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. Note: You are not eligible for financial aid, and your file will not be processed, while you do not meet Satisfactory Academic Progress standards.

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)
Junior/Senior 60 or more credits $5,500 $7,000 ($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.)

See Also: U.S. Department of Education Federal Student Aid FAQ

Piggy Bank with Calculator Image

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

All Federal Direct Loans are assessed a loan fee by the federal government. This fee helps reduce the cost of making these low-interest loans. The federal government will deduct the fee from the loan before the borrower receives any loan money; therefore, the loan funds received by the borrower may be less than the amount they borrow and repay. Loan fees are adjusted periodically by the Department of Education.

Loan interest rates are also determined by the federal government and adjusted periodically. Visit the Department of Education's Federal Student Aid website for current information on fees and interest.

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.

Loan Disbursement

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 Accounting Services 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, $300 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.

Steps to Apply for a Federal Direct Stafford Loan

Are you a first time borrower or have you borrowed previously?

I Am a First Time Borrower:

  1. Complete and submit the Free Application for Federal Student Aid (FAFSA) to the federal processor.
  2. Complete your TMCC financial aid file and declare a major course of study.
  3. You must sign up for and attend an in-person Entrance Counseling Session before your loan will be processed.
    Contact Financial Literacy and Money Education by Students (FLAMES) for information on dates, times and locations. Space fills fast, please plan ahead and call early.
    During the session you will:

I Have Borrowed Previously:

Important Notice
TMCC is participating in a Loan Counseling Experiment under the U.S. Dept. of Education’s Experimental Sites Initiative (ESI). Under this experiment, half of all borrowers receiving a subsequent loan will be required to complete additional loan counseling. This counseling will be required annually as the student continues enrollment at TMCC. For those borrowers, loans will not be disbursed until all steps are completed.
  1. You should have already completed your Free Application for Federal Student Aid (FAFSA).
  2. You should have already completed your TMCC financial aid file and declared a major course of study.
  3. You should have enrolled in 6 financial aid eligible credits.
  4. You must complete the Student Loan Request Form and submit it online, along with a printout of your loan history, found at National Student Loan Data System (NSLDS). You may attach this to your online request or turn in a paper copy to TMCC's Financial Aid Office.
    The NSLDS website is where the Dept. of Education reports your loan history and your loan servicer's contact information. You should be familiar with this website and aware of your loan indebtedness.
  5. Only if you have been selected for participation in the Loan Counseling Experiment (Check Your MyTMCC To Do List):
    • You must sign up for and attend a Subsequent Borrower Loan Counseling session. Contact TMCC Financial Literacy and Money Education by Students (FLAMES) Program for information on dates, times and locations.
    • You must meet with a TMCC Academic Advisor to ensure that you are on track to the completion of your chosen degree. When complete, submit your referral slip or other verification of your meeting to TMCC's Financial Aid Office.

Exit Counseling

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.

PLUS loan fees and interest rates are adjusted periodically by the federal government. The most current information on interest rates and fees are available on the Department of Education's Federal Student Aid website.

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.

Proof of denial of a parent loan will allow a dependent student to apply for additional unsubsidized Stafford Loan funding.

Emergency Loan

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 $300. This loan must be repaid within 30 days and requires a $1 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: College Student Loan Code of Conduct