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Loans 

By completing a financial aid application, you will be considered for the Federal Direct Stafford Loan Program. There are two types of Federal Direct Stafford Loans.  The Federal Direct Subsidized Loan, and the Federal Direct Unsubsidized Loan.

Federal Subsidized Direct Loan: Your eligibility for the Direct Subsidized is based on your financial need and your undergraduate academic level. Repayment is deferred until six months after you graduate or cease to be enrolled at least half-time, and the government pays the interest while you are enrolled in school. Subsidized Federal Direct Loan maximums vary according to academic level and dependency status. In addition, there are lifetime loan limits.

Federal Unsubsidized Direct Loan: Your eligibility for the Federal Direct Unsubsidized Loan is not based on financial need. You may borrow the cost of education minus all other financial aid you receive, up to the Direct Loan maximum for your academic level. The interest on the Unsubsidized Direct Loan accrues from the date of disbursement. You have two choices for paying interest: you may pay it while you are enrolled full time, or it can accrue and become part of the principal that you will owe. You begin making payments six months after you graduate or cease to be enrolled at least half time.

»Loan Requirements

If you are a first-time Federal Direct Stafford Loan borrower, you must complete an electronic Master Promissory Note (eMPN) and complete electronic Loan Entrance Counseling before you can receive funds.

»Interest Rates and Origination Fees

NEW Direct Loan Interest Rates were signed into law on Friday, August 9, 2013.

The following table provides interest rates for each type of federal student loan.

Loan Interest Rates by Disbursement Dates

Loan Type

First Disbursed between July 1, 2013 and June 30, 2014

Direct Subsidized Loans (Undergraduate Students)

Fixed at 3.86%

Direct Unsubsidized Loans (Undergraduate Students)

Fixed at 3.86%

Direct PLUS Loans (Parents and Graduate or Professional Students)

Fixed at 6.41%

For more information on Direct Loan interest rates and origination fees, please refer to studentaid.ed.gov.

»Time Limit to Receive Subsidized Loans

If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. This time limit does not apply to Direct Unsubsidized Loans or Direct PLUS Loans. If this limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your program. This is called your “maximum eligibility period.” Your maximum eligibility period is based on the published length of your current program. You can find the published length of your program of study in the FVTC school catalog.

For example, if you are enrolled in a two-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is three years (150 percent of 2 years = 3 years).  Because your maximum eligibility period is based on the length of your current program of study, your maximum eligibility period can change if you change to a program that has a different length. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count toward your new maximum eligibility period.

»Dependency Status

Dependency is not based on age of the student, but on a series of questions that the student answers on the Free Application for Federal Student Aid (FAFSA). Dependent students must provide both student and parent information on the FAFSA.

»Loan Maximums

Maximum Federal Direct Stafford Loan amounts available vary according to academic level and dependency status. Please see the tables below for more information.

Dependent Undergraduate Students

Academic LevelMaximum Federal Direct Stafford Loan AmountAdditional Unsubsidized AmountAnnual maximum amounts a dependent undergraduate may borrow in combined Subsidized and Unsubsidized Direct Stafford Loan
Freshman$3,500$2,000$5,500
Sophomore$4,500$2,000$6,500

Independent Undergraduate Students

Academic LevelMaximum Federal Direct Subsidized AmountUnsubsidized AmountAnnual maximum amounts an independent undergraduate may borrow in combined Subsidized and Unsubsidized Direct Stafford Loan
Freshman$3,500$6,000$9,500
Sophomore$4,500$6,000$10,500

»Lifetime (Aggregate) Loan Limits

There is a maximum lifetime limit that a student can borrow in Direct federal student loans. This is called the Aggregate Loan Limit. Once a student reaches these loan limits, he/she cannot borrow Direct federal student loans until the loans are paid down. See chart below for the undergraduate lifetime limits.

Dependent$31,000 - No more than $23,000 of this amount may be in subsidized loans.
Independent$57,500 for undergraduates - No more than $23,000 of this amount may be in subsidized loans.

»Requesting Additional Loans

An INDEPENDENT student may request additional loan funds by filling out the Additional Loan Request available on the Financial Aid Forms page.  If you request more than your eligibility allows, the loan will be certified to your maximum eligibility.

»Loan Repayment

The Direct Loan Program offers loan repayment plans designed to meet the needs of borrowers. Direct Loans are funded by the U.S. Department of Education through your school and are managed by a loan servicer, under the supervision of the Department. The Direct Loan Program allows you to choose your repayment plan and to switch your plan if your needs change.

To find out more about repayment options before receiving a Direct Loan, borrowers may contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). If you currently have a Direct Loan and would like the exact payment amount on your loan, you can find it out by contacting your loan servicer.

Parent Direct PLUS Loan borrowers may only choose from several repayment options, but may also choose the income contingent repayment plan or the income-based repayment plan.

Visit the National Student Loan Data System (NSLDS®) to view information about all of the federal student loans you have received and to find contact information for the loan servicer or lender for your loans.

You will need your Federal Student Aid PIN to access your information.

»Direct Stafford Loan Exit Counseling

If you borrowed a Direct Stafford Loan and are graduating or leaving FVTC, you are required to complete the Direct Loan Exit Counseling Session. During the exit counseling session, you will review your rights and responsibilities as a borrower.

»Federal Direct PLUS Loan (Parent Loan)

The PLUS Loan is a federal loan program for parents of dependent undergraduate students. Generally, parents are eligible if they have a good credit history, are not in default on a federal student loan, and meet the other eligibility requirements outlined in the loan application. Parents may borrow up to the amount of the cost of education minus other financial aid received, including any other educational loans. The interest rate is fixed at 6.41%. In addition, the borrower is charged an origination fee of 4.204% and this amount is deducted from the loan before disbursement.

Your PLUS loan enters repayment once your loan is fully disbursed (paid out).  The parent borrower may contact the loan servicer to request deferment while your child is enrolled at least half-time for an additional six months after your child ceases to enrolled at least half-time.

If your loan is deferred, interest will accrue on the loan during the deferment.  You may choose to pay the accrued interest or allow the interest to capitalize when the deferment period ends.  Your loan servicer will notify you when your first payment is due.

To ensure that your PLUS loan is processed in a timely manner, you will need to print and complete the PLUS Loan Request form (submit to FVTC Financial Aid Office), the Online PLUS Loan Application, AND the Master Promissory Note (MPN) as follows:

»Private Loans

Private loans are non-federal educational loans. These loans are typically offered by private lenders to assist with educational and living expenses not covered by other financial aid. In general, you may borrow up to the cost of education minus all other financial aid you receive.
Your eligibility for a private loan is determined by the difference between your total Cost of Attendance (COA) and any other financial aid.

For many students and parents, private loans represent an important resource to help finance educational expenses. Private loans can help fill the gap between need-based financial aid and your total educational costs.
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   Maintained by:

   Stacy Doran

   Last Modified:
   11/1/2013 10:28:18 AM