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We always encourage students to apply for ALL federal and state grants, as well as any college, private or community scholarships before considering a student loan. Once you have exhausted these options, federal student loans may be an appropriate solution to help with your expenses. Always remember YOU MUST REPAY STUDENT LOANS!
There are several types of federal student loans, such as annual and lifetime loan limits, fees and interest rates, and repayment terms and conditions. You will find more information about Federal Loans on the Federal Student Aid website.
Student loans are real loans, just like a car loan or a mortgage. You must repay a student loan after you leave college even if your financial circumstances become difficult or you do not complete your program. If you have other means to pay for your college expenses, we recommend that you consider using these means before applying for a student loan.
Student Loans are part of a financial aid package. In order to receive a student loan, your first step is to complete a FAFSA (Free Application for Federal Student Aid).
What is a Direct Stafford Loan?
The U.S. Department of Education provides Direct Stafford Loans (Direct Loans) to eligible college students based on financial need and other specific eligibility requirements. There are two types of Direct Loans, subsidized and unsubsidized:
- Subsidized - This is need based and eligibility is determined by the FAFSA. The federal government pays the interest on this loan while you are enrolled at least half-time in 6 credit hours, during the six-month grace period after graduation or withdrawal, and during authorized periods of deferment.
- Unsubsidized – You are responsible for interest from the date your loan funds are disbursed until it is paid in full. You may choose to pay the interest charged on the loan or allow it to be capitalized (added to the loan principal) until you start repayment after you cease enrollment. Whenever possible, we recommend that you pay the interest as it is assessed to minimize your total cost of borrowing.
How do I apply for a Direct Loan at Jefferson?
- Complete the annual FAFSA (Free Application for Federal Student Aid). If your application is selected for Verification, you must complete that process before you will receive your JCC Financial Aid Award Notification that will note the type and amount of Direct Loan you are eligible for.
- If you are a first-time borrower, complete your Direct Loan Master Promissory Note (MPN) and Entrance Counseling for undergraduate students
- List Jefferson Community College, Watertown, NY when you complete both of these online requirements. We will receive notification of your completion electronically.
- Complete and submit the 2014-15 Direct Student Loan Application & Instructions form to Financial Services (1220 Coffeen Street, Watertown, NY 13601.)
Federal Direct Parent Loan for Undergraduate Students (PLUS)
The Federal Direct Parent Loan for Undergraduate Students (PLUS) is available from the federal government to assist parents in meeting the cost of their child’s education. These loans are made to parents of dependent undergraduate students who are registered at least half time (six credits or more) and are matriculated in a degree or certificate program.
Repayment begins 60 days after the last disbursement (for example: after the Spring disbursement for a Fall/Spring loan). Eligibility is determined by the Financial Aid Office, and the amount borrowed may not exceed the cost of attendance less any other financial aid the student is eligible for.
To borrow a PLUS loan for a student, the parent must be the student’s biological or adoptive mother or father. A stepparent is also eligible to borrow a PLUS loan if his/her income and assets were reported on the FAFSA. A legal guardian is not considered a parent for a PLUS loan. The Federal Direct Loan Servicer will complete a credit check on the parent borrower prior to approval.
The U.S. Dept. of Education has approved the following interest rate and fees for Federal Direct PLUS Loans:
- 7.21% as of 7/1/14 (may change after July 1st the following year - capped at 10.50%)
- 4.288% origination fee (after 12/1/13)
Plus Application Process:
Students, and their parents, must first complete the Free Application for Federal Student Aid (FAFSA) for the student by using “FAFSA on the Web” at http://www.fafsa.ed.gov. Students must be in good financial aid standing and should accept what is offered to them in student loan eligibility. Once the FAFSA has been completed, the Federal Direct Parent Loan (PLUS) application process can be found on this form:
This is not a guaranteed loan. The parent must apply and be credit approved.
If the parent is denied, they may add a co-borrower to the loan and retry for approval. Or, they have the option to allow the student to replace the parent loan with a Federal Direct Unsubsidized Loan of up to $4,000 for a Freshman/Sophomore per academic year, please contact Financial Services for more information. A new loan counseling requirement for applicants who are determined to have an adverse credit history, but who qualify for a Direct PLUS Loan by documenting extenuating circumstances or obtaining an endorser. The applicant must complete the counseling on the www.studentloans.gov Web site (under the Parent Borrowers tab – please note that this is NOT the same as the student’s required entrance loan counseling).
PLEASE NOTE: The parent PLUS loan amount could be higher than the student loan.
If you have questions about student loans you can check our Financial Literacy Resource page, our Frequently Asked Questions or please contact the JCC Financial Services Office at 315 786-2350 and we can help you!