Federal Stafford Loans

What are Federal Stafford Loans?

The federal government offers both subsidized and unsubsidized Federal Stafford Loans. These low-interest loans were created to help students pay for their education. To be apply for a Federal Stafford Loan, you must first file the Free Application for Federal Student Aid, so SCC's Financial Aid Office can 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:

• 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; and
• 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, students who accept this type of federal loan are responsible for all interest that accrues during in-school, grace and deferment periods. Students may choose to make interest payments while in school or defer (and accumulate) the interest until repayment.

Note: Borrowing money for college is a serious financial obligation. Students are advised to not borrow more than they actually need.

Loan Terms and Conditions

Interest Rate: The Federal Stafford Loans are variable-rate loans, which are adjusted each July and capped at an 8.25 percent interest rate.

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

Loan Entrance Counseling Sessions: Students must attend a Loan Entrance Counseling Session before a loan application can be submitted if this is their first time applying for a loan at SCC. Session times are available on the Web site.

Loan Disbursement: Students will receive 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 a student drops below half-time attendance (Half-time attendance at SCC requires students to be enrolled at least six credit hours each term.)

Who is Eligible?

• Citizens, permanent residents of the U.S. 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 (six 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 or Federal Pell, SEOG, Perkins, subsidized or unsubsidized Stafford, SLS, PLUS, or Consolidation Loan; and
• Students who have satisfied all Selective Service Act requirements.

How to Apply

After accepting a loan online via MySCC, students must ensure that the following steps have been completed:

• Complete a Loan Entrance Counseling Session;
• Select a lender from the Lender Comparison List; and
• Submit a completed Master Promissory Note, which most lenders have an online version of on their Web site.

Important Reminders

• Keep copies of all loan-related paperwork.
• These are loans that 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 the Elm Resources Web site.
• To keep track of previous student loans or view your student loan history, visit the Web site for the National Student Loan Data System (NSLDS).
• Avoid defaulting on your loans at all costs. If you are unable to make timely payments, call your lender(s) 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 2.0 or is 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 SCC's Financial Aid Committee.
• Any student who has 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 (at least six credit hours per term) must see a Financial Aid Counselor for an Exit Interview.

Annual Subsidized Stafford Loan Limits

• Dependent students may be eligible for an additional $2,000 per year in unsubsidized Federal Stafford Loans, and independent students may be eligible for an additional $4,000 per year in the additional unsubsidized Federal Stafford Loans.
• Remember that this type of loan accrues interest upon disbursement, which you are responsible to repay.

Did you know?

Seminole Junior College was founded on July 1, 1965. The name was changed to Seminole Community College on July 1, 1975.