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William D. Ford Federal Direct Loan Program


(For additional information about the Direct Loan Program visit the www.direct.ed.gov and www.studentloans.gov websites)


Student loans are one of four types of financial aid. Student loans are borrowed money that must be repaid, with interest. When used properly, student loans can be a good resource to assist with college costs. Before considering a student loan, you should exhaust all other financial aid types, such as grants, scholarships and work-study. To determine eligibility for these programs you must complete the Free Application for Federal Student Aid (FAFSA). The FAFSA can be completed online at www.fafsa.gov at no cost to the applicant.


Glen Oaks Community College participates in the Federal Direct Loan Program. Funds are provided by the federal government. These loans help students finance their educational expenses.  You must be enrolled at least half-time (6 or more credits) and be pursuing a certificate or degree program. We urge you to borrow conservatively. Don’t borrow more than you need!


The Direct Loan Program offers the following types of loans:


  • Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods. Note: federal regulations were amended to temporarily eliminate the interest subsidy provided on Direct Subsidized Loans during the six month grace period provided to students when they are no longer enrolled on at least a half-time basis. This change will be effective for new Direct Stafford Loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014.

 

  • Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. If the student allows the interest to accumulate, it will be capitalized. This means interest will be added to the principal amount of the loan and additional interest will be based on the higher amount. This will increase the total repayment amount of the loan. The student who chooses to pay the interest as it accumulates will repay less on the loan.

 

  • PLUS: 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. PLUS loan borrowers cannot have an adverse credit history (a credit check will be done). For more information access www.direct.ed.gov/parent.html

 

Applying for a Direct Loan

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  1. As with all federal student aid, you apply for Direct Loans by filling out the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov

  2. Complete and submit a Glen Oaks Community College Federal Direct Loan Request Form.  This form can be accessed from the Forms link on your left or a paper copy is available in the GOCC Financial Aid Office.

  3. Entrance Counseling: Except for Direct PLUS Loan borrowers, if you haven’t previously received a loan, you must complete entrance counseling before your school can make the first disbursement of your loan. This helps you to understand your responsibilities regarding your loan. You can complete this counseling on-line at the www.studentloans.gov website.

  4. Master Promissory Note: To take out a Direct Loan for the first time, you must complete a Master Promissory Note (MPN). You can complete the MPN on-line at the www.studentloans.gov website. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of your loan(s). A student can borrow additional Direct Loans on a single MPN. It is not required that you complete a new MPN each academic year.


 

Loan Limits

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The award letter you receive from Glen Oaks will tell you how much you can borrow and the types of loans you are eligible to receive.


The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade level and on whether you are a dependent student or an independent student. Grants, work-study and scholarships may have an impact on your loan eligibility. The following table shows the federal limits for an academic year in Direct Subsidized and Unsubsidized Loans as well as the total, or aggregate, amount you may borrow:



Annual Maximum

Annual Maximum

Annual Maximum

Dependent Students

Subsidized

Unsubsidized

Total

Freshman (up to 28 credits)

$3,500

$2,000

$5,500

Sophomore (29 credits or more)

$4,500

$2,000

$6,500


 

 

 

Aggregate Limit for Dependent

Students

$23,000

$8,000

$31,000



Annual Maximum

Annual Maximum

Annual Maximum

Independent Students

Subsidized

Unsubsidized

Total

Freshman (up to 28 credits)

$3,500

$6,000

$9,500

Sophomore (29 credits or more)

$4,500

$6,000

$10,500


 

 

 

Aggregate Limit for Independent Students

$23,000

$34,500

$57,500


Processing Fees

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All Federal Direct Subsidized and Unsubsidized Stafford Loans are subject to a 1.051% origination fee which will be deducted proportionately from each of your loan disbursements.


Loan Disbursement

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Your loan will be disbursed in two installments. If you have requested a two (2) semester loan, the disbursements will usually be at the beginning of each semester. If you have requested a one (1) semester loan, you will receive the disbursements at two different times throughout the semester. Your loan funds will be sent to Glen Oaks and applied directly to your student account.


Direct Loan interest rates

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View at http://studentaid.ed.gov/PORTALSWebApp/students/english/DL_InterestRates.jsp



Exit Counseling

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Student borrowers are not required to begin making payments until six (6) months (grace period) after they drop below half-time attendance. When the student drops below half-time (6 credit hours or more) or leaves school, Exit Counseling is required. Glen Oaks will notify the student via postal mail when he/she drops below half-time enrollment. This notification will include a paper copy of the Exit Counseling information and a link to the Federal Direct Loan website for exit counseling. Exit Counseling located at https://studentloans.gov.


Repayment Information

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Your loan servicer, the organization that handles billing you for your loan, will provide you with information about repayment and your repayment start date. Our National Student Loan Data System at www.nslds.ed.gov can tell you who your loan servicer is, and you can visit the servicer's website or call them to find out how to make payments. It is very important that you make your full loan payment on time either monthly (which is usually when you'll pay) or according to your repayment schedule. If you don't, you could end up in default, which has serious consequences. Student loans are real loans—just as real as car loans or mortgages. You have to pay back your student loans. Access more information about repayment at http://studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsp


Repayment Plans and Calculators

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When it comes time to start repaying your student loan(s), you can select a repayment plan that is right for your financial situation. Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose. Access more information about your repayment options at


 

Postponing Repayment

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If you have trouble making your education loan payments, contact immediately the organization that services your loan. You might qualify for a deferment, forbearance, or other form of payment relief. It's important to take action before you are charged late fees. For Direct and FFELSM Stafford Loans, contact your loan servicer. If you do not know who your servicer is, you can look it up in the U.S. Department of Education’s National Student Loan Data System (www.nslds.ed.gov).


Note to PLUS Loan borrowers: Generally, the eligibility requirements and procedures for requesting a deferment or forbearance for Stafford Loan borrowers also apply to you. However, since all PLUS Loans are unsubsidized, you'll be charged interest during periods of deferment or forbearance. If you don't pay the interest as it accrues, it will be capitalized (added to the principal balance of the loan), thereby increasing the amount you'll have to repay.


Know What You Owe

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Students and/or parents who receive a Federal Direct Stafford Loan or Parent Loan for Undergraduate Students (PLUS) will have their loan data submitted to the National Student Loan Data System (NSLDS), a central database for student aid information.


The National Student Loan Data System (NSLDS) has information about your federal student loans. To review your loan information visit www.nslds.ed.gov. You will need:


  • Social Security Number

 

  • First two letters of your last name

 

  • Your date of birth

 

  • Personal identification number (PIN). This is the PIN assigned you when you completed the FAFSA.


Code of Conduct

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The Financial Aid Office follows Glen Oaks Community College's Employee Code of Conduct (Policy 5.00) which prohibits conflicts of interest. The Financial Aid Office adheres to the Statement of Ethical Principles and Code of Conduct of the National Association of Student Financial Aid Administrators (NASFAA). Glen Oaks Community College has published a Student Loan Code of Conduct pursuant to the Higher Education Opportunity Act of 2008.