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Frequently Asked Loan Questions

Who can borrow?

A student may be eligible to borrow if he or she meets the following requirements:

  • Is eligible to receive financial aid as described under "Eligibility Requirements".
  • Is enrolled in a degree-seeking program or certain certificate programs.
  • Has educational costs not covered by other types of financial aid, as certified by Stark State College Financial Aid Office.
  • Is enrolled and maintains at least 6 credit hours during the semester.
  • Has shown ability to benefit.
  • Is making satisfactory academic progress according to the standards established by federal regulations and Stark State College.
  • Is not in default on any federal student loan with the Department of Education or another institution and does not owe a grant overpayment.

First-time borrowers complete the Entrance Counseling and Master Promissory Note found here.

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What is the difference between a subsidized and an unsubsidized loan?

Federal Direct Subsidized Loans

  • Eligibility is based on financial need.
  • The U.S. Department of Education pays the interest while you are in school at least half time (6 credit hours) and during deferment periods.

Federal Direct Unsubsidized Loans

  • Eligibility is not based on financial need.
  • Interest accrues on this loan while you are in school, during grace periods, and during deferment or forbearance periods.
  • You can choose to make interest payments while you are in school, grace, deferment, or forbearance or the interest can be added to your loan balance (this is called capitalization)

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How much can I borrow?

A student loan can only cover educational costs not met by other sources of financial aid. The table below shows the maximum amount a student at Stark State College can borrow for each academic year along with the aggregate limits. Your loan eligibility is determined by the Financial Aid Office. Factors taken into account are the cost of your attendance for the loan period requested, the expected family contribution (EFC) as determined by the information you provided on your Free Application for Federal Student Aid (FAFSA) and the total of any other financial aid awarded. Therefore, you may not be eligible for the maximum amounts.
Conservative borrowing is strongly encouraged.

ANNUAL FEDERAL DIRECT LOAN LIMITS
(Maximum Combined Subsidized and Unsubsidized)

  Freshman and students in certificate programs Sophomore in an Associate's Degree program
Dependent
Undergraduate
Student

$5,500
No more than $3,500 of this amount may be in subsidized loans.

$6,500
No more than $4,500 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.

$10,500
No more than $4,500 of this amount may be in subsidized loans.

 

AGGREGATE BORROWING LIMITS
(Maximum total outstanding loan debt you can accumulate while attending a two-year or four-year college)

Dependent Undergraduate Student $31,000 - No more than $23,000 of this amount may be in subsidized loans.
Independent Undergraduate Student $57,500 - No more than $23,000 of this amount may be in subsidized loans.

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What are the costs of getting a loan?

There will be a 1.0% origination fee charged on your Federal Direct Loans. Consult www.studentloans.gov for the borrower benefits provided by your lender.

Interest on the Federal Direct loans is fixed. The federal government pays the interest for the subsidized Direct loan while you are in school at least half time. Interest charges for the unsubsidized Direct loan begin accruing once the funds are disbursed.

Federal Direct Interest Rates as of July 1, 2012:
6.8% Federal Direct Loan (subsidized)
6.8% Federal Direct Loan (unsubsidized)
7.9% Federal PLUS for parents

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How does the process work?

  1. File a FAFSA and complete Verification if required (you will be notified by the Financial Aid Office if you are selected for verification).
  2. An award notice will be sent to you via email once your aid is processed.
  3. You must formally accept your Federal Direct Loan offer. This can be done online via mystarkstate
    • First-time borrowers will be required to complete an online Entrance Counseling session and a Master Promissory Note (MPN) via mystarkstate
  4. Direct Loan Servicer processes the loan and sends the loan funds to the school. Also, the Direct Loan Servicer will mail you a disclosure statement containing important information regarding your student loan. Keep this statement for future reference.
  5. If you still meet the eligibility requirements, Stark State will apply the loan proceeds to your account. Any amount remaining after tuition and fees have been paid can be refunded to you by the Bursar’s Office.

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When do I receive the money?

If you apply for a loan for two or more semesters, one disbursement will come for each semester.

Funds sent by EFT will automatically be applied to your Stark State College account balance. Any amount remaining after tuition and fees have been paid can be refunded to you by the Bursar's Office within 14 days of the credit balance.

If you decide to cancel all or a part of your loan, contact the Financial Aid Office.

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When do I repay my loan?

What if I Stop Attending Class?
If you do not complete all classes for which you enroll, federal regulations may require that we return a portion, or the full amount of the loan to your lender. In addition, before you stop attending Stark State at least half-time, or you graduate, you must complete an exit interview.

When Do I Start Repayment on the Loan?
Repayment of the principal and interest begins six months after you drop below 6 credit hours, withdraw or graduate. Students with an unsubsidized loan have the option of paying the interest while in school and keeping it current, or letting it accrue and having it capitalized. Contact the Direct Loan Servicer for more information.

Give Yourself Credit and Do Not Default on Your Loan
Making your student loan payments on time is one of the easiest ways to establish a good credit history. A good credit rating will serve you well as you go forward in life.

If loan payments are not made and the delinquency is not resolved, your loan will go into default. If your loan defaults:

  • Your wages can be garnished.
  • Your federal income tax refund can be withheld.
  • The default will be reported to a National Credit Bureau and make it difficult for you to make major credit purchases such as a new car or home.
  • You will be disqualified from receiving any additional federal financial aid.
  • You may be denied professional licenses to practice an occupation.
If you experience difficulty in repaying your loan, you should contact your lender for advice and assistance including deferment and forbearance. Your lender can help you with options.

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Who are the players?

Who's Who?

Direct Loan Servicer
The lender of your Federal Direct Loan. They are a part of the U.S. Department of Education.

Servicer
A student loan servicer collects payments, processes deferment and forbearance requests and handles correspondence on behalf of the lender.

  • Direct Loan Servicer 1-800-848-0979

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What is the deadline to apply?

Your loan request cannot be processed after the last day of classes for the semester(s) for which you have requested a loan. Applying early is recommended. Late applicants may not meet all of the eligibility criteria by the deadline.

In order for loan funds to be disbursed, your signed, completed promissory note must be received by the Direct Loan Servicer within a designated time frame.

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