Texas students have a number of unique options in regards to student loans. The Texas state government has made education a high priority. Not only do state laws and programs make sure that students can afford a college education, they also help students afford their loan payments after graduation.
The Texas Student Loan Program:
Chapter 52 of the Texas Education Code contains regulations regarding student loans given under the Texas Student Loan Program. Chapter 52 explains important topics, including:
? Student Loan Qualification: The Texas Opportunity Plan Fund provides loans to students that do not qualify for federal aid, but don’t have enough money to pay for college. To qualify, students must be Texas resident, enrolled in college, provide two references, and prove financial hardship.
? Loan Repayment: Students must begin making monthly loan payments no longer than nine months after graduation. However, the repayment period may be lengthened for students seeking graduate or medical degrees. Payment may also be deferred for students experiencing financial hardships. Interest is also deferred until a student is no longer enrolled in school.
? Loan Amount: Students are allowed to borrow the amount needed to cover their “reasonable expenses”, as set by their school. Loan amounts are determined by deducting a student’s financial aid, scholarships, grants, and income from their “reasonable expenses.”
The Texas Guaranteed Student Loan Corporation
As defined by the Texas Education Code in Chapter 57, The Texas Guaranteed Student Loan Corporation is a non-profit organization established to help students qualify for student loans. The Texas Guaranteed Student Loan Corporation guarantees that students will receive the loans they need to go to college. If a student needs help applying for loans, this organization will help a student through the application process.
Texas Loan Repayment Assistance Programs:
The TEA, TAJC, and the U.S. Department of Education have made a special effort to help Texans manage their student loan debt. According to the National Center for Education Statistics, the average college graduate owed approximately $23,000 in 2008. Students that went on to obtain their master’s or doctorate owed significantly more.
To help students get out of debt, the Texas state government offers various loan assistance programs. These programs include:
? The Student Loan Repayment Assistance Program for Lawyers: The Texas Access to Justice Commission, or TAJC, and the Texas State Bar have designed a loan forgiveness program for law school graduates. Graduates that provide legal assistance to a TAJC funded organization, a Texas non-profit organization, or a company funded by the Legal Services Corporation, may be forgiven of up to $4,800 a year.
? The Student Loan Repayment Assistance Program for Teachers: The Texas Education Agency also offers student loan forgiveness. Teachers that work in certain communities, teaching specific subjects, may be forgiven up to $5,000 for a maximum of five years in the program.
? Income-Based Repayment: While this program is not only limited to Texans, it is an important program for students and graduates to be aware of. The IBR program will reduce the size of a graduate’s loan payments, depending on their income and number of dependents. Students that are in need of assistance through the program may have their payments reduced to 10% or less of their income. Plus, after 25 years of payments, the rest of a graduate’s loans will be forgiven.
Many students take out student loans without ever thinking about paying them back. To be an informed borrower, Texas students need to become familiar with local student loan programs, as well as the assistance programs that may be available to them upon graduation.