Loan

The Federal Family Education Loan Program contains three types of loans: Stafford Subsidized Loans, Stafford Unsubsidized Loans and Parent PLUS Loans. These loans are provided by private lenders and are guaranteed against default by the federal government. They must be repaid by the student or parent borrower. Any student attending TVCC on at least a half-time basis, with the exception of incarcerated students, are eligible to apply for a student loan.

Stafford Subsidized and Unsubsidized Loans – Stafford Loans are available to all students enrolled in at least 6 hours (half-time) during the Fall, Spring, and Mini Summer semesters or at least 3 hours (half-time) during the Summer I and Summer II semesters.

The interest rate is set annually on July 1^st and is capped at 8.25%. For loans disbursed on or after July 1, 2006, the interest rate will be fixed at 6.8%. All interest on the subsidized loan is paid by the government while the student borrower is in school on a half-time basis. The interest on the unsubsidized loan is accruing while the borrower is in school. The borrower can choose to pay interest payments while in school or you can allow the interest to accrue. This means that the interest will be “capitalized” or added to the loan later. If the interest accumulates, the total loan to repay will be higher than if the interest is paid month or quarterly.

Beginning July 1, 2008, the interest rate on certain new Stafford loans will be reduced from 6.8 percent to 3.4 percent over 4 years (the interest rate of a particular loan will depend on when it is first disbursed, as provided in the bullets below). It is important to note that these interest rate reductions are applicable only to undergraduate, subsidized Stafford loans; as a result, depending on the type of loan borrowed and the year in which the loan is borrowed, your students may have Stafford loans with a wide range of interest rates by the time they complete their education. The interest rate will be reduced as follows:

For loans first disbursed on or after July 1, 2008, and before July 1, 2009, the rate will be 6.0 percent.
For loans first disbursed on or after July 1, 2009, and before July 1, 2010, the rate will be 5.6 percent.
For loans first disbursed on or after July 1, 2010, and before July 1, 2011, the rate will be 4.5 percent.
For loans first disbursed on or after July 1, 2011, and before July 1, 2012, the rate will be 3.4 percent.
For loans first disbursed on or after July 1, 2012, the rate will revert back to 6.8 percent.

Repayment begins 6 months after the borrower graduates, withdraws or ceases half-time enrollment.

Annual Loan Limits beginning July 1, 2007 :

Dependent Student

Independent Student

1^st year

$3500

$7500 – no more than $3500 of this amount may be subsidized.

2^nd year

$4500

$8500 – no more than $4500 of this may be subsidized.

Parent PLUS Loan – Parent PLUS Loans are available to the parents of dependent students. Parent Borrowers may borrow up to the Cost of Education (COE) less any other aid the student receives. Parents must be able to pass a credit check and the student must be enrolled in at least 6 hours.

The interest rate is a variable rate set annually on July 1^st and is capped at 9%. Effective July 1, 2006, the interest rate will be fixed at 8.5%.

Repayment begins 60 days after the final disbursement.

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