Tau Beta Pi Student Loans
The resources of Tau Beta Pi's Student Loan Fund are available to members who otherwise would be without sufficient money to remain in college and complete their courses. Loans of $25 to $2,500 are made for up to three years, and the interest rate is six percent per annum on the unpaid balance (changed from eight percent in 1992) beginning from the time the loan is made. (After three years the interest accrues at 10 percent.)
An application for a loan to an undergraduate must be approved by a department head and the chapter president, recording secretary, and treasurer. Loans are available to new members for the amount of the initiation fee. Notes must be co-signed by financially independent persons, such as a parent. Application forms are on the website.
Until 1950, student loans were limited to $250 per borrower and were available only to undergraduates. The 1950 Convention included graduate students and increased the loan limit to $500. The 1979 Convention raised the limit to $1,000, the 1996 to $2,500.
The major source of funds for loans is the resource of the prepaid BENT subscription account. A sizable sum of money, which eventually will be used to pay publication costs, would ordinarily lie idle until then. Making it available to undergraduate members in need was the idea of the Executive Council in 1931.
A permanent Student Loan Fund was established by the Executive Council in 1950 by transferring $3,500 from the unappropriated surplus to the new fund. This fund, while supplementing the present major source of loan money, is growing to significant importance because one-half of all interest collected on loan notes is being added to the fund. Since inauguration of the program in 1935, 1,784 loans have been made totaling more than $862,675.