Parent Loan Frequently Asked Questions

Loan Information & Details

Q: Is the Parent Loan limited to only parents of the student on the loan?
A: No, anyone can apply on behalf of the student beneficiary.

Q: Can I apply with a cosigner to qualify?
A: Unfortunately, we do not allow cosigners to be added to a Parent Loan.

Q: Why can't I find my school on the approved school list?
A: The Texas Extra Credit Education loan program is only available for Title IV eligible institutions that offer a Bachelor’s degree or higher.

Q: Can I apply for funds to pay for housing and meal plans?
A: Yes, you can borrower funds through our loan program to cover the cost of housing and meal plans; however, the student’s school must certify your loan application indicating the loan amount you are eligible to receive based on the student’s financial aid/need.

Q: How much can I borrow?
A: The minimum loan amount is $1,000 and the maximum you can borrow is determined by the school you are attending, but is limited to the lesser of your cost of attendance less other aid or $65,000. The maximum aggregate loan limit is $150,000, inclusive of all student loan debt.

Q: Are there out-of-pocket fees for obtaining this loan?
A:No, there are no origination or disbursement fees.

Q: What factors are used in the initial credit review?
A: The initial credit review considers all of the information you provide during the application process, and the information obtained from your credit report. If you pass the credit review, we will need to receive your income verification, school certification, and Applicant Self-Certification Form before final loan approval.

Credit History & Information

Q: Why is a credit check necessary?
A: The credit check serves two main purposes. First, it is used to verify the identity of all people signing the application. Second, it's used for qualification purposes and helps us offer you the best pricing we can based on your credit history.

Q: What factors are used in the initial credit review?
A: The initial credit review considers all of the information you provide during the application process, and the information obtained from your credit report. If you pass the credit review, we will need to receive your income verification, school certification, and Applicant Self-Certification Form before final loan approval..

Application Information

Q: Do I need to apply for Federal Aid before applying for this loan?
A: No, you are not required to apply for Federal Aid before applying for our loan program.

Q: What options do you offer to complete the loan application?
A: The loan application must be completed online to be accepted for review. If you are unable to electronically sign your application, it can be faxed or mailed to our offices.

Q: How long will it take to complete the application process?
A: The approval process can take from 1 -2 business days depending on how quickly you’re able to submit all required documentation. Once the loan has been approved and you have signed the loan application, we will send the School a request to certify the loan. It normally takes schools anywhere from 8 – 12 business days to complete this certification request depending on the time of the year.

Q: How early should I apply?
A: We recommend that you begin the application process at least 30 days before the semester begins – this should allow for ample time to complete the application and submit any required documentation.

Personal & Financial Information

Q: What is the difference between a U.S. Citizen and a Permanent Resident?
A: U.S. Citizen - A person who was born in the United States, including the lower 48 states, Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands; or who became a citizen through naturalization; or who was born outside the United States to U.S. Citizen parents under qualifying circumstances (derivative citizenship) and who has not renounced U.S. citizenship.
Permanent Resident - Any person not a citizen of the United States who is residing in the U.S. under legally recognized and lawfully recorded permanent residence as an immigrant. Also known as "Permanent Resident Alien," "Lawful Permanent Resident," "Resident Alien Permit Holder," and "Green Card Holder."

Q: Will the funds be deposited into my personal account?
A: No. All funds are sent directly to the student’s school. Once the student’s tuition and fees (and any other amount they may owe the school) are satisfied, any excess funds will be disbursed to the student by the school.

Q: Why do you need a personal reference from me?
A: We need a personal reference as an additional means of contacting you during the servicing of your loan. If we are not able to reach you the borrower or the student on the loan we will contact your personal reference.

Q: Who can I use as a reference?
A: Your reference can be anyone over the age of 18, as long as he or she is not living at the same address as you.

Q: Why is my Social Security number needed?
A: We use your Social Security number to verify your identity and to check your credit history.

Q: What qualifies as income?
A: Primary sources of income typically reflect employment earnings, but may also come from other sources such as retirement or rental income. Your spouse's income is not an eligible source of income.

Q: Why is the program only offered to Texas residents?
A: Higher Education Servicing Corporation administers its Texas Extra Credit Education Loan program under the authority provided to it in Chapter 53B of the Texas Education Code, which limits our program to serve only Texas residents.

Loan Repayment Information

Q: Is there a penalty for pre-payment or paying the loan off early?
A: No, you can pay your loan off early regardless of your repayment terms without any penalty. You will only be charged the amount of interest that has accrued on the loan until the day the loan is paid off.

