Endowment funds new university loans
Published: Sunday, February 9, 2014
Updated: Sunday, February 9, 2014 23:02
The East Tennessee State University financial aid office is offering a little extra help to students who are having trouble paying for school.
To help retain current students, the financial aid office has implemented three new loans this semester. These loans are designed to help students with books, emergencies and previous balances.
“We, of course, are very grateful for the opportunity to help some students who, in times past, really want to finish school and didn’t see another way to do it,” said Margaret Miller, director of the financial aid office at ETSU.
The new loans are being funded by an endowment left by Elsie Gillingham Hughes in her will. Hughes specified in her will that she wanted the money to be used for loans. The three new loans, the E.G. Hughes Enrollment Loan, the E.G. Hughes Kick-Start Loan and the E.G. Hughes Emergency Event Loan, are all geared toward helping students stay in school.
“One of the things the university is really trying focus on right now is student retention, is helping find out who the students are who are not continuing from one semester to the next because of issues that we can do something about,” Miller said.
Each loan has a specific origination fee, depending on the amount of the loan. However, none of the new loans have interest rates. Students with no credit can also apply.
“One of the big changes is the past emergency loan and short-term loan that we had required co-signers, and now, we’ve taken the co-signers off,” said Lisa Bell, assistant director of the office of financial aid at ETSU. “It was a big problem getting cosigners to co-sign a loan, so this will help students faster.”
In the past, many students have found themselves out of school because they had previous balances that kept them from registering. Federal law bars students with past balances exceeding $200 from returning to school.
“That’s where we get into a pickle because a lot of students have the financial to pay off that balance in the next semester, but we can’t allow them to pay off more than $200 of a prior year’s loan,” Miller said.
The E.G. Hughes Enrollment loan pays off a previous balance up to $2,000, so students are able to register for the next semester.
Miller said that students generally have the money to pay off the balance with the financial aid from the next semester, and this loan helps them register so they can receive their financial aid.
Even though the loan has no interest and doesn’t require a co-signer, students are required to pay off the loan by the end of the new semester.
The loan pays off a student’s previous balance; however, it also shows as a new charge for the next semester. To be approved, students also can’t owe any other university loans.
Students caught in an emergency situation in the semester could also be eligible for one of the new loans, the E.G. Hughes Emergency Event Loan.
“A student who finds themselves in a real emergency during the semester could apply for this loan up to $1,000,” Miller said.
“And that would be for things that would otherwise prevent them from finishing the semester.”
Students are required to provide documentation of the emergency, and the loan money could be disbursed as soon as one day after application.
“It will help students when they have emergencies, so that’s a good thing,” Bell said.
The third loan is the E.G. Hughes Kick-Start Loan, which aids students in additional, school-related expenses.
The loan isn’t so much new as it is simply re-named.
“It is basically it’s going to take the place of what we used to call the book loan,” Miller said. “It’s a small loan that students can get up to $500.”
Miller said these new loans are opening up opportunities for students that the financial aid office hasn’t always had, and that the financial aid office and the bursar’s office are always looking for ways to help students stay in school.
Students can find additional information on the new loan policies on the ETSU financial aid website under the loan tab.
“We’re glad we have these because we have not had a lot of resources for these kinds of small loans for people in the past, and this is meeting the intent of what Mrs. Hughes wanted done with her endowment,” Miller said.