Loans

Federal Direct Loan Program
 

Stafford Loans

There are two types of Federal Stafford Loans:

• SUBSIDIZED—based on financial need; government pays interest while the student is enrolled for six or more credits.
• UNSUBSIDIZED—not based on need; interest accrues at 6.8% while student attends school.

Students may qualify for either of the above types of Stafford Loans, or a combination of the above.  To be eligible for the Stafford Loans, students must be enrolled for a minimum of six credits per semester.

To receive student loan funds at Hagerstown Community College, you must complete these three steps.  You will not receive loan funds if you do not complete ALL three steps listed below:
 

1. Complete the FAFSA at www.fafsa.gov [1]. When the FAFSA asks for a school code please enter 002074.
2. Complete the Entrance Counseling and the Master Promissory Note (MPN) at www.studentloans.gov.  You will need to sign into this site with your FAFSA PIN (Personal Identification Number).  We will receive notification that you have completed these items in 24 to 48 hours.
3. Sign the HCC Financial Aid Award Letter.  Your Award Letter will be available on WebAdvisor once your loan has been processed.  On WebAdvisor click on Financial Aid Award Letter and print.  Make any adjustments to your aid by correcting the award letter (decrease loan amounts, etc.) and submit to the Financial Aid Office.  

Your aid will not be disbursed until all three steps are completed.

Awarding for the Federal Stafford Loans will be as follows:
•    Freshman students will be awarded $5500 ($3500 subsidized/$2000 unsubsidized). 
•    Sophomore students, who have completed at least 30 credit hours, will be awarded $6500 ($4500 subsidized/$2000 unsubsidized). 

Loans are usually distributed evenly between the fall and spring semesters.   There will be two disbursements of the Stafford Loan per semester.
•    The first disbursement: four or five weeks after the semester begins and instructors have confirmed attendance.
•    The second disbursement: approximately one month after the first disbursement (approximately 7.5 weeks after the semester begins)
Students are notified by email regarding the disbursement schedule. 

To track the progress of your current Federal Direct Stafford Loan go to Federal Student Loan Servicing. [2]
To track your Federal Financial Aid history go to the National Student Loan Data System [3].

For information about repaying your Student Loans that you can print for reference later, go to the Quick Reference Guide on Repaying Student Loans [4].

 

Parent Loan for Undergraduate Students (PLUS)

Parent loans are designed for parents who want to borrow to help pay for their dependent children’s educational expenses.  Parent borrowers generally must begin repaying the principal and interest within 60 days after the loan is completely disbursed.

Students and parents wishing to apply for education loans must meet all requirements for Federal Financial Aid, complete the FAFSA, and complete a PLUS Borrower Information sheet, available on our Forms Page. [5]

Do you have Stafford Loan debt from more than one lender?

If you have borrowed loans from HCC in the past and plan to borrow for 2010-11, you will have at least two lenders and will have to make more than one loan payment per month when you graduate or drop below half-time enrollment.  You may wish to consolidate your Federal student loans in order to reduce the number and amount of student loan payments that you must make per month.

A federal consolidation loan may help make payments more manageable for some by combining several federal student loans into one loan with one monthly payment.  You need to apply for loan consolidation and choose a standard, an extended, a graduated, an income-contingent (for Direct Consolidation Loans) or an income-sensitive (for FFEL Consolidation Loans) repayment plan.  Depending on the amount of your debt, standard and graduated repayment plans have 10 to 30-year repayment periods.
 

The interest rate for both Direct and FFEL Consolidation Loans is a fixed rate for the life of the loan.  The fixed rate is based on the weighted average of the interest rates on all of the loans you consolidate, rounded up to the nearest one-eighth of 1 percent.  However, the interest rate will never exceed 8.25 percent.
 

How can consolidation help me manage my debt?

 Loan consolidation can offer you benefits to help manage your education debt.  You can:

• Make lower monthly payments by increasing the repayment period (However, this will increase the total amount you repay over the life of your loan).
• Make a single monthly loan payment on one bill to one lender.

Is there a downside to consolidation?

Although consolidation can help many students manage their monthly payments, there are some cases when consolidation may not be right for you.

• You may lose certain benefits (such as cancellation benefits, interest subsidies, etc.) that were offered on the loans being consolidated.
• If you are close to paying off your student loans, it may not make sense to consolidate or extending the years of repayment for your loans, you may be increasing the total amount you have to pay in interest.

Please note: the SFAO communicates with you mainly via e-mail, so please provide us with an e-mail address that you check frequently.