Loans
Borrowing money to pay for your education is an important decision. The cost of higher education is increasing, but remains an investment worth your time, effort, and money. Keeping in mind that any money you borrow will have to be repaid, a student loan is a long-term financial obligation.
Federally Guaranteed Student Loans
A subsidized Stafford loan is based on financial need. The federal government pays the interest for the student during the following periods:
- While the student is enrolled in school at least half time
- During the six-month grace period after the student drops below half-time enrollment
- During a period of deferment (a period when payments of principal are temporarily postponed)
An unsubsidized Stafford loan is not based on financial need. An unsubsidized Stafford loan is available to a student who does not qualify for a subsidized loan or to supplement a student's subsidized loan. The student is responsible for paying all of the interest on an unsubsidized loan. The fixed interest rate for an unsubsidized Stafford loan made to a graduate student for which the first disbursement is made on or after July 1, 2006, is 6.8%.
Federal law requires certain fees be charged for each Stafford loan made, including an origination fee and a federal default fee (previously called a guarantee fee). The law specifies the maximum amount for each fee and authorizes both fees to be deducted from the loan amount. Fees charged to the borrower are deducted from the loan proceeds when the money is sent to the student's school.
Federal PLUS loans are government-sponsored, low-interest loans designed to help graduate/professional students. The Federal PLUS Loan Program was created to supplement the loans students can borrow under the Federal Stafford Loan Program.
The Texas Guaranteed Student Loan Corporation www.tgslc.org provides a comprehensive list of lenders who participate in the Federal Student Loan Programs. They also provide the most current information regarding loan repayment.