What are Federal
There are two types of Stafford Loans: Subsidized and Unsubsidized. The interest rate is a fixed rate of 6.8% for loans first disbursed on or after July 1, 2006. Students will have between 10 and 25 years to repay, depending on amount owed and type of repayment plan selected.
Subsidized
· Available to students who demonstrate financial need
· For a subsidized loan, the federal government pays the interest:
* While you are in school for at least 6 credit hours
* For the first six months after you leave school (referred to as the “grace period”)
* During a period of deferment (postponement of loan payments)
· The amount of your subsidized loan cannot exceed financial need or the annual loan limit set by the federal government, whichever is the lesser amount.
Unsubsidized
· Does not require students to demonstrate financial need
· The federal government does not pay the interest on an unsubsidized loan
· The amount will be determined by the following equation:
Cost of Attendance
- Federal Pell Grant, if eligible
- Subsidized Loan, if eligible
- Any other financial aid you receive
= Amount of unsubsidized loan
(up to the annual loan limit)
What are Federal Parent Plus Loans?
Parents can obtain a Plus loan to help pay the cost of education for their dependent undergraduate children. To qualify, the parent borrower must meet the general eligibility requirements for federal student aid such as:
· Be a U.S citizen or eligible noncitizen
· Not be in default on a federal student loan
· Not owe a refund on a federal educational grant (i.e. Pell Grant)
In addition,
· The interest rate is fixed at 7.9% for loans disbursed on or after July 1, 2006
· The parent borrower is responsible for paying all the interest
· The parent borrower will have between 10 and 25 years to repay the loan, depending on the amount owed and the repayment plan selected (Exception: The Income Contingent Repayment Plan is not an option for the Plus Loan)
· The parent borrower must not have an adverse credit history. (Parents with adverse credit may still be considered for the Plus loan by documenting existing extenuating circumstances or by obtaining a co-signer).
· The amount will be determined by the following equation:
Cost of Attendance
- Any other financial aid you receive
= Amount of Plus Loan
What are the Annual Loan Limits?
The maximum annual loan limits are as follows:
|
Year |
Dependent Student |
Independent Student |
|
First Year |
$3,500 |
$7,500 – No more than $3,500 of this amount may be in subsidized loans. |
|
Second Year |
$4,500 |
$8,500 – No more than $4,500 of this amount may be in subsidized loans. |
|
Maximum Total Debt from |
$23,000 |
$46,000 – No more than $23,000 of this amount may be in subsidized loans. |
Other than interest, are there any fees or charges required to get these loans?
Yes, for Direct Stafford Loans first disbursed on or after July 1, 2007 and before July 1, 2008, the loan fee (also called origination fee) is 2.5% with a rebate of 1% for a total of 1.5%. For loans first disbursed on or after July 1, 2008 and before July 1, 2009, the loan fee is 2.0% with a rebate of 1.0% for a total of 1.0%.
For Direct Plus Loans, the loan fee is 4.0% with a rebate of 1.5% for a total of 2.5%.
How do I apply for a
You apply for a Stafford Loan by completing the Free Application for Federal Student Aid (FAFSA). Once Sinclair receives the results of your FAFSA application and any additional documents that we may request, we will complete your financial aid file and offer any Stafford Loans for which you may qualify. You will need to accept the loans through Web Advisor. You will also need to complete the electronic Multi Year Master Promissory Note and online Entrance Counseling Session if they are not already on file in our office. If you are not sure if you have completed these documents, please review the My Documents screen on Web Advisor.
How do I apply for a Parent Plus Loan?
You apply for a Parent Plus Loan by completing the Free Application for Federal Student Aid (FAFSA). Once Sinclair receives the results of your FAFSA application and any additional documents that we may request, we will complete your financial aid file and offer a Parent Plus loan, if you qualify. You will need to accept the loan through Web Advisor and then have your parent complete the Parent Loan Application available on our website. We are required to determine if the parent qualifies for the Parent loan through a credit check process. If the parent borrower is approved, we will notify your parent to complete the electronic Parent Promissory Note. If the parent borrower is denied the loan, we will remove the Parent Plus Loan from your financial aid package and repackage your financial aid to include the Unsubsidized Loan. You will need to accept the Unsubsidized Loan through Web Advisor before the funds will be available for tuition, fees, books and/or living expenses.
