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How to Pay for The University of Texas at Austin

Image result for university of texasAs the flagship school of the University of Texas system, The University of Texas at Austin uses the proud slogan, “What Happens Here Changes the World.” But before you go changing the world, you’ll first need to figure how to pay for your UT Austin education.

For the 2018-19 school year, the sticker price for one semester at UT Austin fell between $5,056 and $5,810 for Texas residents, and $17,998 and $20,628 for nonresidents, and just for tuition and fees. But chances are you won’t need to pay full price, hopefully getting help from the many grants, scholarships and work-study opportunities available.

You might also need to borrow federal or private student loans, but proceed with caution: The average UT Austin student graduated owing $26,824 in 2017, which can be a lot of debt to manage when you’re fresh out of school.

Read on to learn about your financing options, so you can enjoy UT Austin without stressing about costs.

Costs of attending The University of Texas at Austin
Tuition (in-state) $10,112
Longhorn fixed tuition (in-state) $10,922
Room and board $5,402
Estimated cost $18,416
Typical debt after graduation $26,824
All info current as of 10/10/2018. Sources: The University of Texas at Austin and TICAS.org

Note in the chart above that UT Austin offers a “Longhorn fixed tuition rate” option to entering freshmen. While the fixed rate is slightly higher than the non-fixed option, it will stay the same over all four years. So if you’re concerned about rising tuition costs, selecting the fixed tuition rate has the potential — though not the guarantee — to save you money over the long run.

Unlock financing options with the FAFSA

You have a variety of options when it comes to paying for The University of Texas at Austin. Financial aid can come in the form of grants, scholarships, work-study or student loans.

But before you can access this aid, you’ll need to submit the Free Application for Federal Student Aid (FAFSA). The FAFSA becomes available on Oct. 1, and you’ll need to fill it out every year to remain eligible for financial aid.

If you’re a Texas resident but not a U.S. citizen, you should also fill out the Texas Application for State Financial Aid, or TASFA. This form, which is available in English and Spanish, will connect you with state-level financial aid. International students who are neither Texas residents nor U.S. citizens should fill out the International Student Financial Aid Application, or ISFAA.

Grants for The University of Texas at Austin students

As a UT Austin student, you could qualify for grants — free money for college generally awarded to students with financial need.

The Department of Education offers a few different grants to college students, while the state of Texas offers grants to local students through its College for All Texans initiative.

Make sure to submit the FAFSA to put yourself in the running for these federal and state grants. Some aid is doled out on a first-come, first-served basis, so complete the FAFSA as soon as you can. Here are some you might be offered:

  • Pell Grant: Up to $6,095 in the 2018-19 year for undergraduates with financial need.
  • Supplemental Educational Opportunity Grant: Up to $4,000 per year for students with financial need.
  • TEACH Grant: Up to $4,000 per year for undergraduates who plan to teach high-need subjects at schools that serve low-income students.
  • Texas Public Education Grant: Amounts vary for this grant, available to both residents and nonresidents with financial need. Funding is limited, though, so not everyone who qualifies will receive funds.
  • TEXAS (Toward EXcellence, Access and Success) Grant: This variable-amount grant goes to Texas students with financial need who meet certain academic criteria.

Besides federal and state grants, you might also win grants from private organizations. You can search for private grants online or ask your school counselor for suggestions. Note, however, that private organizations might have their own application forms along with the FAFSA. Make sure to check for any extra requirements or deadlines so you don’t miss out on free money for college.

Scholarships for University of Texas at Austin students

Like grants, scholarships are a type of gift aid that doesn’t need to be repaid. But unlike grants, they are often awarded for reasons other than financial need, such as academic performance or extracurricular activities.

