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Financial Aid- Federal Direct Stafford Loans

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Guiding Principles

  • Federal Stafford Loans are a responsible alternative to private lending/borrowing because of the following reasons:
    • Lower interest rates
    • Longer repayment terms
    • Deferment and Forbearance options
    • Early loan forgiveness for graduates working in public service
  • Federal Stafford Loans are not to be used as a mechanism for securing enrollment for a student who files their FAFSA late. A student must have a payment method in place to pay for classes at the time tuition is due.
  • Federal Stafford Loans are intended to help students and families offset the rising cost of college tuition.
  • Appropriate counseling must be completed prior to the certification of Federal Stafford Loan.

The Direct Student Loan Program (Student)

Germanna Community College participates in the William D. Ford Federal Direct Loan Program, offered through the Department of Education. Federal Stafford loans are monies that a student or parent borrow and repay with interest. Federal Education loans are offered at low-interest rates and have long repayment terms. A student must be enrolled for at least six credits in an eligible certificate or degree program and be making Satisfactory Academic Progress (SAP) in order to be eligible for a Federal Stafford Loan.

Students with financial need can obtain a subsidized Federal Direct Stafford Loan. This means the U.S. Department of Education will pay the interest charges on this type of loan as long as the student is enrolled at least half-time (6 or more credits) and during a six-month period following enrollment (grace period). At the end of the grace period, repayment of the loan will begin and interest begins to accrue to the student borrower. Repayment may extend up to ten years but borrowers must make payments of at least $50 per month.

Students who do not qualify for the subsidized (need-based) Federal Direct Stafford Loan can obtain an unsubsidized (non need-based) Federal Direct Stafford Loan. Unlike the subsidized Loan, the student is responsible for the interest obligation while enrolled. The student, while enrolled on at least a half-time basis (6 or more credits), may pay interest only or have the interest capitalized (added to the principal). The interest rate for Subsidized loans is currently fixed at 3.86%. The interest rate for Unsubsidized loans is currently fixed at 3.86%. The interest rate for Parent PLUS Unsubsidized loans is currently fixed at 6.41%.

First time Federal Direct Stafford loan borrowers at GCC must complete an Entrance Loan Counseling Session and ALL Federal Direct Stafford loan borrowers must complete an Exit Loan Counseling Session upon graduation or withdraw. Repayment begins six months after a student leaves school because of graduation, other reasons, or drops below half-time level. All loan applicants must have completed a Free Application for Federal Student Aid (FAFSA) and may not have defaulted on prior loans or borrowed their maximum lifetime amounts as determined by the Federal government. Students may not borrow more than the cost of their education minus other financial aid awarded them. The Office of Financial Aid must approve all federal loans and reserves the right to refuse loan applications due to academic deficiency or evidence that a student may have difficulty managing loan debt. To apply for a Direct Stafford Loan, students must meet basic eligibility criteria.

How to Apply for a Federal Direct Student Loan

If you are a student interested in applying for a Federal Stafford Loan, you will need to follow these steps:

  1. Apply to the College at: www.germanna.edu and be admitted into an approved Degree or certificate plan and be making Satisfactory Academic Progress (SAP).
  2. Complete the Free Application for Federal Student Aid (FAFSA) each year at http://www.fafsa.gov.
  3. Provide other documents if requested by the Financial Aid office, such as verification items and tax information. Sometimes the FAFSA data is incomplete or a student has been selected by the US Dept. of Education for verification. If the Financial Aid Office needs additional information before determining your loan eligibility, please comply as quickly as possible.
  4. Complete Loan Entrance counseling. This will take about 30 minutes. All first time borrowers at GCC are required to complete Loan Entrance Counseling. You can do this online at: https://studentloans.gov/. Once you access this website, click "Sign In" and enter the requested information. *Please note: You will need your FAFSA pin #. Next click on "Complete Entrance Counseling".
  5. Complete your Master E-Promissory Note (MPN) at the secure Department of Education site at: https://studentloans.gov. Once you access this website, click "Sign In" and enter the requested information. *Please note: You will need your FAFSA pin #. Next click on "Complete Master Promissory Note" then select "Subsidized/Unsubsidized" as the type of loan you would like to receive.
  6. Please Note: You only need to complete one Master Promissory Note during your academic "career" at GCC. The only thing you have to do each time you wish to borrow is complete the GCC "Federal Direct Stafford Loan Request Form." The only time you would have to redo the MPN is if you transfer to another college and borrow there. You would do a new MPN at that college, and upon your return to GCC, you would do another MPN.

