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Federal Direct Stafford Loans
Direct Loans are low-interest loans for students to help pay for the cost of a student's education. The lender is the U.S. Department of Education rather than a bank or other financial institution. With Direct Loans, you borrow directly from the federal government and have a single contact – the Direct Loan Servicing Center – for everything related to the repayment of your loans, even if you receive Direct Loans at different schools.
Types of Direct Stafford Loans
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Subsidized Loan: This type of loan is based on financial need. While the borrower remains in school, the interest on the loan is paid by the federal government. The interest rate for a subsidized loan for the 2011-2012 academic year at Highland Community College is fixed at 3.4% for undergraduate students. The financial aid office will do a calculation to determine whether or not a student is eligible to receive a subsidized loan once the student has completed the loan application process.
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Unsubsidized Loan : This loan is not based on financial need. Interest accrues from the date of disbursement until the final payment. The borrower can choose to pay the interest monthly or quarterly while in school and during the grace period or can have the interest capitalized and added to the principal amount of the loan. The interest rate for an unsubsidized loan for the 2011-2012 academic year at Highland Community College is fixed at 6.8% for undergraduate students.
Repayment
- Repayment begins 6 months after graduating, dropping below half-time, or withdrawing from your academic program.
- The Standard Repayment Plan is 10 years.
- There are other payment options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period.
- If you have multiple federal education loans, you can consolidate them into a single Direct Consolidation Loan.
- There is a .25% interest rate reduction for auto debit.
Fees
By law, the total origination fee is 1.0%. However, The Department of Education provides an up-front interest rebate. For the 2011-2012 academic year, the interest rebate will be 0.5%. Students retain the up-front rebate, if during the required period of the loan, the first 12 payments are made on time. The up-front rebate will be added to the outstanding principle balance of the loan, if the student fails to meet the timely repayment requirement.
Application Process
Students must be enrolled at least half-time (6 credits for fall and spring semesters), in a financial aid eligible degree program and in 'good standing' according to the Standards of Academic Progress at Highland. Students on Financial Aid Termination are not eligible for a student loan.
- Check with Highland's financial aid office 815.599.3519 to see what other forms and documents you may need to complete in order to finish your financial aid file.
- Complete the Loan Entrance Counseling online. ALL borrowers, both returning and new borrowers, must complete this online counseling.
- Complete the Master Promissory Note online. ALL borrowers, both returning and new borrowers, must complete this online MPN.
- If you are a returning student who has taken out a loan while at Highland Community College within the last two years you may turn in your Stafford Request Form to the Financial Aid Office once all of the preceding steps have been completed.
- If it is your first time borrowing at Highland Community College you MUST make an appointment with the Loan Advisor at 815.599.3519. We will answer questions and determine eligibility at that time.
More Information
- General information regarding Direct Student Loans
www.direct.ed.gov/student.html
- Managing Loan Entrance Counseling and Master Promissory Note www.studentloans.gov
- Access to your Direct Loan account information
www.myedaccount.com or 1.800.848.0979
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