Types of Financial Aid – Loans
Federal Direct Stafford Loans (Subsidized and Unsubsidized)
These are low-interest, need-based and non-need based loans provided by the federal government to help eligible students with school related expenses. You must be enrolled in six eligible credits to qualify for a student loan. Repayment begins six months after the student graduates, leaves school or drops below half-time status (six credits).
- The subsidized portion is need based. The federal government pays the interest on this portion while the student is enrolled in at least six credits and during any authorized deferment periods.
- The unsubsidized portion is non-need based. Interest begins to accrue from the date the loan is disbursed. The student is responsible for this amount and may pay this interest as it accrues. If not paid, the accumulated interest will capitalize when the loan goes into repayment. This adds to the expense of the loan.
Annual loan limits are regulated by the government and are as follows:
|Class Standing||Credits Earned||Base Eligibility||Additional Unsubsidized Eligibility|
|Freshman||0-29 credits||$3,500||$6,000 ($2,000 Dependent Students)|
|Sophomore||30 or more credits||$4,500||$6,000 ($2,000 Dependent Students)|
Aggregate Loan Amounts
Aggregate loan amounts are set by the federal government. Undergraduate levels are as follows:
|Dependent Students||$31,000 (of which no more than $23,000 can be subsidized)|
|Independent Students||$57,500 (of which no more than $23,000 can be subsidized)|
(These aggregates are based on a four-year degree. Community college students should not exceed half of these levels.)
The National Student Loan Data System (NSLDS)
The Department of Education maintains a record of your loans on the NSLDS website. You can access this information with your personal data and your FAFSA PIN.
Loan Fees and Interest Costs for 2012-2013
Fees for the 2012-2013 academic year are set at 1%. The interest rate on this year's loans is fixed at 3.4% for the subsidized portion and 6.8% for the unsubsidized portion of the loan. Estimate your student loan payment.
Special Instructions for Loans
Loan processing continues throughout the academic year, but ceases two weeks prior to the end of each semester. The processing time for a loan can be up to 15 business days, so please allow for that. You can check for a disbursement by selecting "Account Activity" from the drop-down box in the Finances section of your Student Center. Remember that this is money that you have to repay, so it is best to be conservative in your borrowing.
Loans are disbursed in two equal payments, usually one in the fall and one in the spring. When loans are disbursed, the Financial Aid Office deposits the funds into your TMCC student account. Any outstanding tuition and fees are paid and then the Controller's Office issues the remaining funds to you by either mailing a check or by direct deposit to your personal account if you have set this up. Federal regulations allow for a 10 day period for this process to be completed but 3-7 business days is the norm. Disbursement begins 10 days prior to the first day of class but continues throughout the year on a weekly basis. Loans for just one semester will also be disbursed in two equal payments, one 10 days prior to the start of the semester and the second midway through the semester. Freshman first time borrowers have a mandatory 30 day delay on the first disbursement of their loans. Classes will be held for those students and they should begin attendance as usual. Additionally, $200 Emergency book loans will be available for those students should they need help with book costs. Applications will first be accepted the Wednesday before classes start with the earliest checks available the first Monday of classes. Apply in the Financial Aid Office.
Applying for a Federal Direct Stafford Loan
- Complete and submit the Free Application for Federal Student Aid (FAFSA) to the federal processor.
- Complete your TMCC financial aid file and declare a major course of study.
- Complete the Student Loan Request and submit to the financial aid office.
- Go to www.nslds.ed.gov and print out your loan history; submit this copy with your Loan Request Form.
- If your loan balance exceeds $15,000, you must complete these three Life Skills Modules for Student Loan Borrowers:
- 101 – How Will I pay for My Higher Education?
- 203 – How Do I Live on a Budget While I'm in School?
- 103 – What Do I Need to Know About Repaying My Student Loans?
- If your loan balance exceeds $20,000 you must complete the above steps and two additional Life Skills Modules:
- 305 – How Do I Live on a Budget After I Have Completed School?
- 104 – What If I Have Trouble Repaying My Student Loans?
You must also meet with a Financial Aid Adviser to submit your forms.
- Complete a one-time Promissory Note on the Federal Direct Loan website (https://studentloans.gov.) Sign your note using your FAFSA PIN.
- Complete ENTRANCE COUNSELING annually at https://studentloans.gov.
The federal government requires that student borrowers complete exit counseling in their final semester of school. Online counseling is available.
Federal Direct PLUS Loan
The PLUS is a non-need loan for the parent of a dependent student. Approval is based upon creditworthiness. The interest rate for the 2012-2013 academic year is fixed at 7.9%. The loan origination fee is 4%. Repayment on a PLUS loan generally begins 60 days after the second disbursement of the loan but the borrower may qualify to defer payments. Parents must complete the PLUS (Parent) Loan Request and submit this to the TMCC Financial Aid Office. Additionally, they must apply online at https://studentloans.gov. Proof of denial of a parent loan will allow a dependent student to apply for additional unsubsidized Stafford Loan funding.
Federal Perkins Loan
The Perkins Loan is a long-term, low-interest (5%) loan. Repayment begins nine months after the student graduates, leaves school or drops below six credits. The school is responsible for awarding these loans and determining loan amounts. Priority is given to students having exceptional need and the least ability to contribute to their own educational costs. The maximum eligibility is $4000 annually not to exceed $20,000. Funding for this loan program is extremely limited.
Any TMCC student who is enrolled at least half-time (six credits) whose fees have been paid or deferred, and has a bona fide emergency during the school term related to educational expenses, may apply for a loan of a maximum of $200. This loan must be repaid within 30 days and requires a $1.00 processing fee. Students may receive no more than one loan per semester. A late repayment on an emergency loan will make the student ineligible for subsequent e-loans.
See Also: View additional videos about loans.
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