  7. Determine how much you need to borrow as well as the loan period. All loans come in TWO disbursements. We recommend Fall/Spring loans. BEWARE of student loan debt and borrow only what you need. Students taking a one semester loan are only entitled to half the maximum amount per semester.
  8. Complete the Federal Direct Loan Request Form on or before the recommended completion date each semester.
  9. View award at your MyGCC>Student Center>View Financial Aid (Be sure to turn in any documents listed under your   "To Do List" as these will need to be turned in before an award will be processed).
  10. Enroll, attend, and maintain at least six credit hours to retain loan eligibility. You must attend your classes to be eligible for the loan disbursements. If you drop or withdraw to below half-time (6 credits) before your loan is disbursed, the funds will be returned. Loan checks (balances remaining after tuition & books) will be mailed between the fifth and sixth week each semester. Please plan your finances accordingly.
Student Type Completed Credits Subsidized> Unsubsidized Annual Max(Sub & Unsub) Total Debt Permitted
Dependent Less than 30 $3,500 $2,000 $5,500 $31,000 ($23,000 sub max)
Dependent 30 or more $4,500 $2,000 $6,500 $31,000 ($23,000 sub max)
Independent Less than 30 $3,500 $6,000 $9,500 $57,500 (sub & unsub)
Independent 30 or more $4,500 $6,000 $10,500 $57,500 (sub & unsub)

**Please allow 4-6 weeks for college processing, depending on the time of year**

Federal Direct PLUS Loans (Parent)

The Federal Direct PLUS Loan program is a non-need-based source of loan funds for the parent(s) of dependent students. Federal Direct PLUS Loans may be used in conjunction with Federal Direct Stafford Loans. Each year, parents of dependent students may borrow an amount not to exceed the cost of attendance less any financial aid (including Federal Direct Stafford Loans). Repayment begins 60 days after the final disbursement is made unless the parent borrower makes other arrangements with their lender to defer repayment. The interest rate is currently fixed at 7.9%. The Federal Direct PLUS Loan on the undergraduate level is only available to parents. Guardians are ineligible. A credit check is performed on all parental borrowers, and pre-approval is required.

PLEASE NOTE: This loan is in the parent's name and the parent will be responsible for repayment of the loan.

How to Apply for a Federal Direct Parent/PLUS Loan

If you are an eligible parent interested in applying for a Federal Direct PLUS Loan, you will need to complete the following steps:

  1. Ensure that the student in which you are applying for the loan has applied for admission to the college, been placed into an eligible academic curriculum, and is making Satisfactory Academic Progress (SAP).
  2. Obtain and complete the Federal Direct Parent PLUS Loan Request Form on or before the recommended completion date each semester. This form is available on the website or in the Financial Aid Office.
  3. Complete the Electronic Master Promissory Note (MPN) at the secure Department of Education site at: https://studentloans.gov/. Once you access this website, click "Sign In" and enter the requested information. *Please note: You will need your FAFSA pin #. Next click on "Complete Master Promissory Note" then select "Parent PLUS" as the type of loan you would like to receive.
  4. Ensure that the student enrolls for, attends, and maintains at least six credit hours to maintain loan eligibility. Students must stay active in at least six credit hours each semester. Students who drop or withdraw below half-time status risk having Federal Direct PLUS Loans canceled.
  5. Determine how much you need to borrow. The parent will be notified by the U.S. Department of Education of acceptance or denial of the PLUS loan request.  The maximum amounts per year listed in the chart below.
    If the PLUS loan is denied, the servicer will provide instructions concerning an endorser. If a PLUS loan is denied and the parent does not wish to seek an endorser, the student becomes eligible for an additional unsubsidized loan up to $4000, depending on the student's cost of attendance.
  6. Have the student view the award at their MyGCC >Student Center>View Financial Aid (Be sure to turn in any documents listed under the "To Do List" as these will need to be turned in before an award will be processed.
Student Type Completed Credits Subsidized Unsubsidized Annual Max(Sub & Unsub) Total Debt Permitted
Dependent Less than 30 $3,500 $2,000 $5,500 $31,000 ($23,000 sub max)
Dependent 30 or more $4,500 $2,000 $6,500 $31,000 ($23,000 sub max)
Independent Less than 30 $3,500 $6,000 $9,500 $57,500 (sub & unsub)
Independent 30 or more $4,500 $6,000 $10,500 $57,500 (sub & unsub)

**Please allow 4-6 weeks for college processing, depending on the time of year**

Loan Application Important Dates and Priority Deadlines

Semester Priority Filing Date
Fall & Spring Semester July 1

Please Note: Applications received after the dates above will be processed in the order in which they are received.

Just Graduated?  Having trouble making your student loan payments? Click here for access to all of the repayment options provided by the U.S. Department of Education.

Other helpful Direct Student Loan Program Links: