The Texas College Access Loan (CAL) Program is designed to help with this situation. Families may use CAL to make up part or all of the gap between their cost and other available aid. Families don’t have to demonstrate financial need to take advantage of CAL, but the student borrower or a loan co-signer does need to demonstrate a good credit record to be eligible for a loan.
Students who qualify for CAL can enjoy benefits they might not receive from privately issued loans, such as a fixed interest rate of 6.6 percent, a six-month grace period after the borrower leaves school, no interest capitalization, and several repayment plan options.
Visit the program’s website for information on student eligibility, loan fees and interest rates, repayment information, and a link to a loan application page.
If you have more questions about student loans, private or otherwise, talk to your school’s financial aid office
When federal, state, and institutional financial aid programs don’t cover your college costs, you might consider private loans. To help you make an informed decision about taking out a private student loan, you must complete and file a Private Education Loan Applicant Self-Certification Form with your lender before you receive a private student loan. This form will tell you that:
- Free or lower-cost federal, state, or school aid may be available in place of, or in addition to, a more costly private loan.
- Receipt of a private education loan may reduce your eligibility for free or low-cost federal, state, or school aid.
- To apply for federal grants, loans, and work-study, you must submit a Free Application for Federal Student Aid (FAFSA).
Private loans differ from federal loans in a variety of ways. First, the US Department of Education makes federal student loans; you’ll have to find a lender who makes private loans. Your school es of lenders who make private loans to their students.
A private lender will check your credit before it determines whether to approve your loan. If you have adverse credit, or lack published here sufficient credit history, your application may be denied or you may be asked to provide a co-signer (also known as an endorser) with a good credit history. By contrast, many federal loans do not have a credit requirement.
Other important differences include loan fees and interest rates, which generally are higher for private loans. Also, repayment terms usually aren’t as flexible as they are for federal loans. Deferment options are more limited, and few if any lenders offer options to discharge (forgive) a private loan under certain circumstances.
How do I compare private loans?
- Interest rates: What is the interest rate on the loan? How often does it vary and how is it calculated? How would obtaining a creditworthy endorser or co-signer affect the interest rate? When does interest begin accruing? If you cannot afford to make payments while attending school, will the lender postpone payments and allow the interest to be capitalized (added to the principal)? If so, how often will capitalization occur?
- Loan fees: What are the loan fees? How are they collected – are they charged on top of the requested loan amount or subtracted from the total loan amount to be disbursed? Will you be charged a fee when you enter repayment? Are there fees associated with prepaying the loan?
- Repayment terms and period: When will you begin repayment on the loan? Can repayment be postponed until after you graduate or leave school? What are your repayment options and what are their advantages and disadvantages? How long will you have to repay the loan? If you use the maximum or minimum repayment period, what amount of interest will you pay over the life of the loan? What’s the charge for a late payment?