The Federal Loan Program
Loan Processing Fees
Direct Subsidized Loan Time Limitation
Borrowing Limits
BAS Borrowing Limits
Repayment
Direct Loan Application Process
Direct Loan Contact Information
Alternative Loans
Code of Conduct
The Federal Direct Loan Program
To determine eligibility for federal student loans, you must first apply for financial aid with the Free Application for Federal Student Aid (FAFSA). You will use the same FSA ID Username and password to complete your FAFSA, Direct Loan Master Promissory Note (MPN), and Entrance Counseling. Click here to create an FSA ID Username and password. For more information about the FSA ID, please click here.
The Direct Loan Program offers two types of low interest, fixed rate loans for student borrowers: Direct Subsidized Loans and Direct Unsubsidized Loans. Both have a fixed interest rate, with a cap of 6.8 percent (rates are set by Congress and subject to change). The subsidized and unsubsidized loans both require the student be registered in at least six degree-required credits. The average amount that students borrowed at CBC during the 2014-2015 academic year was $5,499.
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 contribute toward your education costs. Your cost of attendance minus your expected family contribution establishes your financial need.
Direct Unsubsidized Loans
With a Direct Unsubsidized Loan, you are responsible for interest payments, even while you are in school. You can either 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 the cost of your education must exceed any other financial aid you have been awarded.
Direct PLUS Loans
Direct PLUS Loans are non-need based loans available to parents of dependent students to help with educational costs. Dependency status is determined by information on the student's FAFSA. The yearly maximum loan limit cannot exceed the total cost of attending CBC minus other financial aid awarded. The interest rate is 6.84 percent and is charged beginning on the date of your loan's first disbursement. Please visit https://studentloans.gov for more information about PLUS Loans and to apply.
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Loan Processing Fees
Federal Direct Loans are subject to origination fees. These fees offset administrative costs. Loan origination fees will be deducted from your loan proceeds prior to disbursement and you are responsible for the repayment of all such fees. For more information on Direct Loan interest rates and fees, click here.
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.
Borrowing Limits
The Direct Loan Program has limits on the amount you can borrow each year. The CBC Financial Aid office personnel will determine how much you are eligible to borrow.
Keep in mind that you may be repaying your Direct Loan for as long as 10 years. 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.
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Academic Grade Level/Loan Type
|
Maximum Loan Amount
|
|
First-Year
Undergraduates
|
Dependent
Student
|
Independent Student
or Dependent Student whose Parent is
Ineligible for PLUS Loans
|
|
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)
|
Bachelor in Applied Science (BAS) Loan Borrowing Limits:
(Totals listed below are only for students accepted into a Bachelor in Applied Science (BAS) program.)
|
Dependent
Student
|
Independent Student
or Dependent Student whose Parent is
Ineligible for PLUS Loans
|
|
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)
|
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). Please go to https://studentloans.gov for information about repayment options. 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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The Application Process
To apply for a Direct Loan, you must complete all of the following steps: (Read all steps before you begin and apply for the correct academic year.) Please allow 30-45 days for your loan to be processed.
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Submit your
Free Application for Federal Student Aid (FAFSA) as soon after January 1 as possible for the upcoming school year. You will be sent an email to the email address you provided on your FAFSA which will contain all your additional steps. You can also access your Financial Aid Portal for additional information here. After notification that you have been offered grants or that you do not qualify for grants, proceed with the following steps:
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You must be enrolled in an eligible degree program and in at least six degree-required credits each quarter that you are requesting a loan.
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If you are a first-time borrower, complete the Entrance Counseling prior to applying for your loan. The purpose of the Entrance Counseling session is to help you understand your rights and responsibilities as a borrower so that you can properly manage your future indebtedness. To complete your Entrance Counseling go to
www.studentloans.gov. Click on the “Log In” button at the top of the webpage. You will be prompted to login using your FSA ID Username or email address and FSA ID Password. Once you are logged in, click on the “Complete Counseling” link and then choose “Entrance Counseling”. Read the information provided and follow the prompts to complete your Entrance Counseling.
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If you are a first-time borrower, or your Master Promissory Note (MPN) has or will expire soon, complete your MPN at
www.studentloans.gov. Click on the Subsidized/Unsubsidized link to fill out the MPN. Once you have completed your MPN, click on the Logout link in the top right of your screen.
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Complete, print, and submit the Direct Loan Request Form. **A maximum of two (2) loan requests will be accepted per academic year.
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You will be sent a Financial Aid Notification by email with the maximum amount you are eligible to receive or the maximum amount of your request, whichever is lower.
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Federal regulations require you to complete an Exit Counseling session at
www.studentloans.gov upon termination at CBC, whether you graduate or withdraw. This session will give you critical information about repaying your federal student loans.
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Contact Information
Contact information for Direct Loans:
Direct Loan Servicing Center
https://studentaid.ed.gov/
Alternative Loans
Alternative loans are non-need based private loans. Eligibility and loan criteria are determined by the lending institutions. When considering alternative loans here are some questions for your prospective lenders: What is your lowest interest rate and fee combination and how can I get it? Is the rate only for a limited period, or is it for the life of the loan? Is there a limit on how high the variable rate can go? How often is the interest rate adjusted, and how is it determined? What interest rate can I get on a fixed-rate loan? How long will I be repaying the loan? Is there any penalty for paying it off early? What proportion of your borrowers get the discounts you offer? Are your discounts guaranteed or are they subject to change later?
Student Loan Code of Conduct Objective and Responsibilities
In concert with federal regulations, CBC's Code of Conduct for educational loans prohibits the following:
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