Money Matters: Being on time can save students thousands
"Get in, get done and get out," Paul Blake with Texas Tech's Financial Aid Office said about one loan program students may not know much about. With this specific loan, being prompt has its perks. It's called the Texas B-On-Time Loan Program. "The average attendance for a student is four-and-a-half to five years for a college degree. If they can prompt the student to finish in four years, they're actually saving the student money because costs are always going to go up," Blake said. Blake said this loan option acrews zero-percent interest. "It's an awesome loan. Students can get more on this than they can get on any federal loan. As an entering freshman the maximum they can get is 5,500 dollars," Blake said. A portion of federal loans acrews interest from the first day a student borrows. The B-On-Time option is different. "This loan they can borrow 7,700 dollars, interest free, from day one, through the life of the loan," Blake said. Here's the best part: if a student meets one of two criteria, the loan is completely forgiven. "One of them is to graduate with a three-point-zero in four years. The other one is to graduate in four years with a three-point-zero within six hours of what's required for your major," Blake said. Borrowers beware, forgiven "B-On-Time" loans must be reported to the IRS. "The loan does though in that year become a tax liability for the student. So, if they borrowed 30,000 dollars it would be a 30,000 dollar income to the student they would then have to pay taxes on it but not have to pay the whole 30,000 back," Blake said. In addition, students must meet certain requirements to be eligible for the loan in the first place."All other loan programs the student can be less than half time, but this loan does have a full-time enrollment requirement," Blake said. So the big question is, hat if a student doesn't finish their degree in four years? "If they take longer than that, they automatically don't qualify for the cancellation. They would then just repay the loan as a regular loan, with no interest, just pay the principal," Blake said. The Texas B-On-Time Loan has been offered for about 10 years. Many are unaware it's an option because federal regulations prohibit colleges from promoting loans that fall under the "private alternative" category. The information is out there. Find it at this website.