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Federal Direct Loan - Getting Started

 

The Federal Direct Loan Program

The Federal Direct Loan is a student loan through Skagit Valley College where the Federal Government is your lender. These loans are low interest, low fee loans to help pay for the cost of your education. After you read the following information, you will have the opportunity to apply for a Federal Direct Loan.

The Direct Loan Program offers two types of low fee (currently 1.068%), low interest (currently 3.76%) loans for student borrowers.  They are called Direct Subsidized Loans and Direct Unsubsidized Loans. Both have a fixed interest rate, meaning the loan you borrow for the 16/17 school year will keep the same interest rate through the life of the loan, unless you decide to consolidate your student loans at a later date.  The interest rate/fees for future loans you borrow may be different, as interest rates/fees for new loans change each academic year.

Important:  Subsidized and Unsubsidized Direct Loans both require the student:

  • Be enrolled in (and attending) at least six degree-required credits per quarter
  • Submit a FAFSA and fully complete a financial aid file with the college
  • Adhere to the SVC Satisfactory Progress Policy (available under the financial aid section of SVC’s website)
  • Understand that first time borrowers who are first time students at SVC cannot have loans disbursed until 30 days into their first quarter.If all file/loan documents are complete, we can hold your tuition.You must be able to purchase our own books to start classes.Contact Financial Aid if you need tuition held.

Direct Subsidized Loans

Direct Subsidized Loans are interest-free while you are attending school. To qualify for a Direct Subsidized Loan, you must demonstrate financial need. Your FAFSA results reveal how much you and your family should be able to contribute toward your education costs. Your SVC Cost of Attendance (established by the Financial Aid Office) minus your Expected Family Contribution (derived from your FAFSA) establishes your financial need.  Any grants for which you may qualify are taken into consideration before Subsidized Loan eligibility is determined. There is a limit on how long you may receive need-based, Subsidized loans.  As you continue reading you will see a link with detailed information.

Direct Unsubsidized Loans

Direct Unsubsidized Loans are loans where you are responsible for interest payments, even while you are in school. You can choose to make interest payments or postpone them. If you postpone interest payments, interest will be added to your principal balance. This is known as capitalization. Capitalization increases the total amount you will repay. You will save money by making your interest payments. Financial need is not required to qualify for a Direct Unsubsidized Loan, but you still must complete a FAFSA, and complete your financial aid file with SVC.  The Cost of Education must exceed any other financial aid you have been awarded.

 

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Direct Subsidized Loan Time Limitation

If you receive your first federal student loan after June 30, 2013, there is a limit on the maximum period of time that you can receive Direct Subsidized Loans. In general, you may only receive Direct Subsidized Loans up to 150% of the published length of your program. This is called your “maximum eligibility period”. The Department of Education will determine loan usage and your maximum eligibility based on the length of your program measured in years. For example, if you are enrolled in a two (2) year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is 3 years.

Learn more about the Direct Subsidized Loan Time Limitation.

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Borrowing Limits

The Direct Loan Program has limits on the amount you can borrow each year. Your Financial Aid Office will determine how much you are eligible to borrow based on the following chart, as well as your Cost of Attendance, Effective Family Contribution, grade level in college, and any other aid you have been awarded.  With this in mind, it is a possibility that you may not qualify for the loan maximums.  If you have questions once you receive your Direct Loan Award Notification, please contact us for an explanation of your eligibility.

Please keep in mind that you may be repaying your Direct Loan for 10 years or longer. The more you borrow, the higher your monthly payment will be. Borrow only what you need. The size of your monthly payments may make the difference between manageable and unmanageable debt in your future.

Academic Grade Level/Loan Type

Maximum Loan Amount

First-Year
Undergraduates

Dependent
Student

Independent
Student

 

Base Direct Loan eligibility
(Subsidized and Unsubsidized)

 $3,500.00

  $3,500.00

Additional Unsubsidized Direct Loan eligibility

$2,000.00

 $6,000.00

Maximum First-Year Total

 $5,500.00

   $9,500.00

Second-Year Undergraduates      

Base Direct Loan eligibility
(Subsidized and Unsubsidized)

 $4,500.00

   $4,500.00

Additional Unsubsidized Direct Loan eligibility

 $2,000.00

   $6,000.00

Maximum Second-Year Total

 $6,500.00

   $10,500.00

Aggregate (total)
Undergraduate

 $31,000.00
(no more than $23,000 of which may be subsidized)

$57,500.00
(no more than $23,000 of which may be subsidized)

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Bachelor in Applied Science (BAS) 3rd and 4th year Borrowing Limits

(Totals listed below are strictly for students accepted into a Bachelor in Applied Science (BAS) program.)

 

Dependent
Student

Independent
Student

Base Direct Loan eligibility
(Subsidized and Unsubsidized)

 $5,500.00

  $5,500.00

Additional Unsubsidized Direct Loan eligibility

$2,000.00

 $7,000.00

Maximum BAS Yearly Total

 7,500.00

   $12,500.00

Aggregate (total)
Undergraduate

 $31,000.00
(no more than $23,000 of which may be subsidized)

$57,500.00
(no more than $23,000 of which may be subsidized)

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Repayment

When you graduate, leave school, or drop to less than half-time status, you will have a six-month grace period before repayment begins. Once your grace period ends, you must begin repaying your loan(s). Skagit Valley College asks that you visit www.studentloans.gov to log in and complete Direct Loan Exit Counseling once you drop below 6 credits. 

Please go to www.studentaid.ed.gov for information on repayment options available to you. You may prepay all or part of your loan at any time without penalty. You will save money by paying off your loans early.

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Direct Loan Application Process

Once you have fully submitted your Direct Loan application, processing times can take 4-8 weeks depending on the time of year you are applying.  For example, if you will be starting Fall quarter 2016, and submit your application the beginning of July 2016, you can expect to get your Direct Loan Award Notification sent to your SVC email by late August.  Please keep in mind that only completed and fully processed Financial Aid files can have loan applications certified. 

You can begin the Direct Loan application process by selecting the appropriate link below:

I did not receive Federal Direct Loan funds from SVC in the 2015/2016 award year I did receive Federal Direct Loan funds from SVC in the 2015/2016 award year