school you attend:

  • Public community college: $4,965
  • Public state college: $5,961
  • Public technical institute: $8,601

Funds are limited, so not everyone who is eligible is guaranteed a grant. When applying for scholarships and grants, being aware of limited funds is important.

Texas Public Educational Grant Program

Designed to help students who demonstrate need, this program is aimed at those attending public colleges and universities in the state of Texas — and you don’t have to be a Texas resident to qualify. However, each school has its own priorities and requirements, and will decide how to provide the scholarship and the amount.

Toward EXcellence, Access, and Success Grant Program

The TEXAS Grant is designed to help those with financial need complete a program at a public university or health-related institution. There are different pathways to enroll in, depending on whether you enter college after high school, after finishing an associate degree, after being discharged from the military or as a transfer student. The main requirement, however, is that you demonstrate financial need.

Eligible schools evaluate applications and decide how much you need, and whether you meet need-based requirements. The maximum award amount for the 2020-21 academic year is $5,039 per semester.

Tuition Equalization Grant Program

If you’re going to a nonprofit private college in Texas and can demonstrate financial need, this is one of the Texas student grants and loans that can help you pay for school. Basically, the idea is to provide students with the ability to get help paying for school if they go to an eligible private school whose tuition is higher than a comparable public school. You must be enrolled at least three-quarters time and working on a first associate, bachelor, master, professional or doctoral degree.

The maximum award amount is $3,420 per year, or $5,130 per year for those who have exceptional need. You’ll need to fill out a Free Application for Federal Student Aid (FAFSA) in order to demonstrate need.

Federal student loans in Texas

When getting student loans in Texas, start with federal loans. You need to fill out a FAFSA in order to be eligible for federal Texas college student loans. There are three main types of federal student loans:

  1. Direct unsubsidized loans: These are loans available to undergraduate and graduate students, regardless of whether or not you demonstrate financial need. Interest begins accruing with the first disbursement.
  2. Direct subsidized loans: If you’re an undergrad and meet certain need-based criteria, you can get subsidized loans, for which the government pays interest while you’re in school.
  3. PLUS loans: These are loans for those who need more funding to pay for college after reaching the limit for direct loans. PLUS loans have some credit criteria and higher interest rates. However, parents can get PLUS loans to help their children.

Interest rates adjust each school year, but everyone pays the same rate, regardless of their credit. It’s important to note that federal loans come with various options for repayment:

On top of that, federal student loans come with protections, such as automatic deferment in some cases and a requirement to provide forbearance if you meet certain conditions.

Private student loans in Texas

On the other hand, you can get Texas higher education student loans through private lenders. Private student loans can come from various sources, including banks, and credit unions and online lenders, as well as local options like the Texas Higher Education Coordinating Board.

Realize, though, that terms vary by lender. There is no uniformity in the private loan interest rate you’re charged, and your credit information will be considered. You might be able to get a private student loan if you have a cosigner, but the credit requirements are much more stringent. Additionally, you won’t have the same protections, although some private lenders might offer a hardship program if you need it.

It’s also possible to get a student loan refinance in Texas. You can start with federal loans and then refinance to private loans if you qualify for a lower interest rate. However, before you refinance, you should figure out if it makes sense for you to forgo federal loan protections. Once you refinance to a private loan, you won’t be able to revert back to federal loans.

In-state vs. out-of-state tuition in Texas

Tuition costs vary deeply based on the school, the type of degree you get, your program of study, the number of credit hours and whether you qualify for in-state tuition. Here are some examples of the difference between in-state and out-of-state tuition in several Texas public institutions for the 2020-21 year:

Texas Tech University

  • Undergraduate tuition and fees (in state): $11,600
  • Undergraduate tuition and fees (out of state): $23,870

University of Texas at Austin

  • Undergraduate tuition and fees (in state): Up to $13,260, depending on major
  • Undergraduate tuition and fees (out of state): Up to $45,376, depending on major

Angelo State University

  • Undergraduate tuition and fees (in state): $9,010
  • Undergraduate tuition and fees (out of state): $21,280

Alvin Community College

  • Undergraduate tuition and fees (in district): Up to $2,354, depending on credit hours
  • Undergraduate tuition and fee (in state): Up to $4,046, depending on credit hours
  • Undergraduate tuition and fee (out of state): Up to $5,810, depending on credit hours

When trying to figure out how to pay for college, you can apply for Texas student grants and loans, as well as looking for scholarships offered by individual schools. In the end, there are many opportunities to find different sources of college funding. As a result, you can reduce the number of student loans you need from Texas, and save some money in the long run.

Rebecca Safier contributed to this report.

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