Federal Direct Student Loans - About

Federal Stafford Loans 

   How to apply for a student loan
Click here for student loan application instructions
Due to the recent enactment of a new federal law, the Health Care and Education Reconciliation Act of 2010, all colleges and universities must participate in the William D. Ford Federal Direct Loan Program for new federal student loans.  In this program, students borrow directly from the federal government through Lorain County Community College.  This includes the:

  • Federal Subsidized Stafford Loan
  • Federal Unsubsidized Stafford Loan
  • Federal Parental Loan to Undergraduate Students (PLUS)

Unlike grants, student loans are not free. They are federally guaranteed loans that must be repaid. Repayment begins six months after the student graduates or stops going to school at least half-time (6 credit hours or more). The typical expense period for student loans is the first day of fall semester and the last day of spring semester (August through May). However, student loans may be processed for eligible semesters of enrollment of less than a full academic year including summer or on a borrower-based academic year. Pre-loan (entrance) counseling is conducted for all student loan applicants via https://studentloans.gov.  

Once a student graduates, leaves school or drops below half-time enrollment, mandatory exit loan counseling is required and provides information that explains student's loan repayment responsibilities and when repayment begins.  Exit Loan Counseling can be completed via http://studentloans.gov.

Federal Subsidized Stafford Loan

Subsidized means that interest (which accrues on a loan while a borrower is in school, grace, or authorized periods of deferment), is paid by the government. Students do not have to make principal or interest payments while enrolled in an eligible academic program for at least half time (six credit hours).  

Federal Unsubsidized Stafford Loan

Unsubsidized means that the borrower is fully responsible for paying the interest that accrues on the loan. Interest on an unsubsidized loan accrues from the date of disbursement and continues throughout the life of the loan. Students do not have to make principal payments but ARE responsible for accrued interest while enrolled in an eligible academic program for at least half-time (six credit hours). Interest payments may be deferred until the student is in repayment.   

Federal Parental Loan to Undergraduate Student (PLUS) Loan

Federal PLUS loans are unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods. 

Update on Federal Interest Rates for Federal Stafford Subsidized Loans, Stafford Unsubsidized Loans, and Direct PLUS Loans

Interest rates will be established each year for Federal Stafford Subsidized, Stafford Unsubsidized, and Direct PLUS loans for which the first disbursement is on or after July 1 through the following June 30. The rate will be the sum of a uniform “index rate” plus an “add-on” that varies depending on the type of loan (Subsidized/Unsubsidized or PLUS) and the borrower’s grade level (undergraduate or graduate/professional). Thus, interest rates will be the same for Federal Stafford Subsidized Loans and Stafford Unsubsidized Loans taken out by an undergraduate student, with a different rate for PLUS Loans taken out by taken out by parent borrowers.
The interest rate for a loan, once established, will apply for the life of the loan – that is, the loan will be a fixed-rate loan. As a result, it is likely that many borrowers will have a set of fixed-rate loans, each with a different interest rate, including the 3.4% and/or 6.8% Federal Stafford Subsidized and Stafford Unsubsidized loans made prior to July 1, 2013.  

**New Loan Length Restrictions**

Beginning July 1, 2013, the length of time students will have access to subsidized loans is limited for new borrowers. Students cannot borrow more than 150% of a student’s program length.  For example, students who enroll in a two-year degree program can only borrow subsidized loans for three years total.  Once that limit has been reached, a student may borrow only unsubsidized loans, and will begin to accrue interest on outstanding subsidized loans. For more information, please visit: http://tinyurl.com/LimitRule 

***New Loan Disbursement Regulations***

In an effort to incent student success and completion of courses and to reduce Lorain County Community College’s Federal Student Loan default rate, student loans will be disbursed in two payments during each term. The payments will be based on commencement of attendance and the midterm grades. For full term classes, the disbursements will occur about the fifth and tenth week of fall and spring semesters. At the first disbursement, students must commence attendance and be currently enrolled in a minimum of 6 credit hours. To receive the second loan disbursement, students must be currently enrolled and actively pursuing course completion in a minimum of 6 credit hours.

****Final grades of W, F, U, or a midterm/final grade of FAW will not be counted towards the total hours for the minimum 6 credit hour disbursement requirement.****

Interest Rates

The interest rate for Subsidized Stafford loans depend on the date of disbursement.

Date of First Disbursement  Interest Rate

July 1, 2006 – June 30, 2008


July 1, 2008 – June 30, 2009


July 1, 2009 – June 30, 2010


July 1, 2010 – June 30, 2011


July 1, 2011 – June 30, 2012


July 1, 2012 - June 30, 2013


July 1, 2013 - June 30, 2014


July 1, 2014 or after                4.66%

**For all Unsubsidized Loans disbursed prior to July 1, 2013 the interest rate is fixed at 6.8%.  **For all Unsubsidized loans disbursed after July 1, 2013, the interest rate is fixed at 3.86%.

** For all Unsubsidized loans disbursed after July 1, 2014, the interest rate is fixed at 4.66%

Loan Limits

Review the chart below for annual and aggregate limits for the Federal Stafford Loan.

Dependent Undergraduates


Additional Unsubsidized

Total (Subsidized and Unsubsidized) 

First Year




Second Year




Independent Undergraduates
(and dependents whose parents are unable to borrow under the PLUS program)

First Year




Second Year




Aggregate Limits for Sub/Unsubsidized Loans
Dependent Undergraduates
(Excluding those whose parents can't borrow PLUS)
$23,000 $8,000 $31,000
Independent Undergrads & Dependent Students whose parents can't get PLUS $23,000 $34,500 $57,500

** Loan eligibility is based on the federal loan calculation.

Loan Fees  




Federal Subsidized Stafford Loans


Federal Unsubsidized Stafford Loans


Federal PLUS Loans






 Federal Subsidized Stafford Loans    


 Federal Unsubsidized Stafford Loans


 Federal PLUS Loans






 Federal Subsidized Stafford Loans


 Federal Unsubsidized Stafford Loans


 Federal PLUS Loans


***Federal Stafford Loans that are processed and disbursed by Lorain County Community College will be submitted to the National Student Loan Data System (NSLDS) and will be accessible by guaranty agencies, lenders and schools determined to be authorized users of the data system., as required by the Consumer Information regulations.

Code of Conduct for Education Loans

In keeping with Federal Education Loan regulations, Lorain County Community College Code of Conduct for Education Loans specifically prohibits:

  • Revenue-sharing arrangements with any lender
  • Receiving gifts from a lender, a guaranto or a loan servicer
  • Contracting arrangement providing financial benefit from any lender or affiliate of a lender
  • Directing borrowers to particular lenders or refusing or delaying loan certification
  • Offers of funds for private loans
  • Call center of financial aid office staffing assistance
  • Advisory board compensation

 How to Apply for a Federal Stafford Loan

Private Loans

Private loans are available for students who qualify, as an alternative way to fund educational expenses.  When chosing to borrow private loans, students may choose any lender who actively participates in the private education programs. Student Loan borrowers may also qualify for loans or other assistance under the HEA (Higher Education Act) programs.  Terms and conditions of the Title IV, HEA programs may be more favorable than the provision of the private education loans. 


Lorain County Community College
Financial Services 
1005 North Abbe Rd.
Elyria, OH 44035

Phone: 440-366-4034


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