Federal Direct Loans For Undergraduates
The FCC Financial Aid Office encourages students to explore various grants and scholarship opportunities and to evaluate loan options carefully. Borrow only what is really needed and remember that loans must be repaid!
What is a Federal Direct Student loan?
Federal Direct Student loans are one form of student financial aid. Through the Federal Direct student loan program, students borrow money for college from the Federal government.
How much can I borrow at FCC?
- $5,500 is the maximum annual amount for which a first year student is eligible for, no more than $3,500 can be subsidized.
- $6,500 is the maximum annual amount for which a second year student is eligible for, no more than $4,500 can be subsidized.
- Independent students and students whose parent(s) are denied a Federal PLUS Loan qualify for up to an additional $4,000 unsubsidized loans.
What is the difference between a subsidized and an unsubsidized loan?
For the Federal Direct Subsidized Student Loan
, the federal government will pay the interest until you enter your grace period
; the time you are no longer enrolled on at least a half-time basis. Repayment of the principal and interest begins six months after you cease to be enrolled at least half-time (including leaves of absence). The interest rate for Federal Direct Subsidized Loans for undergraduate students for which the first disbursement is made on or after July 1, 2018 and before July 1, 2019 is currently 5.05%.
Please note: For all new borrowers who receive a loan on or after July 1, 2013 a 150% limitation is in effect. This means a student who is eligible for a subsidized loan will reach their subsidized limit at 150% of a program’s length of study. Once a student has reached their 150% limitation, their interest subsidy Loan limit will end on all outstanding loans that were disbursed after July 1, 2013, and interest will begin to accrue. Students are therefore encouraged to complete undergraduate study on a timely basis. Additional information regarding this new policy can be found on the following website. U.S. Department of Education
For the Federal Direct Unsubsidized Student Loan
, the government does not pay the interest while a student is in school (as it does for the subsidized loan). Interest accrues and must be paid or capitalized during periods of enrollment in school and/or deferment. The interest rate for Federal Direct Unsubsidized Loans for all students disbursed on or after July 1, 2018 is 5.05%.
Are there any federal loans available to parents?
The Federal Direct PLUS Loan (parent loan for undergraduate, dependent students) is a loan from the U.S. Department of Education for parents of undergraduate students who complete a FAFSA and meet general eligibility requirements. The interest rate as of July 1, 2018 on PLUS loans is 7.6%.
For information on how to apply for a Federal Direct PLUS Loan, please contact Financial Aid to obtain our application.
What fees, if any, are associated with these loans?
For student loans disbursed prior to October 1, 2018, an origination fee of 1.066% of the total loan will be assessed and automatically deducted. For PLUS loans disbursed prior to October 1, 2018, an origination fee of 4.264% will be assessed and automatically deducted. The origination fees will change on October 1, 2018 to 1.062% for student loans and 4.284% for PLUS loans disbursed through September 30, 2019. The net disbursement will reflect these fees; therefore, the amount credited to the student’s account will be less than the loan amount. This fee is determined by the U.S. Department of Education.
How do I apply for a Federal Direct Student loan?
Federal Direct Student Loan Process
- Step 1: Complete the financial aid process at FCC View printable Road Map for Financial Aid. The FAFSA is the first step to applying for any type of Federal student aid, including loans.
- Step 2: When your financial aid eligibility has been determined, you will receive an award letter which lists any grants or scholarships on the system, plus an "Est" (estimated) Federal Direct Student Loan Offer. The "Est" Loan is to advise you of your possible eligibility for loans at FCC. FCC does not endorse borrowing unless you have exhausted all other options to pay for College. However student loans are a form of federal financial aid that you have applied for when you completed your FAFSA application.
- Step 3: If you are interested in pursuing a student loan while attending FCC The 2018-2019 Loan Request Form will be available on your PeopleSoft "To Do List" The on line application must be submitted and you must complete a Federal Direct Master Promissory Note and Federal Student Loan Entrance Counseling on the government website www.studentloans.gov. Prior student loan debt, enrollment status, and degree program will affect your “actual” loan award at FCC. A loan can be denied on a case by case basis. If your loan request is not approved you will be notified in writing.
- Step 4: You must accept, reduce or decline your loan award through your PeopleSoft Self-Service. Additional items may be required throughout the application process. You should continue to monitor your "To Do List" and FCC email account. It may take several weeks for you to see your “actual” loan award on the system
- If you have attended other colleges prior to attending FCC, you will be asked to submit your transcripts for transfer credit before you loan will be processed.
- If you wish to reinstate a loan you have already declined or modify a loan you have already accepted, please contact our office.
Where can I learn more about the various federal student loan programs?
To learn more about the various federal student loan programs and about debt management visit:
Loan Exit Counseling
Loan Exit Counseling is required when you are graduating, leaving school, or drop below half-time enrollment (half-time enrollment is defined as at least 6 credits per term at FCC).
Exit Counseling prepares you for loan repayment and provides you with important details regarding your student loan rights and responsibilities and repayment plan options.
Completing Exit Counseling is a federal requirement. FCC requires that all students complete the on-line exit counseling session at https://studentloans.gov/myDirectLoan/counselingInstructions.action?counselingType=exit
Please contact Financial Aid as soon as you know you will be graduating, leaving school or dropping below half-time.