Brazos Student Loan Program: An Overview

For students pursuing higher education, understanding the landscape of student loans is crucial. The Brazos student loan program offers a unique set of options, particularly for Texas residents. This article delves into the details of the Brazos student loan program, exploring its features, benefits, eligibility requirements, and how it compares to federal loan options.

What is Brazos Education Lending Corporation?

Brazos Education Lending Corporation is a Texas non-profit managed by Brazos Higher Education. It is the lender on all Brazos Loans. The first of the Brazos Managed Companies was organized in 1975 in Waco, Texas, as a secondary market for student loans. Since that time, the Brazos Managed Companies have, on a combined basis, served an estimated 2 million student borrowers and have helped fund an estimated $30 billion in student loans.

Key Features of Brazos Student Loans

Brazos is notable for its low interest rates and lack of origination fees. This combination makes Brazos a particularly good option for graduate students. For the best-qualified borrowers, Brazos graduate student loan interest rates may be lower than those charged by the federal government. The federal government also charges an origination fee, while Brazos does not.

Eligibility for Brazos Loans

To qualify for a Brazos private student loan, you must be a resident of Texas, typically be enrolled more than half-time at a qualifying school, and have a credit score of at least 680. The schools can include online schools and satellite campuses. Brazos loans are generally geared toward students with strong finances or those who have a qualified co-signer.

Loan Details

Brazos private student loans offer a range of interest rates, fees, and terms. A soft credit check is performed to qualify and see what rate you’ll get. Loan terms include 5, 7, 10, 15, or 20 years. Loan amounts range from $1,000 up to the cost of attendance, minus other aid. There is no application or origination fee, and no prepayment penalty. Late fees do apply: 5% of the entire payment that was not paid when due or $35, whichever is less, if the borrower fails to make any part of a payment within 15 days of its due date.

It's important to compare Brazos' range of interest rates with other lenders, as your actual rate will depend on factors that include your - or your co-signer's - credit history and financial situation.

Borrower Eligibility

Brazos loans are available to U.S. citizens or permanent residents and DACA borrowers with a citizen or resident co-signer. Loans are available to Texas Residents attending accredited Title IV schools nationwide and to non-Texas residents attending accredited Title IV schools in Texas. Students obtaining final credit hours qualify, and loans can be used for past-due tuition. Borrowers must attend an accredited Title IV school nationwide. A significant percentage of borrowers, around 93%, have a co-signer.

Repayment Options

Brazos offers several repayment options to accommodate different financial situations.

In-School Repayment Options

Immediate repayment: Make full payments as soon as the loan is disbursed, while you’re still in school.
Interest-only repayment: Pay interest every month you’re in school and during the grace period.
Full in-school deferment: Don’t make any payments while you’re in school.

Post-School Repayment Options

Grace Period: 6 months.
Income-based repayment option: No.
In-school deferment: Yes.
Internship deferment: Yes.
Residency deferment: Yes.
Military deferment: Yes.
Forbearance: Borrowers are able to defer payment on their loan for 3 months at a time, with a cumulative forbearance length of 12 months.
Co-signer release available: Yes. Release available after prepaying an amount equaling 24 months of principal and interest payments before the request or after 24 consecutive on-time payments.
Death discharge available: Yes.
Disability discharge: Yes.
Loan discharge if co-signer dies or becomes disabled: No.

Brazos allows biweekly payments via autopay. A 0.25% interest rate discount is available for autopay.

Customer Service

Loan servicing is handled by American Education Services (AES). Brazos has an in-house customer service team and a process for escalating concerns. Borrowers get assigned a dedicated banker, advisor, or representative. Loans are school certified and disbursed directly to the school shortly after certification.

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Before Applying for a Brazos Loan

Before taking out a Brazos student loan or any other private student loan, exhaust your federal loan options first. Submit the Free Application for Federal Student Aid, known as the FAFSA, to apply.

It is important to compare your private student loan options to make sure you’re getting the best rate you qualify for. In addition to interest rates, look at lenders’ repayment alternatives and the flexibility they offer to borrowers who struggle to make payments.

If Brazos denies your student loan application, the lender will let you know why. Depending on the reason, you may want to consider other lenders or, if you haven’t already, try applying with a co-signer.

Brazos Student Loan Refinancing

Brazos limits its refinancing services to residents of the State of Texas (including certain visa holders) and loans used to attend Texas schools. There is no limit to the number of times a borrower may refinance with Brazos. You can refinance some, all, or just one of your qualifying student loans with Brazos, including loans that have already been refinanced.

When considering refinancing, it's important to do your homework before you decide on a federal consolidation loan or refinancing with a private lender. If you consolidate your existing federal loan into a private refinance loan, you may lose valuable benefits, such as income-driven repayment plans and potential loan forgiveness options that may be valuable to you in the long run.

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Brazos and Credit Scores

Checking your rate with Brazos does not affect your credit score. To determine eligibility, Brazos first conducts a soft credit inquiry that does not impact your credit score. However, if you choose to apply for a Brazos Loan, they will request your full credit report. This credit pull may impact your credit score.

When you apply for a Brazos Student Loan, the FICO score used will be the Transunion FICO Score 9, which is based on information from Transunion. When you apply for a Brazos Parent or Brazos REFI Loan, the FICO score used will be the Transunion FICO Score 9.

Brazos Scholarship Giveaways

Brazos offers monthly $5,000 and $1,000 no-essay scholarships to Texas residents.

How Brazos Could Improve

Brazos could improve by offering loans to borrowers at community colleges who are earning two-year degrees and providing disability discharge for co-signers.

Complaints and Legal Issues

As consumer finance companies, student loan refinancing lenders fall under the jurisdiction of the Consumer Financial Protection Bureau (CFPB), a federal agency. As part of its mission, the CFPB allows consumers to log official complaints. Complaints about Brazos accumulate at a rate that is 81.2% slower than the average daily complaint rate among reviewed lenders. Among these complaints, zero (0) reference refinancing; most have to do with declarations of bankruptcy and flexibility of payment options.

In 2007, former Department of Education (ED) employee Dr. Jon H. Oberg filed a Complaint for Violations of False Act against several public and private student loan financing entities, including Brazos Group, alleging these entities defrauded the ED and submitted falsified claims for special allowances made to student borrowers.

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