UT Austin supports its student population with a variety of scholarships. Some of these are available to students across the university, while others are awarded within certain colleges or departments. Here are a few options for UT Austin students:

  • Presidential Scholars Program: This is a prestigious program for students with strong academic achievement and high financial need. It involves an annual scholarship award, as well as participation in an enrichment program with opportunities to network.
  • University Co-op / George H. Mitchell Award: Awards of $2,500, $5,000, or $12,000 are available to seven undergraduate students for their academic or creative achievement.
  • University Leaders Network Scholarship: This program offers $5,000 per year for four years to 500 UT Austin freshmen with financial need.
  • Roy Crane Award in the Arts: This scholarship gives $1,000 to $4,500 to a UT Austin student for their creative effort in the arts.
  • UT System Regents Award in Arts & Humanities: The $1,500-$2,500 award goes to an individual or group of students who excel in music, visual arts, poetry or short essay writing.
  • Forty Acres Scholars Program: This is one of those rare ”full-ride scholarships” that will cover your entire cost of tuition. The competitive scholarship goes to students with strong academic credentials and communication skills, as well as demonstrated leadership and involvement in extracurricular activities and community service.

Along with the FAFSA, you might be required to submit UT Austin’s “scholarship interest form,” which is available through your UT Austin online student account.

Apart from institutional scholarships, you could also apply to scholarships from private organizations. There are thousands of opportunities across the country, and you can find them with online scholarship search tools such as Scholly or College Board Scholarship Search. For instance, students planning to major in a STEM field could apply for the Astronaut Scholarship Foundation award or the Barry Goldwater Scholarship.

If you’re in high school, you could also speak with your school counselor about local opportunities. By applying far and wide to scholarships, you could get major help paying for college — and you won’t have to take on as much student debt as a result.

Federal and Texas work-study programs

If you’ve got financial need, the work-study program can help you find a part-time job, either on or off campus. Although it doesn’t guarantee employment, it usually gives you a leg up on the competition, since certain jobs are only available to students with work-study.

Both the federal government and the state of Texas provide work-study funding. The federal program is open to any qualifying student, while the Texas work-study program is only available to Texas residents.

UT Austin offers a variety of on-campus work-study jobs, including jobs in lab research, social science research, photography and curatorship, child care, library services and housing and food services.
You might also participate in off-campus community service work-study. These jobs are typically with nonprofit employers in public television, museums, child care centers, health care clinics or tutoring programs.

Once you’ve accepted your work-study award, you can search for available work-study jobs on the Hire a Longhorn Job Bank.

Federal student loans

After exhausting your options for grants and scholarships, you might need additional funding for college. If that’s the case, it could make sense to borrow federal student loans from the education department.

A popular federal student aid option for undergraduate students is the direct loan. You don’t need to pass a credit check to qualify — in fact, anyone attending an eligible school (such as UT Austin) can take out a direct loan.

There are two types: unsubsidized, which accrue interest from the date of disbursement, and subsidized, which don’t require you to pay interest until your grace period ends and repayment begins.

Your financial aid package from UT Austin will detail which loans you qualify for and how much you can borrow. Federal student loans tend to be better options than private ones, since they come with the following benefits:

  • Income-driven repayment plans: Plans such as income-based repayment, income-contingent repayment, Pay As You Earn and Revised Pay As You Earn that adjust your monthly payments along with your income and family size. If you still have a balance at the end of your 20- or 25-year term, it will be forgiven.
  • Forbearance and deferment: Programs that allow you to postpone payments on your loans if you return to school or run into financial hardship. Note that interest might continue to accrue during these periods.
  • Eligibility for federal loan forgiveness programs: Programs such as Public Service Loan Forgiveness and Teacher Loan Forgiveness will wipe away part or all of your federal student loans in exchange for qualifying service.
  • Fixed interest rates: While some private student loans come with variable rates that could change over time, federal student loans have fixed rates that will remain the same over the life of your loan.

The Department of Education also offers PLUS loans to graduate students or parents of undergraduates paying for their child’s education. Grad students or parents can borrow up to the school’s full cost of attendance in PLUS loans, but they must pass a credit check to qualify. Note that the only income-driven PLUS loans are eligible for income-contingent repayment, and you must consolidate the loans before applying.

