Student Loans

Why should I take out federal student loans?

Federal student loans for a degree-seeking student are an investment in your future. You should not be afraid to take out federal student loans, but you should be smart about it.  Federal student loans offer many benefits compared to other options you may consider when paying for college:

  • The interest rate on federal student loans is almost always lower than that on private loans—and much lower than that on a credit card!
  • You don’t need a credit check or a cosigner to get most federal student loans.
  • You don’t have to begin repaying your federal student loans until after you leave college or drop below half-time.
  • If you demonstrate financial need and are enrolled in an undergraduate program, you can qualify to have the government pay your interest while you are in school.
  • Federal student loans offer flexible repayment plans and options to postpone your loan payments if you’re having trouble making payments.
  • If you work in certain jobs, you may be eligible to have a portion of your federal student loans forgiven if you meet certain conditions.
  • You must be enrolled at least half-time.

What should I consider when taking out federal student loans?

Before you take out a loan, it’s important to understand that a loan is a legal obligation that you will be responsible for repaying with interest. You may not have to begin repaying your federal student loans right away, but you don’t have to wait to understand your responsibilities as a borrower.

Be a responsible borrower.

  • Keep track of how much you’re borrowing. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need for your school-related expenses.
  • Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can use the U.S. Department of Labor’s Occupational Outlook Handbook to estimate salaries for different careers or research employment opportunities advertised in the area where you plan to live to get an idea of a local starting salary. You also can use the Department of Labor’s career search tool to research careers and view the average annual salary for each career.
  • Understand the terms of your loan and keep copies of your loan documents. When you sign your promissory note, you are agreeing to repay the loan according to the terms of the note even if you don’t complete your education, can’t get a job after you complete the program, or you didn’t like the education you received.
  • Make payments on time. You are required to make payments on time even if you don’t receive a bill, repayment notice, or a reminder. You must pay the full amount required by your repayment plan, as partial payments do not fulfill your obligation to repay your student loan on time.
  • Keep in touch with your loan servicer. Notify your loan servicer when you graduate; withdraw from school; drop below half-time status; transfer to another school; or change your name, address, or Social Security number. You also should contact your servicer if you’re having trouble making your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing.

 

Click here to learn about the rights and responsibilities of a federal student loan borrower?

 


What types of federal student loans are available?


Direct Subsidized Loans

These are for undergraduate students with financial need.  Your Free Application for Federal Student Aid (FAFSA) will be reviewed to determine the amount you can borrow. You are not charged interest while you’re in school at least half-time and during grace periods and deferment periods.  The amounts you can receive are also based on your level in school.  Please see www.studentloans.gov to view the annual and aggregate loan limits for undergraduates, graduates, and professional students.

*If you are a first-time borrower on or after July 1, 2013, there is a maximum period of time (measured in academic years) that you can receive Subsidized Loans. If the Subsidized Usage Limit Applies (SULA) to you, click here for more information regarding the loss of subsidy on your loans.

Direct Unsubsidized Loans

You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan.  Like subsidized loans, your FAFSA will be reviewed to determine the amount you are eligible to receive.  Interest accrues (accumulates) on an unsubsidized loan from the time it’s first disbursed. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.  The amounts you can receive are also based on your level in school.  Please see www.studentloans.gov to view the annual and aggregate loan limits for undergraduates, graduates, and professional students.

Proration of Loans – We must prorate a Stafford Direct Loan for an undergraduate program if the academic program is shorter than an academic year or the student’s remaining period of study is shorter than an academic year.  Proration is required only when it is known in advance that a student will be enrolled for a final period of study that is shorter than an academic year.  Stafford Loan limits are not prorated for students enrolled in graduate or professional level programs.
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PLUS Loans

PLUS loans are federal loans that graduate or professional degree students and parents of dependent undergraduate students can use to help pay education expenses. The U.S. Department of Education makes Direct PLUS Loans to eligible borrowers through schools participating in the Direct Loan Program.

 Here’s a quick overview of Direct PLUS Loans:

·    The U.S. Department of Education is the lender.

·    The borrower must not have an adverse credit history.

·    Loans have a fixed interest rate of 6.31%.

·    The maximum loan amount is the student’s cost of attendance (determined by the school) minus any other financial aid received.

Interested borrowers should apply here

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Federal Perkins Loan

A Federal Perkins Loan is a low-interest (5 percent) loan for undergraduate students with exceptional financial need. Your school is your lender and the loan is made with government funds. You must complete entrance counseling at www.studentloans.gov and sign the Perkins MPN in the Financial Aid Office before any funds can be disbursed to you. You must repay this loan to your school.

The Department of Education has announced that the “Wind-down” of the Federal Perkins Loan Program goes into effect in 2015-2016. UTHSCSA will have limited awarding discretion for this program and must adhere to the additional regulations listed below.  Please note that as of September 30, 2016 graduate students are no longer eligible to participate.

