About Student Loans


State Loans (Texas)

The state of Texas offers two student loan programs to assist students in paying for college expenses: the Texas B-On-Time Loan Program and the Texas College Access Loan Program. An overview of each program is provided below.

The Texas B-On-Time Loan Program

The Texas B-On-Time (BOT) Loan Program provides zero-interest loans to Texas undergraduate students attending 4-year colleges. Beginning with the 2015-2016 academic year, only renewal awards will be available. Since the program is designed to encourage Texas students to complete college in a timely manner while meeting high standards, the loan can be forgiven for students who meet certain requirements.

Specifically, for loan forgiveness, students must graduate with a 3.0 grade point average (on a 4.0 point scale) and must:

  • Finish within a specified length of time after they enter school (four calendar years for most bachelor's degree programs or five calendar years for programs that require a longer period of study), or
  • Finish with no more than six credit hours beyond what is required to complete their degree or certificate.*

Either way, this program is a good deal for Texas students. If a student qualifies for forgiveness, great — he or she won't have to pay back the BOT loan, and graduating within the specified time period may mean the chance to start working and earning a paycheck earlier. If a student doesn't qualify for forgiveness, he or she has still financed part of a college education with a zero-interest loan, and you literally can't get a better interest rate than that.

Note that the BOT program is not an entitlement program. It is dependent on funding from the Texas Legislature and may be funded at a level that does not meet the full demand for loans. Availability of funds at a particular school is based on whether the school is participating in the program and the amount of appropriations the school has received. Applicants for BOT loans are strongly encouraged to contact their school's financial aid office as early as possible.

For more information and to apply for a BOT loan, visit the Texas B-On-Time Loan Program page.

* Note: Beginning with the 2014-15 academic year, the eligibility requirements for the BOT loan have changed. However, qualifying students who received one or more BOT loans under the previous requirements may still be eligible for loan forgiveness. If you have already borrowed and have questions about whether you qualify for loan forgiveness, please contact your school's financial aid office.

The Texas College Access Loan Program

When a student applies for financial aid for college using the Free Application for Federal Student Aid, or FAFSA, the Department of Education estimates how much the student and his or her family can afford to spend on the student's upcoming year of education, also known as the expected family contribution, or EFC. The student's school then subtracts the EFC from the cost of attendance (COA). This difference between COA and EFC is the student's financial need.

The school tries to meet that need, depending on the student's eligibility, by awarding grants, scholarships, college work study, and/or federal student loans. For many students, the amount of aid awarded by the school is not enough to fill the gap between cost and aid. Moreover, sometimes the EFC is more than a family can pay out of pocket, which makes paying for college difficult.

The Texas College Access Loan (CAL) Program is designed to help with this situation. Families may use the CAL to make up part or all of the gap between cost and aid, or even to replace what they are expected to pay (the EFC). While families do not have to demonstrate financial need, be aware that either the student borrower or a loan cosigner needs to demonstrate a good credit record to be eligible for the loan.

Students who qualify for the CAL can enjoy benefits they might not receive from privately issued loans, such as a fixed interest rate of 5.25 percent, a six-month grace period after the borrower leaves school, no interest capitalization, and several repayment plan options.

For more information and to apply for a CAL Program loan, visit the Texas College Access Loan Program page.

Back to Top