Federal Direct Stafford Loans

Your financial aid award may include federal student loans. It is important to note that whatever amount you borrow must be paid back with interest. While loans can be a good investment in your future, taking out a federal student loan is a serious obligation.

 

When does the loan have to be repaid?

How do I qualify for a Direct Stafford Loan?

How do I apply for the Direct Stafford Loan?

How much can I borrow?

When and how will the loan funds be disbursed?

What if I drop below half-time?

What if I completely withdrawals from my program of study?

Enrollment status & other changes

Entrance and Exit Loan Counseling Requirements

 
Direct Loan Access

The following Federal Direct Loan resources are available to help you complete the loan process. You will be redirected to the U.S. Department of Education website. You will need your Federal Student Aid (FAFSA) Pin# to access these sites.

Federal Direct Stafford Loan  

click this link to complete and sign the electronic Master Promissory Note (E-MPN) under Manage My Direct Loans

Entrance Loan Counseling

click this link to complete Entrance Loan Counseling under Manage My Direct Loans

Exit Loan Counseling

click this link to complete Exit Counseling requirements

Loan Repayment

click this link to learn more about loan repayment options under Managing Repayment

Direct Loan Servicing

click this link to access your Direct Loans online with the Department of Education
National Student Loan Data System (NSLDS) click this link to access your student aid history. You may view your Pell Grant and student loan history from all institutions.

**Mac users must use FireFox to access and navigate the U.S. Department of Education website under Manage My Direct Loans**

Loan Counseling [Entrance and Exit Loan Counseling Requirements]

Entrance Counseling

The Department of Education requires all students to complete an online entrance counseling session prior to the first disbursement of their Federal Direct Stafford loans. In order to fulfill that requirement you must complete the questionnaire provided by the U.S. Department of Education. Click here to access the Department of Education website, sign in and complete the Entrance Counseling requirement under Manage My Direct Loans. The Department of Education will notify Savannah Technical College when the counseling requirement has been successfully completed.

Exit Counseling

The U.S. Department of Education requires all students to complete an exit counseling session when they are no longer enrolled at least half-time. In order to fulfill that requirement you must complete the exit questionnaire provided by the U.S. Department of Education. Click here to access the Department of Education National Student Loan Data System (NSLDS) website, sign in and complete the Exit Counseling requirement. You will be able to access your entire student loan history, review your current loan debt, identify the holder of your loans, and much more. The Department of Education will notify Savannah Technical College when the exit counseling requirement has been successfully completed.
 

http://www.direct.ed.gov/student.html

  1. This is a LOAN and must be repaid.
  2. The lender is the Department of Education.
  3. There are two types of Direct Stafford Loans:
    • Subsidized Loan – this is a need-based loan. The government pays the interest while you are enrolled in school at least half-time (6 credits). Current interest rate is 3.4% for undergraduate direct loans disbursed between 07/01/11- 06/30/2012.
    • Unsubsidized Loan – this loan is NOT need-based. You are responsible for the interest. Interest rate is fixed at 6.8% for loans disbursed after 07/01/2006. 
      • You have the option to pay the interest while in school (best option) or
      • Defer or postpone interest payments until repayment (costs more in the long run as interest is capitalized – meaning, the interest is added to the principle at the point of repayment).
  4. The Department of Education automatically deducts a 1% Loan Fee from each disbursement.
  5. The Department of Education offers a 0.5% upfront rebate. To receive this rebate, you must make the first 12 consecutive monthly payments on time or the rebate will be added back to the loan balance.

http://www.direct.ed.gov/RepayCalc/dlindex2.html

  1. Repayment begins six months after you cease to be enrolled at least half-time (minimum six credits) in an eligible program (whether student drops, graduates, completely withdraws, transfers, or stops attending class).
  2. You have several repayment options:
    • Standard Plan – up to 10 years to repay – set payment amount each month. Best option as loan is paid off more quickly and less interest accrues.
    • Extended Repayment – only available for those with more than $30,000 in loan debt. Allows you to extend repayment up to 25 years. The longer the repayment the more interest is paid (costs borrower more).
    • Graduated Plan – payments start out smaller and gradually increase every two years - still repaying within in 10-year period.
    • Income Contingent – Each year, monthly loan payments are based on adjusted gross income, family size, and total amount of loan debt – maximum repayment period is 25 years.
    • Income Based – this program caps the required monthly payment at an amount intended to be affordable based on income and family size. Under certain circumstances, students may qualify for loan forgiveness after 25 years of repayment. If struggling financially, this may be the best option of all extended payment plans.
  http://www.direct.ed.gov/applying.html
  1. You must complete the Free Application for Federal Student Aid (FAFSA) form each year in order to qualify. http://www.fafsa.ed.gov/ – Savannah Technical College School Code: 005618
  2.  This is a federal entitlement program. Therefore, prior credit history does not affect eligibility. 
  3. Generally, if you are eligible for a Pell Grant will also qualify for the Direct Loan Program.
  4. If you do not qualify for the Pell Grant due to higher income levels (as determined by the FAFSA) or a prior bachelor's degree, but meet all other requirements, you will qualify for a Direct Loan. The income level will determine whether you qualify for the Subsidized and/or Unsubsidized loan. 
  5. You must be enrolled at least half-time (minimum of six credits) in coursework leading to the completion of an approved program of study.
  6. You must be making Satisfactory Academic Progress (SAP). That is, you must have a cumulative grade point average of 2.0 AND must successfully complete a minimum of 67% of attempted coursework (see catalog or website for details).
  7. You must use these funds for educational related expenses only (for example: tuition, fees, books/supplies, transportation, child care, other incidental fees, and expenses).
  8. You must complete the Department of Education online Entrance Counseling before funds may be disbursed the first time at STC.
  9. You must complete the Department of Electronic Education Master Promissory Note (E=MPN) before funds will be disbursed the first time at STC.
  10. The Department of Education requires a 30-day delay in the first disbursement for all first-time borrowers.