Q: Do I have to make payments on my loan while the student beneficiary is enrolled in school?
A: If you select the Immediate Repayment option or Interest-Only Repayment option, you will be responsible to make payments on the loan while the student beneficiary is enrolled in school. If you select the Full Deferment Repayment option, payments will be deferred for up to 66 months while the student beneficiary is continuously enrolled at an approved school at least half-time.

Texas Extra Credit Parent Loan Program Footnotes

[1] The initial credit review is based on review of all the information the borrower provides during the application process and the information obtained from their credit report. If the borrower passes the initial credit review, they will need to provide acceptable documentation such as income verification and Applicant Self-Certification Form and we will need the certification from the student beneficiary's school before the final loan approval.

[2] The current fixed interest rates range from 2.99% to 7.38% in effect as of 7/6/2023. The fixed interest rate and Annual Percentage Rate (APR) may be higher depending upon (1) the student’s and cosigner’s (if applicable) credit histories (2) the repayment option and loan term selected, and (3) the requested loan amount and other information provided on the online loan application. If approved, applicants will be notified of the rate qualified for within the stated range. APRs range from 2.74% (with Auto Pay Discount [5]) to 6.89%.  The APR reflects the estimated total cost of the loan, including upfront fees, accruing interest and the effect of capitalized interest.  The lowest APR example assumes a $10,000 loan disbursed in a single transaction; the highest APR example assumes a $10,000 loan disbursed over two transactions.  The lowest current APR, based on a 5-year repayment term (60 months), an immediate repayment plan, monthly principal and interest payments of $178.53, has a 2.74% interest rate which includes a 0.25% interest rate reduction for payments via auto pay [5]. The highest current APR, based on a 15-year repayment term (180 months), a deferred repayment plan with a deferment period of 60 months upon initial disbursement, a six-month grace period before repayment begins, monthly principal and interest payments of $128.78, has an 7.38% interest rate. The fixed interest rate assigned to a loan will never change except as required by law or if you request and qualify for the ACH reduction benefit(s) or Graduation reward. Repayment terms and options available may vary depending upon the amount borrowed.

[3] Program loans may be used to cover educational expenses for academic periods that end up to 90 days prior to the application date.

[4] If the student beneficiary should die while enrolled at least half-time at an eligible institution, and the Loan is not in default, the Borrower will be released from the Loan and the Servicer shall write down any outstanding principal and accrued interest balance on the Loan to a zero balance if the Servicer receives acceptable proof of death and proof of enrollment at an eligible institution at the time of the student beneficiary’s death. If the student beneficiary dies and the Loan does not qualify to be written down to zero, the Servicer will inactivate the student beneficiary record on the Loan and continue servicing the Loan in accordance with the Credit Agreement as the Borrower is still obligated to the debt. If the Borrower dies, the Loan will become a charge off Loan. The Servicer may attempt to file a claim against the Borrower’s estate for any unpaid debt under this Credit Agreement. Any payments received from the Borrower’s estate, less collection costs, will be applied to all applicable Loan(s). If the Borrower is released from obligations under this section, no refund will be paid for prior payments made on the Loan.

[5] An interest rate reduction of 0.25% is available for borrowers who make monthly electronic funds transfer (EFT) payments of principal and interest from a savings or checking account. To qualify, the borrower needs to arrange with the loan servicer to automatically deduct monthly principal and interest payments from a bank account. The automatic payment benefit may be discontinued and be lost for the remaining repayment period in the event any three payments are returned for insufficient funds over the life of the loan. This benefit is not available for interest payments made during the deferment period for the Interest Only Repayment option. This benefit may be terminated during deferment and forbearance periods, but can be re-established if borrower reapplies at the end of the deferment or forbearance period.

[6] In the event a Borrower becomes Totally and Permanently Disabled, the Borrower, or his/her representative, may contact the Servicer by phone or mail to request information regarding the Lender’s Total and Permanent Disability (TPD) discharge. Any Loan that has not previously become a charged off Loan or that is not currently in default may be discharged due to the Borrower’s Total and Permanent Disability, as defined by the Lender’s TPD Terms and Application. The definition of TPD, the application form for a TPD discharge, the required supporting documentation, and other terms, limitations, conditions and requirements for a TPD discharge (“TPD Terms”) can be obtained by contacting the Lender or Servicer by phone or mail. The Servicer must receive a completed TPD Application within the timeframe stated within the application that complies with the requirements set forth by the Lender for a Loan to be discharged. If the Borrower meets the TPD requirements set forth by the Lender, the Servicer shall write off any outstanding principal and accrued interest balance on the Loan to a zero balance. For additional information regarding TPD or to request an application, contact the Loan Servicer.

Contact Texas Extra Credit at 1-877-817-9158 M-F, 8am to 5pm CT or info@hescloans.com