Southwest Texas Junior College will participate in the William D. Ford Federal Direct Loan (Direct Loan) Program beginning July 1, 2010. Students and parents who previously received loans through the Federal Family Education Loan (FFEL) Program will now borrow through the Direct Loan Program. The Direct Loan Program offers the same types of loans as the FFEL Program and Direct Loans generally have the same terms and conditions as FFEL Program loans, but instead of a bank lending the money, the U.S. Department of Education (the Department) lends the money directly to students and parents through the student’s school. There are also some differences in the names of the loans. The FFEL Program’s Federal Stafford Loans (subsidized and unsubsidized) are called Direct Subsidized Loans and Direct Unsubsidized Loans in the Direct Loan Program. Federal PLUS Loans are called Direct PLUS Loans.
SWTJC looks forward to participating in the Direct Loan Program and offering the benefits of Direct Loans to our students. For additional information about Direct Loans, visit www.direct.ed.gov/student.html or contact the Student Financial Aid Office at (830) 591-7368.
Direct Subsidized Loan
Federal Direct Subsidized Loans are available to students who meet certain financial need criteria and are enrolled in at least 6 semester hours. If you qualify for this type of loan, the federal government will pay the interest on the loan while you are in school, during a six-month grace period after you leave school or fall below half-time enrollment, and during period when you are authorized to defer your loan payments.
Direct Unsubsidized Loan
Federal Direct Unsubsidized Loans are available to students enrolled in at least 6 semester hours, regardless of their financial need. You are responsible for the interest that accumulates on an unsubsidized loan while you attend school, during the grace period and during any periods when you are authorized to defer your loan payments. You have the option to pay the interest during these periods or postpone payment. If you postpone payment, the interest will be added to your principle balance. This addition of interest to your principle balance is known as capitalization.
Direct Loan Annual Limits
Federal law specifies annual loan limits on Direct Loans based on your year in college and your dependency status.
If you are a dependent undergraduate student, you can borrow up to the following amounts each year for loans disbursed on or after July 1, 2008:
- $5,500 if you are a first-year student enrolled in a program of study that is at least a full academic year (up to $3,500 may be borrowed in subsidized loans).
- $6,500 if you are a second-year student enrolled in a program of study that is at least a full academic year. (up to $4,500 may be borrowed in subsidized loans.)
If you are an independent undergraduate student or a dependent student whose parents are unable to obtain a Federal PLUS loan, you may be able to borrow up to the following amounts each year:
- $9,500 If you are a first-year student enrolled in a program of study that is at least full academic year (up to $3,500 may be borrowed in subsidized loans).
- $10,500 if you are a second-year student enrolled in a program of student that is at least a full academic year (up to $4,500 may be borrowed in subsidized loans).
Direct Parent Loans (PLUS)
PLUS loans are available to credit-worthy parents of undergraduate students enrolled in at least 6 core semester hours. PLUS loans are available without regard to financial need. PLUS interest is fixed at 7.21% and parents may borrow the cost of education minus any aid the child is receiving in their own name.