UTHSCSA may make a new Perkins Loan to an undergraduate student after September 30, 2016, if all of the following conditions are met:

  1. The student is a new undergraduate admit
  2. Does not have a prior Perkins Loan made by the School (also called – prior outstanding balance)
  3. And the Perkins Loan can be made to an otherwise eligible student, to meet all or some of the student’s unmet need, only after the student has been awarded all Direct Subsidized Loan and Unsubsidized Loan aid for which the student is eligible.  Prior loan recipients at UTHSCSA may receive a new Perkins loan if they have remaining financial need after deducting eligibility for scholarships, grants, and a subsidized loan (even if the loan is not accepted).

Funds will continue to be awarded on a first-come first-serve basis and upon availability of funding.

UTHSCSA Perkins Loans are serviced by Heartland ECSI, please visit their website at http://www.heartlandecsi.com/ website for account information.  Their contact information is as follows:

UTHSCSA School Code for Heartland ECSI: W95
ECSI Mailing Address:

University of Texas Health Science Center – San Antonio c/o ECSI
100 Global View Drive
Warrendale, PA 15086

Customer Contact Number 1 888-549-3274
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Alternative Loans

Alternative Loan borrowing should be used for circumstances where you have exhausted all other options in regards to financing your education. These loans typically have high interest rates and may have fees associated with them.

UTHSCSA requires students to apply for financial aid using the Free Application for Federal Student Aid (FAFSA) prior to seeking an Alternative loan option.  We will not be able to certify a loan for you until we have received your FAFSA and any documents required in order for your account to be ready for packaging.  We will offer the loan, for an amount that cannot exceed your Cost of Attendance less other aid received for the aid year, which must be accepted by the student via their student portal.   Loans will be disbursed in at least two disbursements or based on the number of terms enrolled – which ever is greater.

Click Here to Compare Federal and Private Student Loans

College Access Loan Program

The College Access Loan Program provides alternative education loans to Texas students who are unable to meet the cost of attendance. The CAL may be used to cover part or all of the student’s Expected Family Contribution (EFC); students do not have to demonstrate financial need . However, the amount of federal aid for which you are eligible must be deducted from the cost of attendance in determining the CAL loan amount.  You can find information about this loan program or apply for the loan at www.hhloans.com or continue reading below.

This loan program is part of the Hinson-Hazlewood College Student Loan Program administered by the Texas Higher Education Coordinating Board (THECB). You can track your application progress using their College Access Loan Application Guide.

ELIGIBILITY REQUIREMENTS

o  Be a Texas resident

o  Be enrolled at least half-time in a course of study leading to an associate, bachelor, graduate or higher degree or be enrolled in an approved Alternative Educator Certification Program

o  Meet the satisfactory academic progress requirements set by the institution

o  Provide a cosigner who has good credit standing and meets other requirements

ANNUAL LOAN AMOUNTS

o  Students may borrow an amount up to the cost of attendance less other financial aid.

COSIGNER ELIGIBILITY REQUIREMENTS

o  Must be at least 21 years of age

o  Must have a regular source of income

o  May not be the borrower or the spouse of the borrower

o  Must receive a favorable credit evaluation

o  Must be a U.S. citizen and reside in the U.S. or in a U.S. territory

Favorable Credit Evaluation Requirements

Students or cosigners must:

·    Have an Experian VantageScore of 650 or higher;

·    Not have public records such as tax liens or bankruptcy proceedings;

·    Have a minimum of 5 credit trade lines, excluding student loans or authorized user accounts.

·    Not have defaulted on any federal or private education loans.

In line with financial industry practice, THECB reports account obligations to the credit reporting agency(ies). The reporting is at the loan level, with each loan reported as a tradeline. Cosigners are equally responsible for the repayment of the loan if the student fails to meet his/her repayment obligation.

Interest Rate

·    Effective April 25, 2017, the interest rate for new loans is 6.60%.

·    Interest is not capitalized.

Repayment

·    Loans have a six-month grace period from the date a borrower ceases to be continuously enrolled as at least a half-time student at an eligible institution;

·    Principal balances under $30,000 have up to a ten-year repayment period with minimum monthly payments of $50;

·    Principal balances of $30,000 or more have a repayment period up to 20 years;

·    The loan will not be sold to another lender;

·    Postponements of loan repayment and income-sensitive or graduated repayment schedules are available.

*For most up to date loan information, refer to www.hhloans.com**

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B On Time Loan Program

The Texas Legislature created the B-On-Time Student Loan Program.  This program provides non-interest bearing loans with a provision for loan forgiveness if the student meets defined criteria.  In order to receive funds through UTHSCSA, students must have received an initial award at their previous institution and be enrolled full-time in an undergraduate program. There are no additional forms to fill out to become eligible for a B-On-Time Student Loan. Each eligible student will need to complete a counseling session here and submit the certificate of completion to our office.  A counselor will review the student’s eligibility, offer an award, and then the student will need to submit an application at www.hhloans.com.

For a complete program description and requirements, click here.

HOW DO I REPAY MY B-ON-TIME LOAN?

If you do not qualify for loan forgiveness, you will have a six-month grace period, when no payments will be due on your loan, after your enrollment ends in your degree program. At the end of this grace period, your loan will enter repayment, and you will be required to make regular monthly payments to the Texas Higher Education Coordinating Board (THECB).

