Loans

Loans are a major source of aid for students.  Student loans must be repaid after the student graduates, withdraws from school, or drops below six credits.  Interest rates, grace periods, and repayment requirements vary depending on the type of loan. 

In accordance with U.S. Department of Education regulations (HEOA 489 amended HEA Sec.485B) a student’s title IV loan information is submitted to National Student Loan Data System (NSLDS). Authorized agencies, lenders, guarantors, servicers and institutions have access to this information. For more loan information student and parent borrowers can visit: studentaid.gov .

Federal Direct Subsidized 
Federal Direct Subsidized  Loans are loans available to students with financial need based on the SAI calculated by the Federal Processor. Subsidized means the government pays the interest on the loan while the student is in school and during the grace period (six months).

Federal Direct Unsubsidized 
The Federal Direct Unsubsidized  Loan is essentially the same loan as the Federal  Direct Subsidized, with one exception: the loan begins accruing interest immediately upon issue. The interest can be capitalized (added to the principle of the loan) or can be paid each year. Paying the interest yearly is recommended, as the student does not accrue interest on the interest already accrued.

Both the Subsidized and Unsubsidized loans are:

• Available to students regardless of FAFSA filing time.
• Students must be enrolled at least half time (6 credits).
• The grace period for these loans is six months from the date of the last class attended, regardless of whether or not the student graduates.  This means that even if the student decides to take a semester off, he/she could still be held responsible for a loan payment.
• Interest rates will be established each year, based on the high-yield of the 10-year Treasury note plus a 2.05% add-on.  The interest rate for the 2023-2024 academic year is 5.50%.  The maximum cap will be 8.25% for undergraduate loans. For the most current interest rates please visit https://studentaid.gov/understand-aid/types/loans/interest-rates
• The loan origination fee is another expense of borrowing a Direct Loan. The origination fee is subtracted proportionately from each loan disbursement.  The origination fee for Direct Subsidized and Unsubsidized Loans with a first disbursement on or after October 01, 2020 but before October 01, 2024 is 1.057%.  The origination fee for Direct Subsidized and Unsubsidized Loans with a first disbursement on or after October 1, 2023 is TBA.  For the most current origination fee rate please visit  https://studentaid.gov/understand-aid/types/loans/interest-rates
• The student must sign a Master Promissory Note (MPN) before the funds will be disbursed, which can done electronically.
• All first-time borrowers must complete the entrance loan counseling requirement before they receive their first disbursement.
• First-time borrowers who are in the first year of their academic program will not receive a loan disbursement until 30 days after the start of the semester.

Award Amount:
Dependent students may borrow:
A maximum of $5,500 as a freshman (up to $3,500 may be subsidized) and $6,500 as a sophomore (up to $4,500 may be subsidized).
Independent students may borrow:
A maximum of $9,500 as a freshman (up to $3,500 may be subsidized) and $10,500 as a sophomore (up to $4,500 may be subsidized).

Disbursement of Your Federal Direct Loans:
If your loan is for the full year (fall and spring semesters) 50% of your loan will be disbursed fall semester and 50% spring semester. If you are taking a one term only loan (fall only, spring only, or summer only), you will receive your loan disbursement in two equal installments during that term. The second disbursement will occur no earlier than the midpoint of the term and after mid-term attendance has been reported for you.

If you are a First Year, First Time Student Loan Borrower, your first loan disbursement will be 30 days after the start of the first class in which you are reported as attending.

Federal Parent PLUS Loan

Parents and/or step-parents of undergraduate dependent students may utilize the Federal Direct Parent PLUS Loan to assist in paying the student's educational expenses. Parents may borrow up to the difference between the cost of education and other financial aid for which the student is eligible.

Interest Rate and Processing Fees

• 8.05% fixed interest rate for loans disbursed between July 1, 2023 and June 30, 2024
• 4.228% loan origination fee will be deducted for loans first disbursed between October 1, 2023 and September 30, 2024 (2024-2025 origination fees coming soon)

Applying for the Federal Direct Parent PLUS Loan

• Apply online at https://studentaid.gov/plus-app/parent/landing

Steps to Complete the Online PLUS Application

• The parent borrower must sign in to https://studentaid.gov/plus-app/parent/landing with their FSA ID.
• Once signed in, select Request Direct PLUS Loan.
• Select Parent PLUS for the loan type.
• Fully complete the application and submit it. Make sure to select the correct aid year. 
• Once submitted, you will receive a notification immediately of your approval or denial. 
• Next, complete the Parent PLUS Master Promissory Note (MPN) at the same website, https://studentaid.gov/mpn/parentplus/landing. Make sure to complete all four steps and receive notice that your MPN is successfully submitted. Print a copy of the MPN for your records. 

Both application methods will generate a credit check on the parent who is applying for the loan. The credit check is valid for 180 days. 

If your parent's application is denied due to adverse credit history, contact the DCC Financial Aid Office to discuss your options. Beginning March 29, 2015, PLUS loan counseling will be required if you are determined to have an adverse credit history, but qualify for a PLUS loan by documenting extenuating circumstances or obtaining an endorser. This can be completed at https://studentaid.gov/app/counselingInstructions.action?counselingType=plus. 

Please note: PLUS Loan applications must be completed every year as part of the Federal Student Aid Application process.

Disbursement

The approved loan (less fees) will disburse to the student's account after all steps are completed. Please allow 10 days for processing. If the approved loan is for the full academic year, it will be divided in half, with 50% of the loan disbursing in the fall and 50% in January. 

Deferment and Payment

Repayment begins on the PLUS loan immediately after the load in sully disbursed. Parent borrowers may contact their loan servicer to request a deferment while the dependent student is enrolled at least half time and for an additional six months after the student ceases to be enrolled at least half time. Parent borrowers can also select the deferment option during the online application; however, this may not automatically defer the payments. 

Disclosure Statements

Sample disclosures for PLUS loans:

• Plain Language Disclosure for PLUS Loan
• PLUS Loan Borrower's Rights and Responsibilities
• PLUS Loan Disclosure Statement

ATTN: Due to the processing time, loan requests cannot be honored during the last two weeks of the semester. Please submit any requests for alternative or direct loans to the DCC Financial Aid Office before the last two weeks of the semester.

Federal Perkins-No Longer Available

Alternative Educational Loans (aka Private Loans)

Alternative educational loans are unsubsidized private loans available from lenders.  DCC recommends that if you need to borrow money to help pay for school, take out federal student loans from FAFSA first. Only take out alternative education loans after exhausting all your FAFSA eligibility. More information can be obtained in the Office of Financial Aid & Scholarships or through participating lenders. Upon the request of the alternative loan borrower, DCC Financial Aid Office will provide a Self-Certification Form.

Cohort Default Rate:

The cohort default rate is calculated using actual payment records of the student borrower. A 3-year cohort default rate is the percentage of a school’s borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meets other specified conditions prior to the end of the second following fiscal year. Repayment begins 6 months after a student is no longer enrolled for at least 6 credit hours. Default occurs when a student is in repayment but fails to make their payment for 270 days or more. Data from the most recent years is provided below. The numbers below represent the 3-year cohort default rate.

Academic Year Cohort Default Rate

2019–20 (FY20)              0.0%

2018–19 (FY19)              1.2%

2017–18 (FY18)              7.7%

More information is available on the National Student Loan Data System website.