Frequently Asked Questions—High School Students
Want Extra Credit For College?
Choose Austin Bank Loans!
Austin 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?
What
if I need more money than I can borrow under the government
guarantee products?
What
if I need short term health insurance when I go back to
school?
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 Internet 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. If
you want to find out what your credit score is check out MyCreditEDGE.com.
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. Subsidized loans are based on financial
need.
- 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 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).
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.
- Parent PLUS Loans
With this PLUS loan, the parent 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.
- Grad PLUS Loans
With this PLUS loan, the student 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 student 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 for
professional accreditation and demonstrate satisfactory
academic progress.
- The student must have filled out the Free Application
for Federal Student Aid (FAFSA).
- 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.
- Parent PLUS
Loan Guidelines:
- The student and parent must be U.S. citizens, 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 and parent must not have defaulted on
any other federally guaranteed education loan, or owe
any refund on a federal education grant or scholarship.
- The parent must not have any adverse credit history.
- And, male students must be registered with the U.S.
Selective Service. In addition, student or parent must
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.
Return to top
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, but 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—then your monthly payments won't be larger
than you can handle. But you will end up paying more interest.
Be sure to think ahead, however. Because if you pile up too
much debt, it 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.
Return to top
What
if I need more money than I can borrow under the government guarantee
products?
You may be eligible for a private loan
product. Our EDGEucational
Loans products may be right for you.
What
if I need short term health insurance when I go back to school?
LoanSTAR/Nelnet has made a special arrangement
with a short term health care provider to offer low cost health
insurance and a presciption drug discount card. Check out InsurEDGE.
Return to top
|
