Texas Student Loans in 2024: What You Need to Know

When it comes to student loans, being a Texas resident has tremendous benefits. After all, they don’t call it the “big state of Texas” for no reason. The Lone Star State is home to some of the most generous student loan programs in the country.

While you may have some money set aside from family, work, or scholarships, there’s a good chance you have a significant gap to fill when it comes to funding your education. The good news is Texas student loans can help bridge this financial gap, creating opportunity in higher education where there may not have been otherwise.

Students and families pay for college in many different ways, but almost all can receive some kind of financial aid. Federal, state and private student loans are all available to Texas students in addition to unique financial aid programs offered through the state. Unlike many scholarships and grants, student loans are not based on merit, nor does a student need to demonstrate financial duress to qualify for every loan.

Many students and families miss out on college because they assume they can’t afford it. While college can be expensive, don’t assume you can’t pay for it until you know the facts. To better understand student loans in Texas and how they can meet your financial needs, explore the guide below to gain information about state-specific student resources, the importance of FAFSA and choosing a loan that fits your educational path.

How to Apply for Student Loans in Texas


Filling out the Free Application for Federal Student Aid, better known as the FAFSA, is one of the most important steps Florida students and their families can take to pay for college. The FAFSA is used nationwide and is a mandatory step to determine the kind of federal aid a student receives. Additionally, it opens the door to a variety of financial aid opportunities.

Financial aid options available through the FAFSA include:

  • Direct Subsidized and Unsubsidized Loans
  • Perkins Loan
  • Direct PLUS Loan
  • Federal grants
  • Some state grants
  • Federal Work-Study Program

To guide students and their families through the application process, we created this interactive FAFSA guide that walks you through the application steps and how to answer each questions the best way possible.

The Texas Higher Education Coordinating Board Loan Program


The Texas Higher Education Coordinating Board (THECB) Loan Program provides consistent, low-interest student loans for state students who are qualified to pay in-state tuition rates. Since the state of Texas holds on to the student loans rather than selling them, the loans are serviced by the state.

The THECB Loan Program includes the following student loans:

  • College Access Loans (CAL). The CAL program provides loans to Texas residents who are unable to meet the cost of attendance, regardless of financial need. Your CAL loan amount will be determined on your cost of attendance minus the amount from any other financial resources. There is no loan origination fee. You can borrow as little as $100 and up to the cost of attendance minus any other financial re-sources.
  • Texas B-On Time Loan (BOT). The BOT is a zero-interest loan available for current Texas college students. Loans are administered on individual participating college campuses across the state of Texas. Beginning with the 2015-2016 academic year, only renewal awards are available.

The North Texas Higher Education Authority/Higher Education Servicing Corp.

The North Texas Higher Education Authority (NTHEA) partners with state-based lenders to provide affordable student loans to Texas students.

Texas Extra Credit Education Loans have competitive fixed or variable interest rates repayment terms of 10 to 15 years. You can borrow anywhere from $1,000 to $65,000 annually and there are no fees associated with applying. To be eligible for this loan you must be a permanent Texas resident enrolled at least half-time in a degree-granting program at an approved school. If you are using a cosigner, they also need to be a permanent Texas resident. Your cosigner can be released after 24 months of on-time repayment.

Institutional Student Loans

Some colleges offer institution-specific student loans that are meant to help bridge the financial gap. These loans are extended by colleges and universities as a way to cover educational costs that remain after other forms of financial aid have been applied.

They are called institutional loans because the school is the creditor. Since they are institution-specific, the interest rates and repayment terms vary. The financial aid office at your school will be able to tell you if they have these loans available.

Some schools offer these loans to students who are ineligible for federal loans or have need remaining after federal eligibility has been exhausted.

One school that offers institutional student loans in Texas is the University of Texas at Austin. They offer two types of short-term institutional loans:

  • Emergency Cash Loans. These short-term loans are available to students who are enrolled at least half-time and are capped at $500. The amount you borrow is due in 30 days. You can apply online through the student accounts receivable page.
  • Tuition Loans. These short-term loans are available to students who are enrolled at least half-time. Borrowing for Texas residents is limited to the current tuition bill. Non-residents may only borrow 50% of their tuition bill. All loans are due in 30-90 days dependent upon date borrowed.


Student Aid and Debt

Being a college student in Texas could mean graduating with less debt than most of the other students across the country. Even though 56% percent of graduates from Texas schools have outstanding student loan debt, the average is only $26,292. This is much lower than the national average of $37,172.

With a strong access to financial aid, scholarships, and grant programs, Texas residents and out-of-state students have a vast amount of educational opportunities at their fingertips.

Students in Texas Awarded Student Loans

Federal Student Loans

The U.S. Department of Education offers two federal student loan programs: the Direct Loan Program and Federal Perkins Loan Program. Eligibility for both programs is determined by a students FAFSA application.

1. The Direct Loan Program is the largest federal student loan program offering four different types of loans for students with and without financial needs. Under this program, the U.S. Department of Education is your lender.

  • Direct Unsubsidized Loans: Loans offered to undergraduate, graduate, and professional students. Financial need is not a requirement to be eligible for this loan.
  • Direct Subsidized Loans: The Direct Loan option is available to students who demonstrate financial need and helps cover the costs of higher education at a college or career school. Unsubsidized and subsidized student loans are also referred to as Stafford Loans.
  • Direct PLUS Loans: These include the Parent PLUS Loan and Grad PLUS Loan. These options are available to graduate or professional students and parents of dependent undergraduate students. The borrower should not have an adverse credit history and the maximum award of the loan is the cost of attendance minus other financial aid awards which is determined by the school.
  • Direct Consolidation Loans: This option allows students to combine all eligible federal student loans into a single loan with a single loan servicer.

2. The Federal Perkins Loan Program is offered to students with exceptional financial need. Under this program, the school is your lender.

Federal students loans offer options for students of all socioeconomic backgrounds and generally speaking, are a safe bet offering good interest rates and repayment options for student borrowers.

How to Apply for A Private Student Loan

If you’re in need of additional financial aid, consider taking out a private loan to acquire the remaining funds you need for your college education. Before taking out any private loans, play around with our free NitroScore tool to get a better idea of the size of loan needed, and which of our highly vetted loan partners can offer you the best rate.

The tool will ask you to enter a college and major into the boxes provided. It will use that information to calculate your total costs, salary after graduation, and potential loans needed. From there, you will receive a score that tells you how easy those loans will be to repay based on your projected salary. Further customize your results by including information about scholarships, grants and savings. You can also compare different college or major combinations to get a better idea about which options fit your financial situation.

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