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?
- Provides information and terms to assist you in making right choices.
- Helps you understand your rights and responsibilities.
- Assist you in developing and sticking to a budget while you’re in school and help minimize the amount you need to borrow.
- 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 Management Policy & Policy Review
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 instructor’s 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.
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.
Federal 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.
· Lenders perform a credit check. Loans are available to parents with no adverse credit history.
· If a lender denies a loan due to the parent’s negative credit history, the dependent student may then apply for the independent Additional Unsubsidized Stafford Loan.
Maximum Annual Amounts:
· Up to the total Cost of Attendance but the loan amount cannot exceed the Cost of Attendance.
· Calculation: Cost of Attendance minus Financial Aid (including all Stafford loans) and scholarships = Loan Amount. Loan amount cannot exceed the annual loan limit or the unmet need, whichever is less.
Interest/Repayment:
· Repayment begins within 30 days after the loan has been fully disbursed.
· A loan origination fee and an insurance premium are charged.
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)
The policy of the school you attend, especially at the community college level, may affect aggregate loan amounts.