Frequently
Asked Questions—Adults
Want Extra Credit For College?
Choose Austin Bank Loans!
Generic Bank Loans provide extra benefits to help you make the most
of your student loan.
- Fast loan approval
- Expert customer service department located right here in Texas
- Online PLUS loan pre-approval
- Great repayment incentive programs:
AllStar:
- .5% interest rate reduction with AutoPay
- 1% principal balance credit after the 1st 12 consecutive and
on time payments
- 1% principal balance credit after the 2nd 12 consecutive and
on time payments
MVP (Most Valuable Payer) Program: .25% interest rate reduction
with AutoPay
Earn up to five free loan payment certificates by making your student
loan payments on time. The first MVP Certificate is earned after
making 36 consecutive and on time payments. From there, an additional
MVP Certificate is earned for every 12 consecutive and on time payments
made.
- Repayment options are available for you to choose
- Life of loan servicing from origination through repayment
Frequently Asked
Questions
How
do I apply for a student loan? Who will my lender be?
Will
my student loan help me establish credit?
After
I am approved for the loan, when do I receive the money?
Am
I eligible for a student loan?
What
schools may I attend with a federal or private student loan?
What
expenses do these student loans cover?
If
I receive a scholarship, grant, or other financial assistance,
am I still eligible for a student loan?
Do
I have to re-apply for a student loan each year?
When
must the loan be repaid?
How
long do I have to repay my loan?
How do I apply for a student loan?
Who will my lender be?
Applying for a loan is a simple process:
- You must complete a Free Application for Federal Student Aid
(FAFSA) that you can obtain from the school you plan to attend
or the Department of Education. Visit fafsa.ed.gov to
use the online version.
- Next, you should contact the financial aid office of the school
you plan to attend and request that they send you the school’s
financial aid information.
- After completing the FAFSA, and any additional requirements of
the school you plan to attend, mail these forms back according
to the specific instructions. The school’s financial aid
office will notify you of the aid and loans you may qualify for
with an award letter.
- When the loan has been awarded, you will be notified by the school.
In some cases the school will send you a Stafford loan application.
If you do receive these forms, you must use them. If you are not
mailed these forms, then contact an eligible student loan lender
to obtain the proper promissory note.
- On your promissory note that you return to your school, you will
be asked to indicate who your lender will be. Federal law specifies
several categories of lenders that are eligible to originate loans
under the Federal Family Education Program. They include a National
or State Chartered Bank, Savings and Loan Association, Credit Union,
Pension Fund, or an Insurance Company at most colleges and universities.
Return to top
Will my student loan help me establish
credit?
Yes. As with most loans, your student loan will be reported to
a national credit bureau and an excellent payment record will help
establish a good credit rating.
After I am
approved for the loan, when do I receive the money?
The school you are attending will specify the dates that the loan
proceeds should be disbursed. Most loans are funded in two installments
at the beginning of each semester and are usually disbursed directly
to the school according to their procedures. Your school can give
you more information about their policies.
There are three types of government-guaranteed student loans for
you to consider. Each loan type is designed to meet different needs.
- Subsidized Federal Stafford Loans
These loans allow the federal government to pay the interest on
the loan while the student is attending school, during grace
periods or deferments.
- Unsubsidized Federal Stafford Loans
With Unsubsidized Stafford Loans, the borrower is responsible for
paying all the interest that accrues during school, grace and
deferment periods. Unsubsidized Stafford Loans are available
to dependent and independent students who do not qualify for
Subsidized Stafford Loans, or whose Subsidized Stafford Loan
eligibility does not meet their financial need (up to the annual
limit).
Note: Financial eligibility is determined by the
school based upon
federal law, information provided by the applicant, an analysis of
the student’s needs, the estimated cost of the education, and
the
student’s eligibility for other financial aid.
- Grad PLUS Loans
The Federal PLUS Loan for graduate/professional students is specifically
designed to enable these students to increase their federal fiancial
aid with an affordable interest loan. The borrower is responsible
for paying all the interest that accrues.
Note: Financial eligibility is determined by the
school based upon an analysis of the student’s financial need
(the cost of education minus other financial aid), and the financial
capacity of the parent to repay the loan.
Return to top
Am I eligible for a student loan?