This table compares the interest rates and origination fees of the various federal student loans.

Federal student loan Who can use it? Interest rate (2018-19) One-time loan fee* Interest paid for you during deferment Annual loan limit
Subsidized Undergraduate students with a demonstrated financial need 5.05% 1.062% Yes Up to $5,500 per school year
Unsubsidized Undergraduate students 5.05% 1.062% No Up to $7,500 per school year for dependent students
Up to $12,500 per school year for independent students
Unsubsidized (for graduate students) Students working toward a graduate or professional degree 6.60% 1.062% No Up to $20,500 per school year
PLUS Graduate students and parents of undergraduate students 7.60% 4.248% No Cost of attendance, after all other student aid is applied
All information current as of Oct. 4, 2018. Source: Federal Student Aid

Although federal student loans can be a useful tool for paying for college, make sure you understand what you’re getting into before you borrow. Use a student loan repayment calculator to estimate your future monthly payments and the amount of interest that will accrue. By doing your due diligence now, you can avoid taking on too much debt.

Related imageUniversity of Texas at Austin student loans

Federal student aid is likely your best option for borrowing student loans, but UT Austin also offers two types of short-term loans to students in need:

  • Emergency cash loans: Up to $500, and the loan is due back within 30 days.
  • Tuition loans: Up to the balance of your tuition bill for Texas residents, and up to 50% of your tuition bill for non-residents. This loan must be paid back within 30 to 90 days.

While a UT Austin loan can help you out of a tight financial spot, it isn’t a long-term solution for financing your education. If you’re a Texas resident, you might also look to the state’s College Access Loan (CAL) Program.

The CAL Program provides loans at a 5.30% interest rate to Texas residents who are unable to meet their school’s cost of attendance. You must pass a credit check to qualify or apply with a cosigner who can.

In the past, Texas also offered a zero-interest loan to state residents. If they graduated on time, this loan would be forgiven. Unfortunately, the Texas B-On-Time (BOT) Loan Program isn’t funding new loans, but it is offering renewal loans for existing BOT loan borrowers.

Private student loans

Since federal student loans come with borrowing limits, you could still end up with a gap in funding after you’ve borrowed. In that case, you might explore your options for private student loans.

Private student loans can come from a bank, credit union or online lender such as CommonBond or College Ave. Each lender sets its own requirements, but most look for strong credit and a stable income. The majority of undergraduates can’t qualify on their own, so they apply with a creditworthy cosigner, typically a parent.

Private student loans differ from federal ones in a few ways. For example, they might have a variable interest rate, though a fixed rate option is often available as well. Also, you can choose repayment terms, often between five and 20 years when you borrow, but you usually can’t change your terms after that.

Private lenders don’t generally offer income-driven repayment plans, deferment or other options that come with federal loans. In most cases, the only way to restructure your debt after you’ve borrowed is through student loan refinancing.

Since each lender is different when it comes to interest rates, term lengths and other loan features, it’s a good idea to shop around and compare offers. By connecting with a few lenders, you can find a student loan with the best terms.

Apart from looking for the lowest rate, don’t forget about other perks as well. For instance, you might find a lender that offers forbearance if you run into financial hardship after graduation. Or you could look for one that offers cosigner release after a certain period of on-time repayments. Ascent even offers the perk of a 1% cashback reward upon graduation if you meet certain criteria.

So while comparing interest rates is important, also keep an eye out for other benefits that could give one lender an edge over another.

Paying for The University of Texas at Austin

When planning on how to pay for a University of Texas at Austin education, remember to max out your options for gift aid before turning to student loans.

After grants and scholarships, your next stop might be federal or state student loans, but if you still have a financial gap, private student loans can be useful. Just make sure you understand the terms of your debt before borrowing.

And even if you’re just starting college, it’s never too early to come up with a plan for repayment. By laying out the details now, you’ll be better prepared to hit the ground running after you graduate. You might even find ways to pay off your student debt ahead of schedule.