Interest Free College Loans for Texas Students

There are some fine colleges and universities in Texas with excellent reputations. Texas residents who enrol in their state colleges have the opportunity to reduce their total student debt burden by applying for interest free loans which are made available through two charitable foundations.

The opportunity to graduate and repay loans without interest charges and fees is an excellent initiative which can save thousands of dollars in interest payments. The two charitable foundations which award interest free student loans in Texas each have their own criteria, but both foundations limit awards to the top 10% of students academically.

The Abe and Annie Seibel Foundation is a private charity which offers 1050 interest free loans each year. Those who qualify need to apply early and applications are accepted from 1/1 to 28/2. Applicants must be U.S. citizens who have graduated from Texas high schools and who enrol in a Texas accredited college or university.

Academic requirements are that students must be in the top 10% of their high school graduating class, or have minimum scores of 1500 SAT or 22 ACT score. Students must retain a GPA of 2.75, but to have the loan renewed for the following year a minimum 3.0 GPA must be maintained.

The interest free loan is for $4000 and repayments begin whilst the student is in college. The loan must be repaid in full within 6 years, and the minimum monthly repayment whilst the student is in college is $35. This rises to a minimum of $50 per month after graduation. The median payment thus equates to $55.55 per month over 6 years, but it would be prudent to repay as much of the first loan as possible to reduce the monthly payment amount whilst in college when additional loans are issued in subsequent years.

The Evalee. C. Shwarz Charitable Trust for Education also offers interest free loans to students that enrol in an instate school, thus Texas residents who apply for Texas colleges can apply. Students who apply must show both significant financial need and high academic achievements.

Students are required to have scores in the top 10% nationally. Financial need is calculated on the basis of the student submitting the FAFSA and qualifying for a federal grant. Additionally the estimated parental contribution needs to be $4,600 or less as shown on the FAFSA student aid report.

As well as completing and providing the requested information, the application students are additionally required to provide a personal essay and 3 letters of recommendation from educational references.

Students who qualify on all counts and are not studying towards a law degree may apply. Loan awards vary from $5,000 to $15,000 per annum, with a total cap of $50,000. Students are not obliged to begin repaying the loans whilst in school but begin 12 months after graduation, repaying over 10 years.

There is a sliding scale for repayments which begins at 1% of the loan amount in the first year, rising by increments of 2% each year until the payments reach 19% in year ten, by which time the capital outstanding will be significantly reduced.

Those who are scored within the top 10% academically should make application directly to the foundations to be considered for these interest free loans. They represent a great way to reduce overall student loan debt, as well as an extra incentive to work towards the highest scores.

Source: Abe and Annie Seibel Foundation

             The Evalee. C. Shwarz Charitable Trust for Education.