Student Freedom Agreements are funded by the Student Freedom Initiative. The Student Freedom Initiative is a 501(c)(3) nonprofit organization whose mission is to provide a catalyst for freedom in professional and life choices for students attending Minority Serving Institutions.

To be eligible to receive funding via the Student Freedom Agreement your school must be a participant in the Student Freedom Initiative program, students must have a valid Social Security Number (SSN). Prior to processing an application for a Student Freedom Agreement the financial aid office will also need to confirm that the student:

• Completed a FAFSA or acceptable alternative state aid application that is accepted and approved by your school;
• Has a valid Social Security Number and are not an international student or foreign exchange student authorized to enter the United States on a non-immigrant visa;
• Is majority age or older (18 years or older in most states);
• Is enrolled full-time for the coming academic term (unless full-time enrollment is not required in your final term of study to obtain your bachelor’s degree);
• Is meeting “satisfactory academic progress”, as defined by your institution;
• Is a rising junior or senior (based on credit hours) working towards a degree in one of the following approved STEM bachelor’s degree at Prairie View A&M University:
  • Computer Science
  • Chemical Engineering
  • Civil Engineering
  • Computer Engineering
  • Electrical Engineering
  • Mechanical Engineering
  • Biology
  • Mathematics
  • Chemistry
  • Physics

Please refer to the Student Freedom Initiative’s website for the latest information.

The Student Freedom Agreement application will open in late May 2021 on the Student Freedom Initiative Student Portal. After receiving an award letter or award information from the Financial Aid Office and decided the Student Freedom Agreement is right for them, students should complete the Student Freedom Agreement application. It is important to note that students should not submit an application until they have received an award letter or Student Freedom Agreement information from the Financial Aid Office.

Funds will be disbursed through standard campus disbursement procedures.

The Student Freedom Agreement should be considered just one part of a student’s overall financial aid package. The Student Freedom Agreement “is not intended to replace” available state and institutional aid, as well as federal grants, work-study and Direct Subsidized and Unsubsidized loans, a Student Freedom Agreement is an “alternative” funding option for up to $20,000 per academic year of the remaining cost of attendance at the institution. It is being offered as a “funding” alternative to private student loans and Parent PLUS loans.

Students can receive up to $20,000 per academic year. There is a cap on total funding a student can receive under a Student Freedom Agreement, which is currently $40,000 total.

The payment period will begin on January 1st after one of the following events occurs (whichever comes first):

1. The student graduates from college; or,
2. Four years have passed since the student’s first Student Freedom Agreement disbursement (if the first disbursement was during their junior year) or three years have passed since their first Student Freedom Agreement disbursement (if the first disbursement was during their senior year).

Each year, the Student Freedom Initiative will set a minimum income threshold at or above which a student must make payments. That threshold is currently approximately $28,980 per year and may change in subsequent years to account for inflation. Students must make income-based payments if they make $28,980 or more a year. If the student doesn’t make at least $28,890 in a year, they will not owe any income-based payments for that year.

During this time in which the student owes nothing, the clock is still ticking on the 20-year repayment period.

No. Students are required to pay an agreed upon percentage of their income for 20 years or until their payments reduce the termination amount to $0 (whichever comes first) for each year during which their income is at least $28,980. After 20 years pass, you will incur no new payment obligation. If, at any time after the 20th year, you owe any outstanding balances or take deferrals in the 20th year, then you will continue to make Regular Monthly Payments after the Payment Years. An outstanding balance can occur if you report less income than you actually earned and you didn’t pay-off that difference in following years.

Some students may reach the end of the 20-year payment period without paying the full amount they received. Their payment obligation is complete.

Some students will pay back more than the amount they received. How much they will pay will depend on their income and how quickly the payments they make reduce the termination amount to $0.

The Student Freedom Agreement has a cap on the total amount payable. The cap is designed to make sure the overall cost of a Student Freedom Agreement remains lower than the cost of a Parent PLUS loan (paid over the same time period). This cap is set by tracking what is called the termination amount. The termination amount is initially set somewhat higher than the amount received through a Student Freedom Agreement and has an annual growth rate that is lower than the interest rate of a Parent PLUS loan.

IMPORTANT: For some students, the total amount paid under a Student Freedom Agreement can be greater or less than the amount that would have been paid under a Parent PLUS loan depending on the length of time it takes to complete payments and how large payments are. The Student Freedom Initiative Cost Calculator and Federal Student Aid Loan Repayment Calculators can help provide comparisons of total amount paid under different repayment and income scenarios.

While students are obligated to make payments that are a certain percent of your income, you can make larger payments or even complete your obligation by paying the termination amount of your Student Freedom Agreement at any point. There is no penalty for doing so. Paying the termination amount down to $0 sooner will often translate to paying less overall. There is no penalty for doing so.

The Student Freedom Agreement will allow students to elect to defer payments otherwise due in any given month, subject to certain limitations. Student will be able to defer all or part of a monthly payment at their option (and without proof of hardship) up to twelve times, no questions asked. And this doesn’t have to be in consecutive months. The amount deferred would then be spread out and paid over the next twelve months. Once the student has paid all amounts deferred this way, their bank of elective deferrals would reset back to twelve.

Note that months during which the student has no payment obligation because they aren’t earning at least the minimum threshold amount (currently approximately $30,0000 per year) do not count as deferrals. Deferrals only apply when a payment would otherwise be due.

There is no fee or other penalty for students who use a deferral. However, because the termination amount continues to rise during the period of deferral, deferring a payment will increase the time it takes to reach the termination amount and complete the payment obligation, meaning students will end up paying more overall.

If a student has 12 deferrals and miss additional payments, the Student Freedom Initiative will treat the additional payments as delinquent.

Interested students can find information about the Student Freedom Agreement at the Student Freedom Initiative website https://studentfreedominitiative.org/student-freedom-agreement/.