WHAT DO I NEED TO DO TO QUALIFY FOR FORGIVENESS OF MY BOT LOAN?

To qualify for forgiveness, you must have received an undergraduate degree from an eligible institution, having earned a B average, or the equivalent of a cumulative GPA of at least 3.0 on a 4.0 scale.

You must also have received:

·    A bachelor’s degree within four calendar years of the date you initially enrolled in an eligible institution;

·     A bachelor’s degree within five calendar years of the date you initially enrolled if the institution reports that you graduated with a degree in architecture, engineering, or any other program that requires more than four years to   complete; or

·     No more than six hours more than the number of credit hours required to complete a bachelor’s degree.

IS THERE A FORM I NEED TO SUBMIT IN ORDER TO HAVE MY LOAN FORGIVEN?

Yes. In order to have your BOT loans forgiven, you must submit the B-On-Time Loan Forgiveness Eligibility Confirmation Form to THECB.  The UTHSCSA Registrar’s Office will need to confirm that you qualify for forgiveness. Although there is no deadline to submit the form, THECB recommends that both the forgiveness form and verification from your school be submitted no later than 90 days after the completion of your program. If THECB does not receive your loan forgiveness form, your loan account will be scheduled for repayment beginning six months after you are no longer continuously enrolled in a degree program.

To find the B-On-Time Loan Forgiveness Eligibility Confirmation Form, go to www.hhloans.com, click on “Forms,” and then click on “BOT.”

IF I QUALIFY FOR LOAN FORGIVENESS FOR MY BOT LOAN, WILL I HAVE TO PAY INCOME TAX ON THE AMOUNT FORGIVEN?

Yes. IRS regulations require that forgiven loans be reported as taxable income. THECB will mail you IRS Form 1099-C, Cancellation of Debt at the end of the following January. Use the form in preparing your income tax return.

IF I HAVE TROUBLE REPAYING MY BOT LOAN, WHAT SHOULD I DO?

If you have difficulty making the required monthly payments on your BOT loan, contact the THECB. You have several options should you experience financial
hardship, including:

·    Education deferment

·     If you are enrolled in school after completing your degree, you may claim an education deferment to postpone payments on your BOT loan. You are eligible for a deferment of payments as long as your account is not in default and you provide enrollment documentation of at least a half-time course load directly to THECB.

·     Forbearance

·     If you are experiencing significant financial hardship, you may be granted periods of forbearance in the form of postponed or temporarily reduced payments if THECB receives a written request stating the circumstances that merit  such consideration.

·    Deceased or disabled borrowers

·    Should a borrower die or become permanently or totally disabled, BOT loans will be discharged.

IF I FAIL TO MAKE BOT LOAN PAYMENTS ON TIME, WHAT WILL HAPPEN?

If a payment is not received within 20 days of the scheduled due date on your BOT loan, a late fee will be assessed on your account. If your account is 90 days or more past due, THECB is required to notify the Comptroller of Public Accounts. At this point, the state may impose a wage warrant to collect a portion of your wages in payment on your BOT loan without notifying you. If you miss five consecutive monthly payments, the full remaining principal balance on the loan comes due, and you are required to pay that and all other assessed charges and late fees.

*Note: You should contact THECB to determine if they will accept a one-month payment with late fees to avoid further penalties. If you miss six consecutive payments (making your loan a total of 180 days or more past due), the loan will be in default. Upon establishing loan default, the Office of the Attorney General, at the request of the Commissioner of Higher Education, may file suit for the unpaid balance plus court costs, attorney fees, and judgment interest.

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Minnie Stevens Piper Fondation (MSPF) Loan Program

The MSPF provides alternative education loans to Texas students who are unable to meet the cost of attendance. The loan may be used to cover part or all of the student’s Expected Family Contribution (EFC); students do not have to demonstrate financial need however, the amount of federal aid for which you are eligible must be evaluated first before this loan can be offered.  You can find information about this loan program or apply for the loan here (a brief summary of the loan program requirements is shown below for  your convenience):

 ELIGIBILITY REQUIREMENTS

o  Be a Texas resident

o  US Citizen or Permanent Resident of the US

o  Be enrolled full-time in a course of study leading to an associate, bachelor, graduate or higher degree

o  Meet the satisfactory academic progress requirements set by the institution

o  Provide a letter of recommendation from your department

ANNUAL/AGGREGATE LOAN AMOUNTS

o  Undergraduate students may borrow up to $1,000 for the fall or spring semester (a separate application will be required for each loan).

o  Graduate students may borrow up to $2,000 for the fall or spring semester (a separate loan application will be required for each loan).

o  A maximum total of $10,000.00 may be loaned to any one student.

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NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM

Primary care medical, dental and mental/behavioral health clinicians can get up to $50,000 to repay their health profession student loans in exchange for a two-year commitment to work at an approved NHSC site in a high-need, underserved area.  The payment is free from Federal income tax and is made at the beginning of service so you can more quickly pay down your loans.  Approved sites are located across the U.S., in both urban and rural areas. For more details click here.