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: StudentLoans.gov, StudentAid.ed.gov and/or Federal Student Aid login.
Federal Direct Subsidized
Federal Direct Subsidized Loans are loans available to students with financial need based on the EFC 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.
• Subsidized Loans originated on or after Oct 1, 2018 the interest rate will be 5.045%.
• Unsubsidized Loans originated on or after Oct 1, 2018 the interest rate is 5.045%.
• Origination and default fees may be charged up to 1.062% of the loan amount and are taken up front.
• 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.
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 Direct Parent Loan for Undergraduate Students (PLUS)
This loan is not automatically awarded; therefore, the parent must contact the Financial Aid Office should they be interested.
Federal Graduate PLUS Loans are unsubsidized loans made to graduate students. The maximum PLUS Loan amount that a graduate student can borrow is the student’s cost of attendance minus other financial aid received. Interest rates for these loans vary each aid year, please contact the Office of Financial Aid and Scholarships to get the current year’s rate. Repayment of a PLUS loan for graduate students begins on the date of the last disbursement.
To apply for a Federal Direct Graduate PLUS Loan the following steps need to be taken:
1.The student must be admitted as a degree-seeking student at DCC
2.The student must complete a Free Application for Federal Student Aid (FAFSA) and be eligible to receive Federal student aid.
3.Must be enrolled in at least 6 graduate level credits per semester to be eligible.
4.The student must accept the Graduate PLUS Loan via the DCC Office of Financial Aid & Scholarships, either through their myInfo secure login or in writing.
First time Direct Graduate PLUS Loan borrowers must complete:
Loan Entrance Counseling.
A Federal Direct Graduate PLUS Loan Master Promissory Note (MPN) must be on file with the Department of Education.
To complete a Direct PLUS MPN, go online and sign in using your Federal FSAID, select “Complete MPN” and “Graduate PLUS.” NOTE: If the student is using an endorser on their loan a new MPN is required each year.
Complete Graduate PLUS Loan Application each year. This can be completed online by logging into studentloans.gov using your FSAID and selecting the “Request PLUS Loan” link.
More information about the Federal Direct Graduate PLUS Loan online.
Federal Perkins-No Longer Available
Federal Perkins loans are available for early filers (by December 1st) who demonstrate financial need as calculated by the Federal Processor. Perkins loans are the most attractive of the loans, having a smaller interest rate and longer grace period (nine months), in comparison to other loans. The college is the lender, and the government pays the interest on these loans while the student is in school and during the grace period. Because it is a limited fund, it is awarded on a first-come, first-served basis until the fund is exhausted. The current interest rate on the Perkins Loan is 5%.
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.