Student Loans

 

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 Direct Subsidized Loan
  • Federal Direct Unsubsidized 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 viahttp://studentloans.gov.

Additional eligibility requirements for Federal Direct Loan borrowers are:

  • Must be enrolled for a minimum of six credit hours for each semester you wish to borrow funds
  • Must be meeting the College’s Satisfactory Academic Progress standards
  • Must be meeting all other U.S. Department of Education eligibility requirements
  • At the time of disbursement, must be enrolled in and commenced attendance in a minimum of six credit hours.
     
      Student Loan application instructions.    

Federal Direct Subsidized 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 Direct Unsubsidized 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 Interest Rates for Federal Direct Loans

Interest rates will be established each year for Federal Direct Subsidized, Direct 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 Direct Subsidized Loans and Direct 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 Direct Subsidized and Direct 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 studentaid.edu
 
 

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 the fall and spring semesters. Summer semester will be disbursed in one payment. The fall and spring disbursements 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. Summer disbursements will be based on commencement of attendance in a minimum of 6 credit hours at the time of disbursement.
   

   Final grades of F, W or 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 rates for Direct loans depend on the date of disbursement

Loan Type

Borrower Type

First Disbursement Date

Fixed Interest Rate

Direct Subsidized Loans

Undergraduate

7/1/15–6/30/16

4.29%

7/1/14–6/30/15

4.66%

7/1/13-6/30/14

3.86%

7/1/11-6/30/13

3.4%

7/1/10-6/30/11

4.5%

7/1/09-6/30/10

5.6%

Direct Unsubsidized Loans

Undergraduate

7/01/15-6/30/16

4.29%

7/01/14-6/30/15

4.66%

7/01/13-6/30/14

3.86%

7/01/06-6/30/13

6.8%

Direct PLUS Loans

Parents

7/1/15–6/30/16

6.84%

7/1/14-6/30/15

7.21%

7/1/13-6/30/14

6.41%

7/1/06-6/30/13

7.9%

  
 
Loan Limits

Review the charts below for annual and lifetime aggregate limits for the Federal Stafford Loan(s).

Annual Limits

Dependent Undergraduates

Subsidized

Additional Unsubsidized

Total (Subsidized and Unsubsidized) 
First Year $3,500 $2,000 $5,500
Second Year $4,500 $2,000 $6,500

Annual  Limits

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

First Year $3,500 $6,000 $9,500
Second Year $4,500 $6,000 $10,500

Aggregate Lifetime Limits for Subsidized/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

RATES ARE AS OF JULY 1, 2013:

PROGRAM

ORIGINATION FEE

Federal Direct Subsidized Loans

1.051%

Federal Direct Unsubsidized Loans

1.051%

Federal PLUS Loans

4.204%

 
RATES ARE AS OF DECEMBER 1, 2013:

 PROGRAM   

 ORIGINATION FEE

 Federal Direct Subsidized Loans

 1.072%

 Federal Direct Unsubsidized Loans

 1.072%

 Federal PLUS Loans

 4.288%

 
RATES ARE AS OF OCTOBER 1, 2014:

 PROGRAM    

ORIGINATION FEE 

 Federal Direct Subsidized Loans

 1.073%

 Federal Direct Unsubsidized Loans

 1.073%

 Federal PLUS Loans

 4.292%

 
RATES ARE AS OF OCTOBER 1, 2015:

 PROGRAM    

 ORIGINATION FEE

 Federal Direct Subsidized Loans

 1.068%

 Federal Direct Unsubsidized Loans

 1.068%

 Federal PLUS Loans

 4.272%

 
  
Federal Direct 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 guarantor 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

Private Loans

Private loans are available for students who qualify, as an alternative way to fund educational expenses.  When choosing 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.
  

Nursing Education Assistance Loan Program (NEALP)

The Nurse Education Assistance Loan Program (NEALP) provides financial assistance to Ohio students enrolled for at least half-time study (or accepted for enrollment) in an approved Ohio nurse education program. NEALP provides funding for nurses who intend to serve as instructors or students who intend to serve as nurses after graduation.

   Learn more about NEALP.
   

Loan Repayment Options

When it comes to repaying your federal student loan(s), there are many things to you should understand. The details of repayment can save students time and money. Understanding when loan repayment starts, how to make payments on them, the repayment plan options available, and what to do if you have trouble making payments on your Federal Student Loan(s) will all be essential. 

    Learn more about your Loan Repayment Options.