In most cases, eligibility requirements are easy to meet. We’ve
listed most of the general guidelines below. The school’s
financial aid officer will determine your financial need for a
Subsidized Stafford Student Loan based upon factors such as the
cost of attending school, family income, and the number of dependents
in the family. Unsubsidized Stafford Loans are also available to
students who do not qualify for Subsidized Stafford Loans or whose
Subsidized Stafford Loan eligibility does not meet the amount they
need (up to the annual loan limit).
• Stafford Loan Guidelines:
- The student must be a U.S. citizen, and in some cases non-citizens
are also eligible.
- The student must be enrolled, or accepted for enrollment, on
at least a half-time basis at an eligible school. This includes
study abroad programs approved by an eligible school in the United
States.
- The student must be enrolled in a degree or certificate program,
or a program required fo professional accreditation and demonstrate
satisfactory academic progress.
- The student must have applied for a Federal Pell Grant. The student
must be willing to certify his or her intent to use the loan proceeds
for educational purposes only.
- The student must not have defaulted on any other federally guaranteed
education loan, or owe any refund on a federal education grant
or scholarship.
- And last, male students must be registered with the U.S. Selective
Service (if required to register). In addition, students receiving
loans may not be incarcerated.
- Graduate Student PLUS Loan
Guidelines*:
- The borrower must be a U.S. citizen, and in some cases non-citizens
are also eligible.
- The student must be enrolled, or accepted for enrollment, on
at least a half-time basis at an eligible school. This includes
study abroad programs approved by an eligible school in the United
States.
- The student must be must be in good standing with the eligible
school and continue to make satisfactory academic progress at a
post-secondary school (which includes community or junior colleges,
colleges, or universities).
- The student must not have defaulted on any other federally guaranteed
education loan, or owe any refund on a federal education grant
or scholarship.
- The borrower must not have any adverse credit history.
- And, male students must be registered with the U.S. Selective
Service. In addition, student must not be incarcerated.
* Effective July 1, 2006
Return to top
What schools may I attend with
a federal or private student loan?
You can use your student loan to pay for education expenses at
most accredited institutions of higher education. Included are
most colleges and universities, community and junior colleges,
and vocational, trade or technical schools.
All of these education institutions limit enrollment to students
who are high school graduates or those with equivalency certification.
These schools are accredited by a national accrediting association
that is approved by the federal government.
What expenses do these student
loans cover?
Most expenses related to the cost of an education are allowable:
tuition, fees, books, supplies, room and board, and even transportation
to and from school.
If I receive a scholarship, grant,
or other financial assistance, am I still eligible for a student
loan?
Probably! However, the total amount of the student loan might
be affected based upon other aid you are receiving. After you complete
the FAFSA and return it as instructed, you will have a better idea
of the specific amounts available.
Return to top
Do I have to re-apply for a student
loan each year?
Yes, you will need to complete a FAFSA each year you borrow money,
and you may not be required to sign a new promissory note each
year. However, you are not required, in any way, to continue borrowing
each year. For Stafford Loan borrowers, as long as you remain enrolled
in school at least half-time, you do not need to begin repaying
your loan.
When must the loan be repaid?
Repayment of the loan begins six months after graduation, or six
months after the student becomes enrolled less than half-time.
PLUS loan repayment begins within 60 days of the final disbursement.
Certain repayment deferments are available if you qualify. While
most borrowers repay their loans as agreed, there are several penalties
for non-payment. Defaulting on a loan will be reported to the credit
bureau(s) and will prevent you from receiving additional financial
assistance.
Return to top
How long do I have to repay the
loan?
Loan repayment terms can be up to ten years, and a minimum monthly
payment of $50 is required. Loan consolidation and longer terms
are available under certain circumstances will probably prevent
you from receiving other types of loans for cars, credit cards,
and even a mortgage loan.
If you default on the loan, the Internal Revenue Service may hold
your tax refund and your employer can garnish your wages. It is
important to remember that most individuals with undergraduate
and/or graduate degrees earn substantially higher incomes than
do individuals without higher education degrees.
So, in addition to earning a degree, college graduates have the
opportunity to earn far more money during their lifetime –
which makes loan repayment easier to afford.
|
