What Are Student Loans?

what are student loans

A Student Loan is borrowed money that must be repaid. It can only be used for educational expenses.

Common Features of Student Loans
  • Most loans have interest and origination fees.
  • 6 month grace period
  • Average Length of Repayment is 10 years
  • Counseling is required
  • Academic requirements affect all Federal and State loans and most private loans
  • Students need to monitor myUNT and their To-Do list for award information
  • No loans can exceed the Cost of Attendance as determined by Student Financial Aid and Scholarships

What Are The Different Kinds of Student Loans?

What Are Federal Direct Subsidized Stafford Loans?

  • Lender is U.S. Department of Education
  • Need based as determined by Department of Education
  • Undergraduate Students only (as of July 1, 2012)
  • Interest rate 3.4% as of July 1. 2011
  • Origination Fee 1%
  • No interest accrued or payments due while enrolled at least half-time (6 credit hours)

What Are Federal Direct Unsubsidized Stafford Loans?

  • Lender is U.S. Department of Education
  • Interest rate 6.8% as of July 1. 2011
  • Origination Fee 1%
  • Interest begins accruing immediately after loan pays to school
  • No payments due while enrolled at least half-time.

What is the Federal Direct Parent PLUS Loan?

  • Lender is the U.S. Department of Education
  • The parent is the borrower
  • Subject to credit approval
  • Payback begins 60 days after loan is fully disbursed
  • Interest Rate is 7.9% as of July 1, 2011
  • Origination Fee is 4%

What is the Federal Direct Grad PLUS Loan?

  • Lender is the U.S. Department of Education
  • Graduate students only
  • The student is the borrower
  • Subject to credit approval
  • The student must request loan through SFAS
  • Payback begins 60 days after loan is fully disbursed
  • Interest is capitalized
  • Interest Rate is 7.9% as of July

    1, 2011

  • Origination Fee is 4%

What are State Student Loans?

State Loans are loans that are backed by the State for Texas Residents. There are two types of state loans available.

Texas B-On-Time Loan (BOT)
  • Lender is the State of Texas – Limited Funding
  • The student must apply for Federal Aid
  • UNT determines who is eligible
  • No interest loan for eligible Texas students
  • Student must be full-time
  • If the borrower meets certain requirements then the entire loan can be forgiven upon graduation
  • Lender is the State of Texas – Limited Funding
  • 3% origination fee
  • Student must meet certain requirements for eligibility each year
  • Not available in Summer
  • A student cannot receive B-On-Time loan and Texas Grant in the same year
College Access Loan (CAL)
  • Lender is the State of Texas – Limited Funding
  • Must be Texas resident
  • The student must apply for Federal Aid
  • 5% origination fee
  • 5.25% interest rate for 11/12 aid year
  • Must meet SAP (exception for over 186 hours)
  • Subject to credit approval
  • Student has to apply through www.hhloans.com
  • Subsidized & Unsubsidized loan eligibility must be considered
  • Lender is the State of Texas – Limited Funding
  • Average 10 day right to cancel

Go to www.hhloans.com for more details.

What are Private Student Loans?

Private Student Loans are loans that the student applies for directly through an outside lender such as a bank. The specific terms and conditions of the loan depend on the lender.

  • Student must apply through lender
  • SFAS does not recommend any lender
  • Subject to credit approval
  • Most require cosigners
  • Fixed and variable rates available
  • Average 10 day right to cancel
  • Student may have additional steps with lender once loan is certified and should keep in contact with them for any additional steps.

Source: unt.custhelp.com

Category: Credit

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