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Direct Student Loans (Frequently Asked Questions)

Q. How do I request a direct student loan?
A. After completing the FAFSA and your financial aid file you must complete any required Direct Loan steps, as per the Federal Direct Loan "Getting Started" page.

Q. How much can I borrow?
A. Maximum annual loan limits per academic year are:

 

* Base Direct Loan can be subsidized, depending on need/outcome of your FAFSA and DL Subsidized "Maximum eligibility period rules"

 

 

To be a 2nd year student you must have earned at least 45 college level credits in your current degree program.

NOTE: The amount you may borrow may be less than what is listed above depending on your financial aid budget, financial aid award, number of quarters that you will be enrolled during the year and other factors. The Financial Aid Office will make this determination when the loan application is processed. You must be enrolled in at least 6 eligible credits to receive the Direct Student Loan.

Q. Are there loan fees?
  A. Loan fees are 1.051% of the amount your borrow as of July 1, 2013. The fees are subtracted each quarter you attend. If you borrow $1,000 the fees are $10.51 and the loan funds you will receive will be $989.49.

Q. What does subsidized and unsubsidized mean?
  A. Subsidized loans do not accrue interest while you are in school. Interest is paid by taxpayer funds while you are in school at least half time (6 credits). Unsubsidized loans DO accrue interest at a rate of 6.8% while you are enrolled in school. You are responsible to repay this interest.

Q. How much do I need to borrow?
  A. You can determine the loan amount you need by reviewing the expenses you will have for the year, including all school related expenses. Determine which expenses will be paid with your income from work or grants you will receive. Borrow what you need for the whole academic year in your initial request. If students have additional eligibility, subsequent requests must be submitted in writing. It may take up to 3 months before additional requests can be reviewed. Multiple requests will not be processed.

Q. What are the current interest rates?
A. Subsidized loans currently have an interest rate of 6.8%, which is deferred until you drop below half time enrollment or graduate from your program (effective July 1, 2013). Unsubsidized loans currently have an interest rate of 6.8%, which begins once the load is disbursed to you (effective July 1, 2013).

Q. What is an average amount students borrow, and what are the estimated monthly payments?
  A. Skagit Valley College students borrowing during the past two years have an average total loan indebtedness of $13972. The average estimated monthly repayment on an unsubsidized Loan in this amount for 10 years with the maximum 6.8% interest rate is $163.
 
  To estimate your monthly repayment with your total indebtedness, you can go to:
  1. www.nslds.ed.gov to first find your total loan indebtedness, then
  2. www.finaid.org/calculators to find your average monthly payment information (under "loans" go to "loan calculator")

Q. How long before I will receive my loan funds?
A. It will take anywhere from 4 to 16 weeks to process your loan request, depending on the volume of applications received. Incomplete and/or missing documents will delay the processing of your loan. After your loan is processed, you will receive a Disclosure Statement from the U.S. Department of Education regarding your loan. This will state the amount of your loan, the estimated disbursement dates, the interest rate, number of disbursements for the academic year and other information. Loan funds should be available to you within two weeks after you receive your disclosure statement.

Q. How will I receive my funds?
A. Skagit Valley College has adopted the Skagit Cardinal Card for disbursement of your Financial Aid funds. Watch for your card in the mail. Do not throw away or destroy! Learn more about the Skagit Cardinal Card at the skagitcardinalcard.com

Q. Do I have to accept the loan funds? Can I cancel the loan? How do I cancel the loan?
A. No you do not have to accept loan funds. You have the right to cancel all or a portion of the loan. You need to submit a written request to the Financial Aid Office to cancel all or a portion of the loan BEFORE funds have been disbursed. If you cancel loan funds during an academic year, subsequent loan requests will not be processed.

Q. What if I've had a student loan before?
A. If you received a Direct Loan for any quarter during the 12/13 award year (summer through spring) you will only be required to complete Step 1 of the loan application process.

Q. When do I have to start repaying my loan?
A. Loan repayment is deferred while you are enrolled at least half-time (minimum of 6 credits) in an eligible program of study. Once you are no longer enrolled in at least six credits, your repayment period will begin. There is an initial six-month grace period during which you are not required to make payments. When the grace period ends, you must begin making payments.

Q. How much will my monthly payments be, and for how long?
A. To estimate your monthly payments with your total loan indebtedness, go to :
1. www.nslds.ed.gov to first find your total loan indebtedness, then
2. www.finaid.org/calculators to find your average monghtly payment information (under "loans" go to "loan calculator")
If you have questions about your payments, call the Direct Loan
Servicing Center at (800) 848-0979

Q. What else should I know about my loan?
A. The maximum amount you may borrow is determined by the number of quarters for your loan and your budget. When you receive a Federal Direct Loan, you are agreeing to complete the Exit Counseling when you leave Skagit Valley College. Skagit Valley College will mail the Exit Interview material to you.

Q. How can I learn more about the Federal Direct Student Loan Program?
A. There are many sources of information, including the Internet sites below.
  www.studentloans.gov
  www.nslds.ed.gov