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The rising cost of higher education is a concern to many people who are either seeking a college degree or who have children who will be entering college. Many citizens feel as though they simply can't afford college tuition or are apprehensive about the financial commitment of a student loan. There are a number of grants available, but state programs such as the TEXAS Grant are limited in funding and can not serve every student who qualifies.
During last year's regular legislative session, Senate Bill 4 created a new loan program which not only encourages students to graduate quickly and achieve good grades, but allows the loan to be forgiven if certain conditions are met. The program is called the Texas B-On-Time Loan Program. The program provides no-interest loans to qualified students who attend Texas' public and private four-year institutions, two-year institutions and public technical colleges.
To be eligible for the Texas B-On-Time loan, a person must be a Texas resident, must have graduated from high school not earlier than the 2002-2003 academic year under the recommended high school program or have received an associate's degree from an eligible institution no earlier than May 1, 2005, must not have received a bachelor's degree, must enroll full time in an undergraduate degree or certificate program, must have completed a Free Application for Federal Student Aid and must be eligible to receive federal financial aid.
Loan amounts vary depending on the institution being attended, ranging from $1,270 per year for two-year junior colleges to $3,140 per year for four-year institutions. Students must maintain a grade point average of 2.5 on a 4.0 point scale to continue being eligible for the loan each year. Additionally, a student may not receive a B-On-Time loan for more than 150 credit hours.
One of the most important features of the B-On-Time loan is the potential for the loan to be forgiven. The loan shall be forgiven if the student graduates with a cumulative grade point average of 3.0 and does so within four years at a four-year institution or two years at a two-year institution. However, if the student's degree is in engineering or architecture, the time limit is extended to five years. One consideration to remember is that if the loan is forgiven, IRS regulations indicate that the loan must be reported as taxable income.
Due to the shortfall in state funds during the legislative session, no general revenue was appropriated for the program. However, through the refinancing of some bonds by the Texas Higher Education Coordinating Board, about $22 million was freed up for the program for the 2004 fiscal year and about $25 million for the 2005 fiscal year. With limited funding, priority will be given to students based on financial need.
If you would like more information on the B-On-Time loan program or other types of financial aid available to college students, you can visit www.collegefortexans.com or visit with the financial aid office at a Texas college or university.
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