Federal Stafford Loans

What are Federal Stafford Loans?

The Federal Government offers both Subsidized and Unsubsidized Federal Stafford Loans. These are low interest loans created to help you pay for your education.

• You must first file the Free Application for Federal Student Aid in order for the Financial Aid Office at your school to determine which loan type(s) you are eligible for.

The Subsidized Federal Stafford Loan is based on financial need which is determined by using a federal formula. A loan is "subsidized" when the government pays the interest for you during the following periods:

• while you are enrolled in school at least half-time
• during the six month grace period after you stop attending school at least half-time
• during periods of authorized deferment

The Unsubsidized Federal Stafford Loan is not based on financial need and is available to all students regardless of income. Because this loan is not subsidized by the government, the student is responsible for all interest which accrues during in-school, grace and deferment periods. You may choose to make interest payments while in school, or you may defer (and accumulate) the interest until repayment.

• Borrowing money for college is a serious financial obligation. Do not borrow more than you actually need.

Terms and Conditions of the Loan
Interest Rate: You are applying for a variable rate loan, adjusted each July, capped at 8.25 percent.

Processing Fees: Two types of loan fees are deducted from each loan check. The U.S. Department of Education charges a 3 percent origination fee, and the loan guarantor charges up to 1 percent for a guarantee fee.

Loan Entrance Counseling Sessions are required before a loan application can be submitted if this is your first time applying for a loan at SCC. Sessions are available on the Web.

Loan Disbursement: You will receive your loan proceeds in two installments called "disbursements" beginning shortly after the add/drop period each term.

* These checks will be mailed to the students.

• First-time, first year undergraduate borrowers will have the initial disbursement of their loans made 30 days after the first day of classes. All subsequent disbursements will be made as scheduled.

Repayment: The principal repayment period begins automatically six months after you drop below half-time attendance.**

** Half-time attendance at SCC requires at least 6 credit hours each term.

Who is eligible?

• Citizens, permanent residents of the US, or permanent residents of an eligible trust territory;
• Students who are enrolled in an eligible program of study at SCC on at least a half-time basis (6 credit hours each term);
• Students who are meeting the Standards of Satisfactory Academic Progress for financial aid recipients at SCC;
• Students not currently in default, or do not owe a refund on any Title IV Program: Federal Pell, SEOG, Perkins, Subsidized Stafford, Unsubsidized Stafford, SLS, PLUS, or Consolidation Loan;
• Students who have satisfied all Selective Service Act requirements.

How to apply?

After you accept your loan online on MyScc you must ensure that the following steps have been completed:

• Complete a Loan Entrance Counseling Session
• Select your Lender from the Lender Comparison List
• Complete Your Master Promissory Note - most lenders have an online version on their website.

Important Reminders:

• Keep copies of all paperwork;
• These are loans which must be repaid! Repayment is expected even if you are unable to find a job in your field, believe your school owes you a refund, or are displeased with your education and don't complete the program;
• Notify your lender or current holder of your loan of any changes in your name, address, phone number, enrollment status, or if you transfer to another school;
• To view the status of current Loans, visit www.elmresources.com & sign up for student.
• Keep track of previous student loans, or to view your student loan history visit www.nslds.ed.gov.
• Avoid default at all costs. If you are unable to make timely payments, call your lender immediately. They will be able to explain all your options and work with you to protect your credit rating until you are able to resume your normal payment schedule.

SCC Debt Management Policies

• Loans will not be approved for any former or transfer student whose cumulative GPA is less than a 2.0, or on financial aid suspension. When suspension is cleared, the student may then be reconsidered for a loan;
• Students who have attempted 90 hours and have not received their degrees (A.A. or A.S.) will no longer be considered to be making satisfactory academic progress unless they submit written explanation which must be approved by the Financial Aid Committee;
• Any student who previously defaulted on a student loan will not be approved for another loan at SCC unless the defaulted loan is paid-in-full.
• Students who drop below half-time enrollment (6 credit hours) must see a Financial Aid Counselor for an Exit Interview.

Annual Subsidized Stafford Loan Limits:

• Independent students may be eligible for an additional $4,000 per year in the Additional Unsubsidized Federal Stafford loan.
• Remember that this type of loan accrues interest upon disbursement, which you are responsible to repay.