FEDERAL DIRECT STUDENT LOANS
Direct Loans (DL) are low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (the Department), though the entity you deal with, your loan servicer, can be a private business.
Loans are legal obligations, so before you take out a student loan, think about the amount you’ll have to repay over the years. A loan calculator may help you to plan for your loan repayment.
TYPES OF LOANS
(DL) Subsidized Stafford Loan
The Subsidized Stafford Loan is awarded to undergraduate and graduate students on the basis of financial need determined by the Free Application for Federal Student Aid (FAFSA). The federal government provides the funds for this loan. The federal government pays the interest on this loan until you begin repayment. Repayment of this loan will begin six months after you graduate, leave school, or drop below half-time enrollment (6 hours).
(DL) Unsubsidized Stafford Loan
The Unsubsidized Stafford Loan Program was created by the government to assure that all students, regardless of their income, would be able to obtain a student loan. The federal government does not pay the interest while you are in school. Interest will be charged from the time the loan is disbursed until it is repaid in full. If you decide to capitalize or defer the interest, it will be added to the principle amount of your loan and this will increase the amount you have to repay. If you choose the option of paying the interest as it accumulates, then you will pay less in the long run. Repayment of the interest and principle will begin six months after you graduate, leave school, or drop below half-time enrollment (6 hours).
(DL) Parent (PLUS) Loans
The purpose of the Parent Plus Loan is to assist parents by providing a source of loan funds to help pay the cost of education for dependent undergraduate students. Parents may borrow up to the full cost of attendance less any other financial assistance the student receives. Parents must be able to pass a credit check or obtain a 'co-signer' who is able to pass the credit check. Both the parent and student must meet general eligibility requirements for federal financial assistance. Students must be enrolled at least 6 hours each semester to be eligible.
With Direct Loans, you:
- Borrow directly from the federal government and have a single contact—your loan servicer—for everything related to repayment, even if you receive Direct Loans at different schools.
- Have online access to your Direct Loan account information via your servicer's website.
- Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change. - Detailed explanation at https://studentaid.ed.gov/sa/repay-loans/understand/plans
FEDERAL DIRECT LOAN (DL) ELIGIBILITY REQUIREMENTS
• Student must have a completed Financial Aid file.
• Student must meet Satisfactory Academic Progress as set by the Financial Aid Office.
• Student must be enrolled at least half time for the semester/term in which aid is received.
• Student must not be in default on a federal student loan or owe a refund to the Department of
• Student must be a citizen or eligible non-citizen.
• If in active bankruptcy, the student must not have defaulted on a federal student loan at the time the
bankruptcy is filed.
MAXIMUM STUDENT LOAN ELIGIBILITY
• 1st Year (less than 34 completed hours)
Dependent Undergraduate Student = $5,500 (No more than $3,500 of this amount may be in subsidized loans)
Independent Undergraduate Student = $9,500 (No more than $3,500 of this amount may be in subsidized loans)
• 2nd Year (more than 33 completed hours in a two year program)
Dependent Undergraduate Student = $6,500 (No more than $4,500 of this amount may be in subsidized loans)
Independent Undergraduate Student = $10,500 (No more than $4,500 of this amount may be in subsidized loans)
Note: Dependent students whose parents are denied a PLUS loan may be eligible for up to an additional $4,000 after proof of the denial has been received.
FURHTER DETAILED INFORMATION ON THE WILLIAM D. FORD DIRECT LOAN PROGRAM IS AVAILABLE ON THE DIRECT LOAN WEBSITE AT https://studentaid.ed.gov/sa/ – THIS IS A COMPREHENSIVE WEBSITE MAINTAINED BY THE DEPARTMENT OF EDUCATION COVERING ALL ASPECTS OF THE LOAN PROGRAM.
Any Direct Student loan awarded will be submitted to the National Student Loan Data System (NSLDS), and will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.
FEDERAL DIRECT LOAN (DL) APPLICATION PROCESS
Students meeting eligibility requirements may go online to MyCardinalConnect and request a loan.
A parent of a dependent undergraduate student who is enrolled at least half-time (6 credits) may be able to borrow a Parent PLUS Loan (Parent Loan for Undergraduate Students) through the DL (Direct Loan) program to help pay for educational expenses while attending Trinity Valley Community College. The Parent PLUS Loan is based on credit and usually requires that the parent begin repayment 60 days after the last disbursement is received.
NOTE: TO RETRIEVE YOUR FSA ID, PLEASE GO TO: https://studentaid.ed.gov/sa/fafsa/filling-out/fsaid#forgot
- Request loan on MyCardinalConnect
- Complete online loan entrance counseling and E-Sign Direct Loan Master Promissory Note (MPN) at: https://studentloans.gov/myDirectLoan/index.action using your FSA ID. The Direct Loan MPN is valid for a period of 10 years for Federal Direct (DL) Stafford Loans at educational institutions participating in the Federal Direct Loan Program.
- As of March 29, 2015, parents that are requesting a Parent PLUS loan are required to complete PLUS counseling and sign a PLUS Master Promissory Note in addition to the above requirements. PLUS Counseling is available at www.studentloans.gov. If issues arise while completing your Parent PLUS loan application online, you can reach Applicant Services at 1-800-557-7394.
LOAN DELIVERY PROCEDURES
Loan funds are released according to borrower status and the receipt of loan funds. Loan funds are disbursed in two installments: usually early in the fall and early in the spring. If a student is awarded a loan that covers both fall and spring semesters, funds will be split evenly between semesters. If a loan is awarded for a single semester, funds will be disbursed in two installments as well: approximately ½ of the funds will be delivered early in the semester, the other midway through the semester.
