The percentage of Texas State students using emergency tuition loans is on the rise, according to administrators.
Emergency tuition loans are available to students who lack sufficient funds to pay for a semester of classes, according to the Student Business Services website. These loans cover the first registration payment for classes and cannot be used to pay for room, board or other charges.
About 6 or 7 percent of the student body use emergency tuition loans, said Bill Nance, vice president for Finance and Support Services.
Texas State officials gave out more than 4,000 emergency tuition loans in fiscal year 2013, said Cindy Kruckemeyer, director of Student Business Services. Approximately 2,003 loans were granted in 2013. Nance and Kruckemeyer said the rise in numbers may have to do with increasing tuition costs.
The Texas Legislature originally created the emergency loan program after a statewide increase in tuition occurred in 1983, Nance said. The legislature tried to offset the extra costs of the increase by offering students a new program.
“I suspect every university in the state followed suit (by offering the program),” Nance said.
The legislature did not mandate the program, but gave universities the opportunity to install it, Nance said.
Kruckemeyer said the Texas Legislature authorizes the amount of money the university can use for emergency tuition loans. She said the university’s “money pot” is filled with payments for one semester and then emptied in the form of loans for the following term.
Eligible students must have minimum 2.0 GPAs, be enrolled in the current semester, have no holds on their records and have valid social security numbers or Individual Taxpayer Identification Numbers registered with the university to receive a loan, according to the Student Business Services website.
If students choose the standard installment plan to repay the loan, they must pay a $30 enrollment fee as well as a 1.25 percent origination fee in lieu of interest, according to the Student Business Services website.
The loans are typically due around the end of the semester, Kruckemeyer said. A hold is placed on students’ accounts, and they cannot register for the next semester of classes until a loan is paid back, she said. Failure to repay the loans on time will result in monthly $25 charges.
The university does not make a profit or any additional money from the loan payments, Nance said. However, Texas State officials have experienced a loss of money from students who do not pay their loans back over the 30-year run of the program, Kruckemeyer said. Student Business Services officials have been forced to replenish the emergency tuition loan fund with money from other sources in the past, she said.
“We’ve periodically had to do that over the 30 years from time to time, but it’s stable now,” Nance said.
Treasurer Valerie Van Vlack said the emergency tuition program specifically helps students whose other financial aid options are not available at the moment of class registration. Emergency loans help get students enrolled quickly so they can focus on a more long-term solution later, she said.
The application process for the loan program has been made more efficient since the electronic application system was first implemented in 2011. The university’s recovery rate for loan payments fluctuates, but has generally increased over time, Van Vlack said.
“It’s pretty high—at least 95 percent of people pay their money back,” Van Vlack said.
The recovery rate has been as high as 100 percent during some semesters, she said.