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Student Loans

 Direct Loan Workshops - Fall 2012

Students can sign up for workshops in the Financial Aid Office, E-104 beginning August 20th. 

Click here for workshop dates.

 

 

Santiago Canyon College - Direct Loan Program

The William D. Ford Direct Loan Program

How to Apply for an Educational Direct Loan

Online Student Direct Loan Entrance & Exit Counseling and MPN

Default Management Policy & Policy Review

What is the Difference between a Subsidized and Unsubsidized Loan?

Subsidized Direct Loan

Unsubsidized Direct Loan

Additional Unsubsidized Direct Loan – Independent Students Only

Additional Unsubsidized Direct Loan – Dependent Students Only

Federal Plus Loan – For Parents of Dependent Students

Aggregate Loan Amounts

Forbearance

Deferment

 

 

 William D. Ford

The Direct Loan Program is considered to be a federal entitlement program. This means that funding is available through the entire year to as many eligible students as wish to apply. SCC does not offer loans in the summer.

Direct Loans are a serious obligation and need to be repaid. Thus, students are encouraged to borrow wisely and to borrow only the amount that is needed to meet their current educational costs. Direct Loans may be subsidized or unsubsidized. Subsidized loans are based on financial need and the federal government pays (subsidizes) the interest on the loan until six months after the borrower leaves school or ceases to be enrolled in 6 units.

Unsubsidized loans are available to those with or without documented financial need. The interest on an unsubsidized loan begins immediately. The interest can be paid quarterly or accrued and capitalized. Capitalization adds unpaid interest to the principal amount you borrowed. Unsubsidized loans are not recommended at SCC, unless the student has exceptional need.

The interest rate on Direct Subsidized Loans for undergraduate students is based on the first disbursement date as listed in the table below. The interest rate for Direct Unsubsidized Loans is fixed at 6.8%.

Direct Loans will be disbursed two times a semester. Typically, loans are disbursed half in the fall and half in the spring. First disbursements for new borrowers cannot be authorized until 30 days into the semester. Students must be actively attending a minimum of 6 units at RSCCD to receive a Direct Loan.
   

  How to Apply for an Educational Direct Loan: 

    1. Meet all qualifications for federal student aid. Complete a FAFSA Application online at www.fafsa.ed.gov.
    2. Turn in a completed Financial Aid packet and all required documents to the Financial Aid Office.
    3. Meet Satisfactory Academic Progress requirements.
    4. Receive a Financial Aid Award Letter for the current academic year.
    5. Be actively attending a minimum of 6 units at either SCC or SAC.
    6. Come to the Financial Aid Office (E-104) to pick up a Loan Packet and sign up to attend an Entrance Counseling Workshop. Read the complete loan packet before you attend the Workshop.
    7. At the time of origination, academic grade level will be determined according to units completed with our district. Academic transcripts from previously attended schools must be delivered and evaluated by the admissions office to change a grade level.
    8. Follow the disbursement calendar for all loan disbursements.

 Online Student Direct Loan Entrance & Exit Counseling and MPN   

Entrance and Exit Counseling is a federal requirement for all loan borrowers every academic year. The web site for Entrance and Exit counseling is www.studentloans.gov.

    • Entrance Counseling will take approximately 20-30 minutes
    • Exit Counseling will take approximately 30 – 40 minutes  

WHY IS COUNSELING IMPORTANT? 

  1. Provides information and terms to assist you in making right choices.
  2. Helps you understand your rights and responsibilities.
  3. Assist you in developing and sticking to a budget while you’re in school and help minimize the amount you need to borrow.
  4. Helps you in developing a future plan and to set up a monthly budget beginning with your expected annual income; refer to “Occupational Outlook Handbook” at: www.bls.gov/oco.

     

    Once you have completed the Entrance Counseling, attended a Loan Counseling Workshop, and your loan has been originated by the Financial Aid Office, you may complete your “Master Prom Note”; MPN at www.studentloans.gov.

    If you have any questions regarding this information please do not hesitate to contact the Financial Aid Office.

     Default  Prevention Management Policy 

    All Students who apply for a Federal Student Direct Loan through the financial aid program are subject to the Default Management Policy and Review. Students who do not meet the following are subject to the default management review process, where a Financial Aid Committee will determine further eligibility of the student’s participation in the loan program for the next academic term.

     Students who do not meet the Default Management Policy will have their file reviewed by a Financial Aid Review Committee and will be notified if they have maintained eligibility.

    In order to certify or re-certify a student’s second term’s loan eligibility and remain out of the Default Management Review process, the following must be maintained:

     

    ü  A student must have a cumulative G.P.A. of 2.0 or higher in order to receive their next term student loan check.

