Student Loans
When scholarships, grants, and family contributions are not enough to cover the cost of attending community college, you have the option of applying for a student loan. A student loan is money you borrow that you must repay with interest; however, it usually carries lower interest rates than other types of loans.
Student loans come from the federal government or from private sources such as a bank. Student loans from the federal government usually have better benefits than private loans. When taking out a loan, it’s essential to know who you are borrowing from and the terms and conditions of the loan.
Federal Student Loans
When you apply for financial aid through your college, you’ll need to complete the Free Application for Federal Student Aid (FAFSA). As part of your financial aid package, you may be offered a federal student loan.
To be eligible for federal student loans, students must generally be enrolled at least half-time (6 credits or more). For students enrolled less than full-time in a term-based program, annual federal loan limits may be reduced based on enrollment status. Your loan eligibility may depend on your enrollment intensity, grade level, dependency status, financial aid eligibility, and remaining loan eligibility.
The amount of Direct Subsidized Loan funding you may receive is also limited based on your grade level. Your actual loan eligibility may be lower than the maximum amount based on your individual circumstances.
Here are the types of federal student loans available to you:
Direct Subsidized Loan
This loan is available to help you cover your educational costs when you demonstrate financial need. The government pays the interest the loan generates while you are enrolled in school and maintain part time enrollment, saving you money.
Direct Unsubsidized Loan
Eligibility for this loan is not based on financial need. However, the government does not pay the interest charges, which start accruing the moment you receive the funds and continue until the loan is paid off. You have the option of paying the interest while in school; otherwise, it continues to accumulate and add to your loan, and by the time you graduate or leave school, you will owe more money than you borrowed.
Direct Plus Loans
Your parents can help you pay for college by taking out a Federal Direct Plus Loan. Plus loans are based on your parents’ credit and their ability to pay back the loan. The maximum amount of funds available to be disbursed is based on your cost of attendance. Plus loans begin repayment 60 days after the loan has been fully disbursed. Interest on Plus loans begins from the time the loan is disbursed until it is paid in full.
Note: Not all of our colleges offer Direct Plus loans. Contact your college to confirm its participation in the Direct Plus loan program.
Requesting Additional Direct Unsubsidized Loan Funds
If your financial aid does not cover your educational expenses and you need additional federal loan funding, you may be able to request additional Direct Unsubsidized Loan funds, up to your remaining annual eligibility.
To request a loan increase:
- Log in to your Student Center.
- Select My Student Forms.
- Select Financial Aid Forms.
- Complete the AY27 Award Revision Form.
- Select Loan Increase option and enter the additional loan amount you are requesting.
- Review and submit the form for processing.
Before requesting additional borrowing, create a budget and determine how much you actually need. Remember that unsubsidized loan interest accrues while you are in school, so borrowing more than necessary can increase the total amount you repay.
Accepting Your Student Loans
Once your financial aid award is available, you can log in to your Student Center to review and accept your student loans.
If you are accepting a federal Direct Loan for the first time, you will generally need to complete:
- Loan Entrance Counseling
- Master Promissory Note (MPN)
You will be prompted to complete these requirements when applicable. You can also access federal student loan information through Federal Student Aid.
Private Student Loans
If you are not eligible for a federal loan, you may decide to take out a private loan with a bank or other financial institution. When doing so, be sure to pay attention to the interest rate, loan fees, and repayment terms.
Note: Not all of our colleges offer private student loans. Contact your college to confirm its participation in the private loan program.
Before Borrowing Additional Money, Do Some Financial Planning to See if it Makes Sense
Direct costs are what you pay the school: tuition, fees, and books.
Indirect costs are considered living expenses, such as transportation, room and board, and personal expenses.
Both direct and indirect costs make up your Cost of Attendance (COA). Financial aid can only be awarded up to your Cost of Attendance budget.
For more information on your COA budget, go to your Shopping Sheet link located on your Award page in your Student Center
Compare your expenses against your income to see if you really need to take out a loan.
In creating a budget, make two lists — Income versus Expenses. Add up your direct and indirect expenses. Then add up your income. Compare the two.
After reviewing your income and expenses, if you will experience a shortfall, requesting additional funds through an unsubsidized loan is an option.
Need budgeting tips? Watch this helpful budgeting video.
Repaying Your Federal Loans
Eventually, you’ll need to begin repaying your loans. When you graduate, enroll for less than six credit hours, or withdraw from school, you have 180 days (six months) before you start paying back your student loans. Your loan servicer will provide you with repayment information, including your first payment due date.
To determine which repayment plan best suits you and calculate your potential payments, visit the Department of Education's Federal Student Aid site.
Keeping Your Loan in Good Standing
Failing to make payments on your loan can result in you defaulting on it, causing serious financial consequences. If you are having trouble making your loan payments or are close to defaulting, contact the Financial Aid office or your loan servicer immediately for assistance. Both can help you understand your options for keeping your loan in good standing.