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.
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).
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)
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
|Freshman and students in certificate programs||Sophomore in an associate’s degree program|
No more than $4,500 of this amount may be in subsidized loans.
AGGREGATE BORROWING LIMITS
|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.|
What are the costs of getting a loan?
Effective October 1, 2015, there will be a 1.068% origination fee charged on your Federal Direct Subsidized and Unsubsidized Loans. Consult studentloans.gov for the borrower benefits provided by your lender. The origination fee for Parent PLUS loans is 4.272%. The origination fee is subject to change October 1st of each year.
Interest rates on Federal Direct loans are subject to change annually on July 1st of each year. 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, 2015 and before July 1, 2016:
- 4.29% Federal Direct Loan (subsidized)
- 4.29% Federal Direct Loan (unsubsidized)
- 6.84% Federal PLUS for parents
How does the process work?
- File a FAFSA and complete Verification if required (you will be notified by the Financial Aid Office if you are selected for verification).
- An award notice will be sent to you via your Stark State email once your aid is processed.
- You must complete a Direct Loan Request Form. This can be found online via mystarkstate >> My Stuff >> Apply for Your Loan
- First-time borrowers will be required to complete an online Entrance Counseling session and a Master Promissory Note (MPN) via studentloans.gov
- 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.
- 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 Business Office.
When do I receive the money?
- Summer semester: 3rd and 6th week of classes
*If you are taking a second 5-week course, attendance will be verified prior to receiving your second disbursement.
- Fall and spring semesters: 4th and 9th week of classes
*If you are taking a second 8-week course, attendance will be verified prior to receiving your second disbursement.
First-time loan borrowers who are subject to the 30-day disbursement delay will not receive a refund of loan proceeds until the fifth week of classes.
All students approved for Federal Direct Loans will have their loan funds paid out in two equal disbursements during each semester. Once the loan funds are disbursed to your student account, it will be used to pay off any outstanding charges. If there are excess loan funds after your student account is paid off, you will be refunded the excess amount by the Business Office. If the first disbursement of your loan funds (combined with other applicable financial aid or out-of-pocket payments) is not enough to cover the full balance of your student account, you will not be issued a refund at that time.
Midterm grades are mandatory as of summer semester 2015 and will be entered for every class in which you are enrolled. You will be notified after all midterm grades have been posted. If your midterm grade is an “F” and you are failing to attend after the initial never attend deadline you will be administratively withdrawn from that course. The second disbursement will be based on midterm grades and continued attendance in registered classes.
Loan funds will only be disbursed if you are registered for 6 or more credit hours in courses required for your major and all student requirements are complete at the time of each disbursement. If you drop below 6 credit hours before either disbursement of your loan is made, it will not be disbursed to you.
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. SALT can help you – click here.
Who are the players?
Direct loan servicer
The lender of your Federal Direct Loan. They are a part of the U.S. Department of Education.
A student loan servicer collects payments, processes deferment and forbearance requests and handles correspondence on behalf of the lender.
- Contact your Federal Student Loan Servicer
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.