State Loan Programs. State Loan Programs. Reaching Out to Previous Recipients. College Access Loan (CAL) B-On-Time Loan (BOT) 7/21/2014

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1 State Loan Programs Private Institutions Workshop July 21, 2014 State Loan Programs Reaching Out to Previous Recipients College Access Loan (CAL) (BOT) 1

2 State Loan Programs State Loan Programs Annual Mass Mass s were sent to previous recipients of the BOT, CAL and TASSP programs in June The encouraged students to contact their financial aid office to request BOT, CAL and TASSP funds. College Access Loan - CAL Eligibility Requirements Program Highlights New Credit Guidelines Origination Fee Changes 2

3 - BOT Program Highlights Eligibility Requirements FY15 Annual Loan Amounts Legislative Updates Forgiveness College Access Loan Students do not have to demonstrate financial need. CAL may be used to cover all or part of a student's EFC. However, the amount of federal aid for which a student is eligible must be deducted from the cost of attendance in determining the CAL loan amount Students must: Be a Texas resident; and Be enrolled at least half-time in: a course of study leading to an associate's, bachelor s, graduate, or higher degree: Meet the SAP requirements set by the institution; Receive a favorable credit evaluation or provide a cosigner who receives a favorable credit evaluation, and meets other requirements 3

4 College Access Loan Interest Rate A fixed annual rate of 5.25% Cosigners must: Be at least 21 years of age; Have a regular source of income; Not be the borrower or the spouse of the borrower; Receive a favorable credit evaluation; Be a U.S. citizen, or a permanent U.S. resident and reside in the U.S. or in a U.S. territory Repayment 6-month grace period before entering repayment; Principal balances under $30,000 have 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 College Access Loan Previous Credit Score Requirements VantageScore 700 New Credit Score Requirements VantageScore 591 Previous Origination Fee Structure New Origination Fee Structure Borrower or Cosigner with VantageScore Borrower or Cosigner Approved 5% Borrower and Cosigner Approved 3% Score Tier Orig. Fee Rate 711 A 0% fee B 3% fee C 5% fee 590 N/A Denied 4

5 Program Highlights No-interest loan to eligible Texas students If specified goals are met the entire loan amount can be forgiven upon graduation 6 month grace period before repayment begins 15-year repayment period, or a minimum monthly payment of $75.00 Applicants must: Completed a FAFSA and be eligible for federal financial aid, and Be enrolled full time in an undergraduate degree program, and Be a Texas resident or be entitled to pay resident tuition rates as a dependent child of a member of the U.S. armed forces, and Graduated in or after the academic year from high school in Texas under the recommended high school program, or its equivalent, or Earned an associate's degree from an eligible institution no earlier than May 1,

6 Renewal Eligibility: To maintain eligibility for future disbursements, the student must: As of the end of the 1st Academic Year - meet SAP requirements As of the end of the 2nd and Subsequent Academic Years - complete at least 75% of the semester credit hours attempted in the most recent academic year and have a cumulative GPA of at least a 2.5 on a 4.0 scale on all course work previously attempted A student may not receive B-On-Time loans for more than 150 hours Eligibility Exceptions Hardship illness, care for a sick person, fewer than 9 hours required to graduate Pro-rated awards for Hardship only Hours Taken Maximum Award Amount 12 or more hours Up to 100% of the maximum award amount 9-11 hours Up to 75% of the maximum award amount 6-8 hours Up to 50% of the maximum award amount Fewer than 6 hours N/A 6

7 FY 15 Annual Loan Amounts 4-year Public, Private and Health-related: $4,000/semester ($8,000/year) 2-year Public Community colleges & Public technical colleges: $1,350/semester ($2,700/year) Renewals only Funds available on demand 3% origination fee will be deducted from the loan proceeds What happened at the Capital? Statutory changes during the 2013 Legislative session: Negotiated Rule Making Allocation of Funds Sweeping and Reallocation of Funds Required Loan Repayment and Default Prevention Counseling 7

8 Allocation of Funds Private and Independent Institutions Based on authorized funding Calculated based on the 3 year average share of Texas residents enrolled full time in an undergraduate degree program who completed a FASFA Example: If a total of $20M is appropriated If the 3 year average full time enrollment is 50,000 If an institution s 3 year average full time enrollment is 5,000 Then the calculated allocation would be $200,000 (5,000 of 50,000 = 10% share) Sweeping of Funds Beginning in 2015, institutions will have until February 20th, or the first working day thereafter, to encumber funds On that date, institutions lose claim to any unspent funds not yet disbursed to students 8

9 Reallocation of Funds Funds released are available to the Board for reallocation to other institutions If necessary for ensuring the full use of funds, subsequent reallocations may be scheduled until all funds are disbursed Forgiveness Requirements School Authorized Officials BOT Confirmation Eligibility Form Official Transcripts Loan Repayment and Default Prevention Counseling 9

10 Forgiveness Requirements The student must receive an undergraduate degree or certificate and: Graduate with a cumulative GPA of at least 3.0 on a 4.0 scale, within: 4 calendar years after the date the student initially enrolled in an institution of higher education, 5 calendar years after the date the student initially enrolled in an institution of higher education, if the degree is in architecture or engineering, or 2 calendar years after the date the student initially enrolled in a public or private 2-year institution; OR Forgiveness Requirements (cont) Graduate with a cumulative GPA of at least 3.0 on a 4.0 scale, with a total number of credit hours earned that is no more than 6 hours beyond what is required to complete the degree or certificate. Hours earned exclusively by examination, developmental or dual credit hours are excluded. 10

11 School Authorized Officials Every August each school must provide a list of school officials who are authorized to complete and certify the BOT Forgiveness Eligibility Confirmation form. Any confirmation forms received with an official name not on the list will be rejected. Authorized Officials list should be updated immediately if staffing changes occur. Forgiveness Eligibility Confirmation form 11

12 Forgiveness Eligibility Confirmation form Forgiveness Eligibility Confirmation form 12

13 Official Transcripts High school All College and/or University transcripts Required Loan Repayment and Default Prevention Counseling Default 3 year cohort loan default rate > the statewide average, will be required to provide counseling Forgiveness 3 year cohort forgiveness rate < 50 percent of the statewide average, will be required to provide counseling THECB is collaborating with TG on materials that can be used by schools 13

14 State Loan Programs QUESTIONS?? Contact Information Janie Miramontes, Director of Client Services (512) Michelle Williams, Program Manager Michelle. (512) Albert Contreras, Program Manager (512)