If a loan has been awarded and funds are received during registration, those funds should be available at registration to be charged against for tuition, fees, books, room and board, if applicable. Remaining funds will be available about 4-5 weeks after the 1st class day of the semester.
1st time student:
A 1st time student's loan funds will be received, released and/or delivered no earlier than 30 days after the first official class day. Delivery includes crediting proceeds to the student’s account as well as delivering proceeds directly to the student. Therefore, loan funds for a 1st time student will not be available to use for registration expenses. If a loan has been awarded and proof that the MPN has been signed and Entrance Counseling is completed is received by the financial aid office by registration, a temporary loan MAY be available to use for tuition/fees and books to charge registration expenses. Contact the Financial Aid Office for more information.
OTHER LOAN INFORMATION
Direct Loan Interest Rate
Direct Loans have a fixed interest rate that differs depending on the loan type and other factors. Check with the TVCC Financial Aid Office or the Direct Loan Servicing Center for details and current interest rate information.
New Students and Entrance Loan Counseling
Student aid regulations require the school to conduct entrance loan counseling for all new borrowers before issuing the first disbursement. You can complete entrance counseling by going to www.studentloans.gov. You are strongly encouraged to complete the Financial Awareness Component as well. If you're a first-time undergraduate student, your first disbursement cannot take place until 30 days after the first day of your enrollment period begins (see loan disbursement schedule).
Please Note: First-time students will not receive the loans in time to pay for tuition or books. A student who does not have enough grant or scholarship money to cover tuition will need to make alternative payment arrangements with the Financial Aid Office for a temporary loan until their Direct Loan funds can be disbursed.
Federal regulations also require that all students who receive a Federal Direct Loan (DL) must complete exit counseling prior to graduation or dropping below half-time attendance. You will not be able to get a copy of your college transcript until you have completed this important step.
Spring Loans and Withdrawal from Trinity Valley Community College
If you withdrew from TVCC in the fall semester, and are returning for the spring semester, please be aware that your spring loans, if you were eligible, were cancelled when you withdrew. You will need to contact us.
Eligibility for a summer loan depends on your grade level, degree plan, and amount of loans you have already borrowed for the academic year.
The lender will hold out an origination fee (Fiscal Year 16 is 1.068%) from your loan disbursement. This fee is charged by the federal government for processing the loan.
Deferments, Forbearance, and Consolidation
You are entitled to defer your student loan payments when applicable criteria are met. Through deferment you can postpone your scheduled student loan payments for various reasons, such as unemployment, economic hardship, and school enrollment. Your loan servicer determines if you meet the requirements for a deferment.
Forbearance is an option servicers can offer in which the government permits the borrower to temporarily cease payments, allows an extension of time for making payments, or temporarily accepts smaller payments than were previously scheduled. Medical or financial problems that do not meet the requirements for a deferment might qualify you for a forbearance. During a forbearance period, the borrower is responsible for paying the interest that accrues on any loan, even a subsidized loan. If a borrower fails to make required interest payments during a forbearance period, the servicer may capitalize the unpaid accrued interest.
The servicer may grant a discretionary forbearance to assist a borrower or endorser in fulfilling the repayment obligations of the loan and to help prevent default. A borrower may request this forbearance by contacting the servicer verbally or in writing. Contact your servicer to obtain forbearance forms. Remember that the servicer must approve the forbearance request before your payments can be suspended.
By consolidating your loans, you might be able to reduce your monthly payments. Your servicer can help you decide if you are eligible and if loan consolidation is the best option for you.
Loan Default and its Consequences
Default occurs when a student fails to make monthly payments for 270 days during a period of repayment, and the servicer concludes that the student no longer intends to honor the obligation. The servicer may declare the student’s entire unpaid principal and interest due and payable. Should you default on an education loan:
- Your default will be reported to a credit bureau. This will affect your future ability to borrow.
- Your servicer may institute legal action to force you to repay your loan.
- You will not be able to register for classes.
- You will not be eligible to receive financial assistance from any Title IV Programs (including Federal Pell Grant, Federal SEOG, Federal Work-Study, Federal Perkins Loan, Federal Stafford Loan, Federal PLUS loan, and Federal Direct Stafford Loan) and state programs.
- Your eligibility for repayment options and benefits such as deferment and/or interest benefits will no longer be available to you.
- Your state and/or federal income tax refunds will be withheld.
- Your wages will be garnished.
- You will be liable for all costs associated with the collection of the loan.
Second Chance for Defaulted Loans
For students who have defaulted on their student loans, there may be a second chance to receive Title IV financial aid. The 1992 Reauthorization Act made provisions for students who make satisfactory payments on their defaulted student loans to participate in the Loan Rehabilitation Program. The student must contact the servicer that is currently holding the loan and make satisfactory payments for a period determined by the servicer (usually 6–12 months). After the borrower has completed this payment schedule, he or she may again be eligible for financial aid. While at TVCC, all inquiries about the Loan Rehabilitation Program should be made to your servicer.
LOANS CONTACT INFORMATION
General information about student aid and applying for student aid:
Federal Student Aid Information Center
Student Aid on the Web
For information about the Federal Direct Loan (DL) Program:
Federal Student Aid Info Center
Federal Student Loan Ombudsman Group:
PO Box 1843
Monticello KY 42633
Trinity Valley Community College Financial Aid Office:
100 Cardinal Drive
Athens, TX 75751