How will I receive the loan money?
Once we have received notification from the
**If you are new to Sinclair and new to the student loan program, your first disbursement will not be applied to your student account until the 31st day of the quarter. Sinclair will provide temporary funds to help pay tuition, fees and, if authorized, books. When we receive the federal loan money, the temporary funds will be reimbursed and any remaining loan money will be refunded to you. If you withdraw from all of your classes before the 31st day, the loan disbursement will be cancelled and you will owe any temporary funds that were used.
Can I increase or reduce the loan amount offered?
No, you cannot increase the amount offered because it will be the maximum amount allowed by the federal regulations.
Yes, you can reduce the amount offered to a minimum of $200. If you want to reduce the loan, please complete the Change of Award Form and return it to our office. Please keep in mind that you will still need to accept the loan through Web Advisor but you can wait until the amount is reduced.
Can I cancel my loan?
You can cancel any pending disbursements that have not already paid toward tuition, fees, books and/or living expenses. Any loan money that has already paid these expenses cannot be cancelled. If you receive a refund check, you can return it to the Bursars office to have the money returned to the federal government to reduce your loan debt. You cannot have the loan canceled because you didn’t like the education, didn’t get a job in your field of study or because you’re having financial difficulty.
What is the Exit Counseling Session?
The exit counseling session should be completed before you leave school to make sure that you understand your rights and responsibilities as a borrower. We will send you notification about completing the exit counseling session. You will also receive information about repayment and notification of the date your loan repayment begins (usually six months after you graduate, completely withdraw, or drop below 6 credit hours). This information may come from Sinclair or from the
What is deferment?
A deferment is a period of time during which no payments are required and interest does not accrue on subsidized loans. Receiving a deferment is not automatic. You must apply and continue making payments until your request has been granted. Failure to do so will cause you to become delinquent or to default on your loan. To qualify for a deferment, you must meet specific eligibility requirements determined by the
The most common deferment is an In-School Deferment which is based on enrollment for at least 6 credit hours at an eligible institution. Other deferments include:
- Service in the Peace Corps;
- Service under the Domestic Volunteer Service Act of 1973 (42 U.S.C. 4951); or
- Comparable service as a volunteer for a tax exempt organization of demonstrated effectiveness in the field of community service.
To see if you may qualify for these or any other deferments, you can go to www.dl.ed.gov or call the
Do I have repayment options?
After your grace period is over, you will be required to repay your student loans. Yes, there are several repayment options offered by the
- Standard Repayment – fixed amount over a period not to exceed 10 years
- Graduated Repayment – a low payment amount initially but gradually increases generally every 2 years.
- Extended Repayment – fixed or graduated payments over a period not to exceed 25 years.
- Income Contingent Repayment – a monthly amount based on how much money you make, how much you owe and family size. This plan is not available to parent borrowers.
For more information about these plans or to see if you qualify, please contact the
What is loan consolidation?
Student and parent borrowers can combine (consolidate) multiple federal student loans with various repayment options into one loan, making a single monthly payment. To learn more about consolidation loans, please go to www.dl.ed.gov or call the
Here are two examples of budgets at Sinclair Community College (these may change annually):
| BUDGET A Dependent | In-County 9 months |
| Tuition, Fees and Lab Fees | $1,620 |
| Books and Supplies | 1,080 |
| Transportation | 651 |
| Room and Board | 2,586 |
| Personal and Other | 1,272 |
| TOTAL | $7,209 |
| BUDGET B Independent | In-County 9 months |
| Tuition, Fees and Lab Fees | $1,620 |
| Books and Supplies | 1,080 |
| Transportation | 651 |
| Room and Board | 5,187 |
| Personal and Other | 1,272 |
| TOTAL | $9,810 |
