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Federal Direct Loan Program (DL)

(Consumer Information Disclosure)

The William D. Ford Loan Program offers low-interest loans to eligible students through the Title IV program which is administered by the United States Department of Education and they are the lender.  Loans must be repaid even if the student doesn’t complete the education, can’t find a job related to the program of study, or is unhappy with the education paid for with the loan.  The priority loan application deadlines are:
                      Fall – November 1st
                      Spring – April 1st
                      Summer – July 1st 

LOAN TYPES
There are 3 Direct Loan types available at IECC through the Department of Education:

1)  Direct Stafford Subsidized Loan – For eligible IECC students who demonstrate financial need. 
2)  Direct Stafford Unsubsidized Loan – For eligible IECC students who may or may not demonstrate a financial need.
3)  Direct PLUS Loan – For eligible parents of an IECC dependent student. Eligibility is not based on financial need, but a credit           check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.

REQUIREMENTS
See Financial Aid 101 in the navigation menu on the left to review general Title IV eligibility requirements.  
In addition to the general eligibility requirements, the student who has never received a Direct Loan from the Federal Government is required to complete loan counseling.  (See the navigation menu on the left.)  
If determined eligible for a direct loan, students (for Stafford loans) and parents (for PLUS loans) are required to complete an online Loan Agreement / Master Promissory Note (MPN). This is a legal document in which the borrower promises to pay the loan, accrued interest, and fees to the U.S. Department of Education.  Terms and conditions are also explained. 
See Loan Repayment in the navigation menu on the left for information and requirements pertaining to repayment of loans. 

NOTICE
34 CFR Section 668.202(e)(1) of the Federal Direct Loan (DL) Program provides that a
 school may refuse to certify a DL Stafford or PLUS loan application or may reduce the borrower’s determination of need for the loan if the reason for that action is documented and provided to the student in writing (provided the determination is made on a case-by-case basis).  All previous borrowing of student loans and total debt will be reviewed prior to certification of future loans.



DIRECT STAFFORD LOAN PROGRAM (SUBSIDIZED AND UNSUBSIDIZED)
 
Students must complete the FAFSA in order to apply for this loan.  

Direct Stafford Loan Amount
The maximum a dependent Freshman level student may borrow is $5,500 (up to $3,500 of this can be from subsidized loans). 
The maximum a dependent Sophomore level student may borrow is $6,500 (up to $4,500 of this can be from subsidized loans). 
The maximum an independent (or dependent student whose parents were not eligible for a PLUS loan) Freshman level student may borrow is $9,500 (up to $3,500 of this can be from subsidized loans).
The maximum an independent (or dependent student whose parents were not eligible for a PLUS loan) Sophomore level student may borrow is $10,500 (up to $4,500 of this can be from subsidized loans).

Direct Stafford Loan Fee
There is a loan fee which is deducted from each loan disbursement.  The fee is a percentage of the loan amount and varies depending upon when the loan was first disbursed, as follows:
           1.062% for loans disbursed on or after October 1, 2018 and before October 1, 2019
           1.066% for loans disbursed on or after October 1, 2017 and before October 1, 2018

Direct Stafford Loan Interest Rates (fixed):
           5.05% for loans disbursed on or after July 1, 2018 and before July 1, 2019
           4.45% for loans disbursed on or after July 1, 2017 and before July 1, 2018

Additional information regarding Stafford loans is available at the Federal Student Aid website by clicking here.          



DIRECT PLUS LOAN PROGRAM (PARENT LOAN)
Although completion of the FAFSA is not required for a parent to receive a Federal Direct PLUS loan, the Financial Aid Office strongly encourages all student to file the FAFSA.  Parents wishing to apply for this loan should complete IECC's Parent PLUS Loan Request Form (see Forms in the navigation menu on the left) and return it to the college of attendance.    
Direct PLUS Loan Amount
The maximum a parent may borrow is equal to the the cost of attendance (as determined by IECC) minus any other financial assistance received.

Direct PLUS Loan Fee
There is a loan fee which is deducted from each loan disbursement.  The fee is a percentage of the loan amount and varies depending upon when the loan was first disbursed, as follows:
           4.248% for loans disbursed on or after October 1, 2018 and before October 1, 2019
           4.264% for loans disbursed on or after October 1, 2017 and before October 1, 2018

Direct PLUS Loan Interest Rates (fixed):
           7.6% for loans disbursed on or after July 1, 2018 and before July 1, 2019 
           7.0% for loans disbursed on or after July 1, 2017 and before July 1, 2018

Additional information regarding PLUS loans is available at the Federal Student Aid website by clicking here.

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