     

    ü  A student must have completed and received credit for 6 units or more in order to receive their next term student loan check.

     

    ü  A student may not have withdrawn or have any “drop” that would bring their active units under 6 units prior to the 60% attendance mark, per Department of Education requirements, in order to receive their 2nd term student loan check.

    ü  A student who was on probation during the initial enrollment period a loan was certified for, and does not academically improve, will enter into the Default Management Review. 

    Be Advised:

     All students who enter the Default Management Review may be required to:

     

    1)   Meet with a Financial Aid Analyst for loan counseling.

    2)   Have current instructors verify that the student is actively attending the classes the student is enrolled in.

    3)   The student’s academic school budget may be reviewed and modified if enrollment has changed per the Department of Education guidelines.

     As a default prevention initiative:

    • On case by Case basis the Financial Aid Office  reserves the right to delay any Student Loan Disbursement(s) for students with previous return to Title IV history.
    •  In simple terms, if a student completely withdrew after receiving a loan during any previous term with RSCCD. The disbursement (s) will be delayed until it’s determined by the FAO that the student is participating and making satisfactory academic progress in all classes.
    •  In the event that it’s determined a student is not making satisfactory academic progress the loan will be cancelled immediately and no disbursements will be made.

    The following circumstances may cause a student not to qualify to have a loan processed at SCC:

    1. Students who have borrowed a private loan at any level
    2. Students who have borrowed at a four year university
    3. Student loan borrowers that have borrowed at least half of the aggregate amount for Subsidized Stafford or Unsubsidized Stafford loans may be required to complete a loan appeal
    4. Students who have already obtained an AA or BA degree
    5. Students who have already obtained an AA or BA degree and now they are currently enrolled in a certificate program
    6. Students with over 90 units attempted transferred from another school that are  taking  additional units at SCC in order to transfer to a four year institution
    7. Students with previous loans that have been re-habilitated, previously defaulted and consolidated

    It is the policy of SCC to calculate maximum pell eligibility to determine loan amounts. 

     What is the Difference between a Subsidized and Unsubsidized Loan?

    Subsidized Stafford loans are need-based, and the government pays the interest on these loans while you are in school, during a six-month grace period immediately preceding repayment, and during authorized deferment. 

    Unsubsidized Stafford loans are not need-based, and you are responsible for all of the interest that accrues on the loan, including while you are in school.

    Subsidized Direct Loan:

          Eligibility:

    ·         Full-time or half-time undergraduate students (minimum enrollment of 6 units)

    ·         Dependent or Independent students

    ·         Need based loan

    Maximum Annual Loan Amounts:

    ·         Grade Level 1    = $3,500        (0-29 Units)     Freshmen

    ·         Grade Level 2    = $4,500        (30-70 Units)   Sophomores

    ·         Calculation: Cost of Attendance minus Expected Family Contribution minus  Financial Aid and scholarships = Unmet Need.  Loan amount cannot exceed the annual loan limit or the unmet need, whichever is less.

    ·         Maximum amounts for all loans being processed for only one semester of the academic year, will be prorated to 50%.

    Interest and Repayment:

    ·         There is no interest or principal payments on the Subsidized Stafford loan as long as you are actively enrolled in at least half-time status (6 units).

    ·         There is a six month grace period before repayment begins.

    Unsubsidized Direct Loan:

          Eligibility:

    ·         Full-time or half-time undergraduate students (minimum enrollment of 6 units)

    ·         Dependent or Independent students

    ·         Non-need based loan

    Maximum Annual Amounts:

    ·         Grade Level 1   = $3,500        (0-29 Units)     Freshmen

    ·         Grade Level 2   = $4,500        (30-70 Units)   Sophomores

    ·         Calculation: Cost of Attendance minus Financial Aid (including Subsidized Stafford loan), scholarships and Veterans Benefits = Loan Amount.  Loan amount cannot exceed the annual loan limit or the unmet need, whichever is less.

    ·         Maximum amounts for all loans being processed for only one semester of the academic year, will be prorated to 50%.

    Interest/Repayment:

    ·         There is a six month grace period before repayment begins on the principal.

    ·         Interest payments begin immediately.  The interest can be paid quarterly or accrued and capitalized.

    ·         Loan fees may be charged at the lenders discretion.

     Additional Unsubsidized Direct Loan – Independent Students Only:

      Eligibility:

    ·         Full-time or half-time undergraduate students (minimum enrollment of 6 units)

    ·         Independent students only

     

    Maximum Annual Amounts:

    ·         Grade Level 1 and 2 = $6,000           

    ·         Calculation: Cost of Attendance, minus financial aid (including all other Stafford loans), Veterans Benefits and scholarships = Loan Amount.  Loan amount cannot exceed the annual loan limit or the unmet need, whichever is less.