 Back to the top

  1.  You must complete the FAFSA and the results must be received by Savannah Technical College’s Financial Aid Office and 
  2. You must complete, sign, and submit to the Financial Aid Office the Federal Direct Stafford Loan Request Form indicating the amount of loan you wish to borrow.
  3. You must complete the Department of Education online Entrance Counseling at https://studentloans.gov/myDirectLoan/index.action
  4. You must complete the Department of Education online Electronic Master Promissory Note (E-MPN) at https://studentloans.gov/myDirectLoan/index.action
  5. The Financial Aid Office will send a revised Award Notification to your Savannah Tech email address when the loan has been originated (submitted to the DOE for processing).
You will request ONE loan for the year that will be disbursed evenly over each semester.
  
The annual maximum that you may borrow depends on the lesser of:
  1. The Cost of Attendance for the period of enrollment (spring/summer vs. fall/spring/summer).
  2. The annual maximum determined by the DOE based on your year in school and dependency status (see chart below).
  3. The aggregate maximum determined by the DOE (see chart below).
  4.  The amount you request.
You are encouraged to borrow smart – Limit your borrowing - Only borrow what you need for educational expenses.
 
We encourage you to seek employment or other outside resources before applying for a loan. Loans should be used as a last resort.
 
Annual
Maximum
Base Loan Amount
May be Subsidized and/or Unsubsidized
Additional
Unsubsidized
Maximum
Combined
Annual Limit
Aggregate Maximums
Dependent
Freshman
$3,500
$2,000
$5,500
$31,000 Total Maximum of $23,000 in Subsidized Loan
Sophomore
$4,500
$2,000
$6,500
Independent
Freshman
$3,500
$6,000
$9,500
$57,500 Total
Maximum of $23,000 in Subsidized Loans
Sophomore
$4,500
$6,000
$10,500
 
  1. You will borrow ONE loan each year. The loan will cover the semesters for which you are enrolled. The loan(s) will be distributed equally over each semester. If you are not enrolled, any pending disbursements will be canceled.
  2. The loan funds will be wired to the school from the DOE approximately 14-days after the semester begins.
    • The Department of Education requires a 30-DAY DELAY in the first disbursement for ALL FIRST TIME BORROWERS.
    • All loans must be disbursed in multiple disbursements. Therefore, loans processed for a single term will be made in two disbursements with one disbursement 14-days after the semester begins and the second disbursement at the mid-point. You must meet all eligibility criteria at the mid-point to qualify for the subsequent disbursements.
  3. Once the funds are received from the DOE, the financial aid office will again review your continued eligibility by confirming: 
    • Enrollment in at least six credits and 
    • SAP
  4. Once the funds are received from the DOE and eligibility confirmed the Financial Aid Office will send you a disbursement notification to your SavannahTech.edu email address.
    • The DOE will also send you a notice of disclosure that will include the details of your loan (loan period, scheduled disbursement dates/amounts, repayment terms, interest rate, name of loan servicer, etc.).
  6. Once confirmed, the funds will be applied to your student account. The loan funds will be applied first toward any outstanding tuition and mandatory fees for the current term, up to $200 in tuition and mandatory fees from a prior term. In addition, if provide written authorization, any other incidental charges (books/supplies, library fines, parking fines, etc) may be deducted from the loan payment.
  7. If you borrow more than is needed to cover direct costs, an excess payment (credit balance) will occur. If you have a credit balance, the Business Office will issue/send a refund for the excess payment within 14-days of when the funds were received. 

 Keep in mind; refunds are issued approximately 28 days into the semester. For first-time borrowers with a 30-day delay in disbursement, this will be approximately 45-days into the semester.

 
 

Before funds may be disbursed, the Financial Aid Office must confirm your enrollment. If you drop below half-time after a disbursement is made, the Financial Aid Office is required to send and you must complete Exit Counseling materials, within 30-days. The Exit Counseling materials is to ensure you are aware of your rights and responsibilities as a student loan borrower.

Important Note: It is imperative that you consult with the Financial Aid Office if you drop from any of your courses. 

 
 The Financial Aid Office is required to calculate, within 30-days of your withdrawal, the percentage of earned federal aid as determined by the Federal Return of Title IV Funds regulations. The earned amount is based on the number of days you were enrolled in for the semester. The school is required to return any unearned federal and state aid to the original source. Loan funds are returned first to the DOE, then any unearned Pell Grant.
 
The DOE requires that the Financial Aid Office send you Exit Counseling materials, within 30-days, to ensure you are aware of your rights and responsibilities as a student loan borrower and report to the Department of Education that you are no longer enrolled.

 

Important Note: It is imperative that you consult with the Financial Aid Office if you drop from your program of study.

 
You have six months before repayment begins. Be sure to notify the Financial Aid Office as well as your Direct Loan servicer of your change in enrollment status.
 
 It is important that you keep both the DOE Loan Servicer and the STC Financial Aid Office aware of any changes in your status. It is your responsibility to notify the Loan Servicer AND Financial Aid Office if:
  • There is a change in your local address, permanent address or telephone number or email address;
  • A change in your name (for example, maiden name to married name);
  • You do not enroll at least half-time for the loan period certified by the school;
  • You do not enroll at the school that certified your loan;
  • You stop attending school or drop below half-time enrollment
  • You transfer from one school to another school; or
  • You graduate.
 
To ensure you fully understand your obligation as a student loan borrower, please carefully read the U.S. Department of Education Direct Loan Student Borrower Rights and Responsibilities Statement.