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Shortfall means no interest-free loan program for new students

Just weeks before starting a new academic year, thousands of
college students throughout Texas are being told they won’t get the
interest-free, forgivable loan they were counting on to pay tuition.

The Texas Higher Education Coordinating Board notified
college financial aid offices this month that there isn’t enough money in the
Texas “B On Time” loan program to cover all the students who qualify.

The program awards students interest-free loans that are
totally forgiven if they graduate on time with at least a B average. But with
$8 million less in the program than last year, state officials told college
financial aid offices that there is no loan money available for new students.

About 650 students who obtained the loan last year also
won’t be able to renew, though which returning students will lose out hasn’t
been determined.

“If you’re not going to do the program, then at least
give notice far enough in advance so that you’re not counting on that
money,” said DeSoto parent Emily Barmer, whose son, Brad, won’t be getting
the loan.

Last year, Texas
spent $49 million on “B On Time” loans, enough for 12,800 students.
But there’s only an estimated $41 million available for the loans this academic
year, enough for 9,900 students.

Texas’s two
largest campuses, the University of Texas
at Austin and Texas
A&M University,
have started notifying incoming freshmen who won’t get the loans as expected.
Some 700 incoming UT freshmen won’t receive the “B On Time” loan.

Campus financial aid officials say they are trying to offer
students other types of loans. But those loans can charge 6 or 8 percent
interest and don’t offer forgiveness for good grades and timely graduation.

Those offers have become even more important in recent
years, when tuition at public, four-year colleges has risen about 40 percent on
average. Tuition, room, board and expenses is expected to top $20,000 this year
at UT’s flagship campus.

Some Texas
colleges didn’t tell incoming freshmen about the “B On Time” loans
because officials weren’t sure the money would come through.

“Our financial aid office did not have confidence that
there would be enough funding to take care of new freshmen, because funding can
be quite variable,” said Susan Rogers, a spokeswoman at the University
of Texas at Dallas.
“You just don’t want to disappoint students.”

About 400 incoming freshmen were eligible for the loans at
UT-Dallas, but the school did not mention them in award letters sent to
students in the spring.

The University of Texas
at Arlington had students sign a
waiting list in case the money became available, rather than telling them they
had the loan. More than 500 were on the list.

Information from: The Dallas Morning News,

– Associated Press

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