1. (a) Grace Period. The repayment period for a loan authorized under this chapter shall begin six months after:

   1. (1) the date on which the student ceases to be enrolled at least half-time at an eligible institution, for borrowers enrolled in credential programs measured in semester credit hours;
   2. (2) the anticipated graduation date certified by the institution of higher education for borrowers enrolled in programs that are not measured in semester credit hours; or
   3. (3) for Texas Armed Services Scholarships converted to loans, the date on which a scholarship is converted into a loan, as described in §22.170 of this title (relating to Conversion of the Scholarship to a Loan).
2. (b) Prepayment. Any loans subject to this subchapter may be prepaid without penalty. Payments made before the repayment period begins do not prematurely activate the repayment period.
3. (c) Late Charges. The Coordinating Board may assess a late charge, not to exceed the lesser of five percent (5%) of the scheduled monthly payment or five dollars ($5.00), if the past due amount is not received within 20 days of the scheduled due date.
4. (d) Application of Payments. Subject to the terms of the promissory note, the Coordinating Board shall determine the priority order in which payments shall be applied to interest, late charges, principal, collections costs and any other charges.
5. (e) To the extent permitted by law, the Coordinating Board may offer a variety of repayment plans to applicable borrowers.
6. (f) The repayment period for Teach for Texas Conditional Grant Program and Alternative Certification Conditional Grant Program (programs for which no new loans are offered but are still serviced by the Coordinating Board) may not exceed 10 years.

Source Note:The provisions of this §24.12 adopted to be effective November 13, 2025, 50 TexReg 7276.