    ·         Maximum amounts for all loans being processed for only one semester of the academic year, will be prorated to 50%.

    Interest/Repayment:

    ·         Interest payments begin immediately. They may be paid quarterly or accrued and capitalized.

    ·         There is a six month grace period before repayment begins on the principal.

     

     Additional Unsubsidized Direct Loan – Dependent Students Only:

     Eligibility:

    ·         Full-time or half-time undergraduate students (minimum enrollment of 6 units)

    ·         Dependent students only

     

    Maximum Annual Amounts:

    ·         Grade Level 1 and 2 = $2,000

    ·         Calculation: Cost of Attendance, minus financial aid awards (including all other Stafford loans), and scholarships = Loan Amount.  Loan amount cannot exceed the annual loan limit or the unmet need, whichever is less.

    ·         Maximum amounts for all loans being processed for only one semester of the academic year, will be prorated to 50%.

     

    Interest/Repayment:

    ·         Interest payments begin immediately. They may be paid quarterly or accrued and capitalized.

    ·         There is a six month grace period before repayment begins on the principal.

    ·         Loan fees may be charged at the lenders discretion. 

     Direct PLUS Loan – For Parents of Dependent Students:

          Eligibility:

    ·         Full-time or half-time undergraduate students (minimum enrollment of 6 units).

    ·         The parent or step parent must be a citizen or an eligible non-citizen.

    ·         The Department of Education will perform a credit check. Loans are available to parents with no  adverse credit history.

    ·         If the Department of Education denies the parent loan, the dependent student may then apply for the independent Additional Unsubsidized Stafford Loan.

    Maximum Annual Amounts:

    ·         There are no set limits for Direct Plus Loans, but you may not borrow more than the cost of your child's education.

    ·         Calculation: Cost of Attendance minus Financial Aid (including all Stafford loans) and scholarships = Loan Amount.  

     

    Interest/Repayment:

    ·         Repayment begins within 60 days after the loan has been fully disbursed for this school year.

    ·         A loan origination fee is charged. 

    Step 1: Parent borrower and eligible SCC student must complete and submit a Santiago Canyon College PLUS Request form; obtained in the Financial Aid Office, E-104

    Step 2: The online application is found at www.studentloans.gov and must be completed by the parent borrower. You must complete a new Master Promissory Note (MPN) for the student enrolled at Santiago Canyon College; even if you have completed one for the same year for another student at another institution.

    Step 3: Once your loan has been made, you will be contacted by your loan servicer. You can check your loan servicers website for the most recent account information regarding your Direct Loans.

    Step 4: For info about all of your Direct Loans, visit the Department's National Student Loan Data Systems(NSLDS). You will need your Federal Student Aid PIN number to access NSLDS.

     Parent Plus Request Form

     Aggregate Loan Amounts:

    • Dependent Students: $31,000 (no more than $23,000 may be Subsidized)
    • Independent Students: $57,500 (no more than $23,000 may be Subsidized)  

     

     Forbearance:   

     

    Forbearance is an arrangement to postpone or reduce your monthly payment amount for a limited and specific period during which you are charged interest. If you indicate a temporary inability, but willingness to pay the loan(s), you may ask for or be offered a forbearance. For all Direct Loans, interest that accrues during forbearance is the responsibility of the borrower. When you re-enter repayment at the end of the forbearance period, any unpaid interest capitalizes (is added to the principal balance). Our online Interest Capitalization Estimator can provide you an estimate of how much interest might capitalize at the end of your forbearance. There are several forbearance types. You must apply and qualify for forbearance and the U.S. Department of Education must approve the request in order for forbearance to be in effect. If you are not eligible for forbearance you may still be eligible for a deferment.

     

    Click here for the forbearance request forms

     

      Deferment:

     

    A deferment is a temporary suspension of loan payments for specific situations such as reenrollment in school, unemployment, or economic hardship. For a list of deferments, click here. You don’t have to pay interest on the loan during deferment if you have a subsidized Direct or FFEL, Stafford Loan or a Federal Perkins Loan. If you have an unsubsidized Direct or FFEL Stafford Loan, you’re responsible for the interest during deferment. If you don’t pay the interest as it accrues (accumulates), it will be capitalized (added to the loan principal), and the amount you have to pay in the future will be higher. You have to apply for a deferment to your loan servicer (the organization that handles your loan), and you must continue to make payments until you’ve been notified your deferment has been granted. Otherwise, you could become delinquent or go into default.You must be enrolled at an eligible school at least as a half-time student.

    Click here for the deferment request forms