Federal Direct Stafford Loan
Federal Direct Stafford Loans are low interest educational loan available to college students who are enrolled at least half time (6 credit hours at OCCC), are pursuing a degree, are making Satisfactory Academic Progress, and meet other basic eligibility requirements. The lender is the U.S. Department of Education rather than a bank or other lending institution. There are two types of Federal Direct Stafford loans: subsidized and unsubsidized.
Direct Subsidized Stafford Loans are a need based student loan. OCCC Financial Aid Office determines financial need by taking the Cost of Attendance minus the Expected Family Contribution. The U.S. government pays the interest (or subsidizes) the interest on the loan while you are enrolled at least half time and during periods of deferment. The Direct Subsidized Stafford Loan interest rate for undergraduates on loans first disbursed on or after July 1,2014 and before July 1,2015 is 4.66%.
Students borrowing a Direct Subsidized Stafford Loan between 7/1/12 and 7/1/14 (two year period) should be aware that for this two year period the interest rate on these loans though in prior years was paid by the U.S. Department of Education while the borrower is in the six month grace period prior to beginning repayment will no longer be paid by the U.S. Department of Edcuation. Like the Direct Unsubsidized Stafford Loan the interest will accrue during grace periods. During deferment periods, the interest on Direct Subsidzied Stafford Loans will still be paid by the U.S. Department of Edcuation.
Early Alert: Students who are new (first time) borrowers of an Direct Subsidized Stafford Student Loan, even those who are current students in addition to those who are first time college students, on or after 7/1/13 will be under a maximum number of full time equivalent semesters of eligibility for Direct Subsidized Stafford Loans. Students enrolled in a two year academic program (associate degree) will be limited to six (6) full time equivalent semesters of Direct Subsdizied Stafford Loan. New borrowers of Direct Subsidized Stafford Loans on or after 7/1/13 who change their academic program, and transfer students, will have their semesters of Direct Subsidized Stafford Loans used in the calculation of the maximum semesters.
Direct Unsubsidized Stafford Loans are not based on financial need. You are charged interest from the time the loan is disbursed and you may either make or defer interest payments while you are in school. If you defer interest payments, the accumulated interest will be capitalized, or added, to the principal of the loan when you enter repayment. The Direct Unsubsidized Stafford Loan interest rate for undergraduates on loans first disbursed on or after July 1,2014 and before July 1,2015 is 4.66%.
Are we over burdening our students with debt?
2012 OCCC Graduates with Loan Debt
|Degree Type||Graduates||% Borrowing||Median Debt|
|Associate Degrees||465||37.4 %||$11,000|
Federal Direct Plus Loans
Direct Plus Loans are credit based unsubsidized loans available to the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest on the Direct Plus Loan is charged during all periods. The lender is the U.S. Department of Education. The Direct PLUS Loan interest rate for undergraduates on loans first disbursed on or after July 1,2014 and before July 1,2015 is 7.21%.
Private Loans are credit-based loans offered by banks or lending institutions with terms and conditions that vary from lender to lender. Usually, private alternative student loans have very different and more restrictive terms than federal student loans and are more expensive. Private Loans should only be considered after all federal student loans, grants, and scholarships have been exhausted.