Education: the most important investment you can make

FAQs

• Am I eligible for a student loan from United Texas?

  To be eligible, you must become a credit union member during the application process. You must also meet the following criteria:

  • US citizen or permanent resident
  • Enrolled at least half-time in an eligible school
  • Meet minimum credit requirements
• What are private student loans?

  Private student loans are credit-based loans for college that are used to pay for qualified educational expenses including tuition, room and board, books, and other school related expenses. A private student loan serves as a way for students to fill the funding gap between the cost of attending school and the amount of federal loans, grants, and scholarships available to them.

• What is the difference between federal and private student loans?

  Federal student loans are available through the US Department of Education and offer fixed interest rates. Private student loans are credit-based loans, feature fixed and variable interest rates, and are available through credit unions or banks.

• How do I know if I'm eligible for financial aid?

  Eligibility for federal, state and university funded financial aid is determined by completing the Free Application for Federal Student Aid (FAFSA). All students are strongly encouraged to apply for federal aid by completing the FAFSA, which can be obtained online at www.fafsa.ed.gov.

• Do I need to complete the FAFSA in order to qualify for private student loans?

  No. However, we encourage you to complete the FAFSA each year to ensure that you take full advantage of grants and other federal aid you may be eligible to receive. Private student loans are a way for you to fill the funding gap between the cost of attending school and the amount of federal loans, grants, and scholarships available to you.

• What is the importance of a cosigner?

  Applying with a creditworthy cosigner not only increases your chance of approval, but also may lead to a lower loan rate.

• What are some tips to keep in mind?

  When applying for a student loan, remember to:

  • Exhaust all federal loans before moving on to private loans
  • Get started on your application early
  • Only request the amount you need for the current academic period
• What is the difference between consolidation and refinancing?

  When you consolidate student loans, you’re combining multiple loans together into one single loan, with one payment. You’re still paying the same total amount and same total interest. You now just have one loan instead of multiple loans.

  When you refinance student loans you basically consolidate them into a single loan with a new interest rate, new terms, and monthly payment amount. The lender will evaluate you and your creditworthy cosigner’s (if applicable) financial information to offer you a new low and a lower rate.

• Can I refinance my federal and private student loans together?

  If you want to combine your Federal and private student loans together, you have to do it through a private lender. The Federal Direct Consolidation Loan program does not consolidate private loans into Federal loans. However, many lenders in our network do allow you to combine your private and federal loans into one payment.

• Does it matter if I graduated and where I attended school?

  You must have completed an associates, undergraduate, graduate or doctorate degree from a Title IV eligible school to be eligible for student loan refinancing.

• What is the difference between interest rate and APR?

  The interest rate is simply the percentage of the loan amount that is charged for borrowing money. The APR reflects not only the interest rate, but also any other fees charged by the lender. The APR represents the total cost of borrowing and for that reason is usually higher than the interest rate.

• What does the Student Loan Interest Freeze Mean?

  On Friday, March 13, President Donald Trump announced he would freeze student loan interest. This action is part of a package of emergency executive actions designed to mitigate the economic fallout as a result of the Corona virus outbreak. The unprecedented move will provide relief to the 42 million-plus Americans who owe over $1.5 trillion in federal student loans.

  Since this announcement, there has been much confusion about what this freeze actually means for student loan borrowers. To reduce  confusion, United Texas Credit Union has answered some common questions about the freeze.

  What does a student loan interest freeze mean?

  With the president’s student loan freeze in effect, no further interest will accrue on certain federal student loans until further notice. Borrowers will only be responsible for paying the principal payments due on the loan for as long as the freeze is in effect.

  Which loans are frozen?

  The interest freeze only applies to student loans that the U.S. Department of Education and its contracted student loan servicers hold. Loans issued by private borrowers are not subject to the freeze (unless indicated by the lender). In addition, some federally guaranteed student loans, including federal Perkins loans and FFEL program loans, may not be subject to the freeze if they are not held by a federal government agency.

  How long will the freeze be in effect?

  As part of the administration’s relief efforts during the Corona virus outbreak, the freeze is temporary. The administration will implement the freeze automatically and continue it until the policy changes. The administration has not announced an end date for the freeze end.

  Does the freeze include any student loan payment relief?

  The freeze does not include any student loan payment relief. College graduates who are paying off their student loans must continue to make their monthly payments as usual. The move only affects the interest on qualifying federal student loans going forward.

  How does the freeze affect borrowers who have already accrued a significant amount of outstanding interest?

  Payments made during the freeze will apply to loan principal only after borrowers pay all outstanding, non-capitalized interest.

  If the borrower has defaulted on their loan, the “forced collections” implemented in case of default will continue as usual. This includes the borrowers being subject to wage garnishment, offset of Social Security payments and automatic confiscation of federal and state tax refunds.

  Trump’s interest rate freeze will halt balance growth and reduce the cost of repayment for some borrowers; however, it will not provide direct student loan relief for borrowers who are struggling to meet their loan payments due to lost income because of the Corona virus outbreak.