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The Federal Direct Stafford Loan is available through the William D. Ford Federal Direct Loan Program to help pay for educational expenses. South’s Financial Aid Office awards Subsidized or Unsubsidized Loans, or a combination of both, based on financial need.

  • Subsidized vs. Unsubsidized

The differences between subsidized and unsubsidized Stafford loans:

Subsidized Stafford Loan

Unsubsidized Stafford Loan

Based on financial need

Not based on financial need

The federal government pays the interest on the loan while you are enrolled in school at least half-time (6 credits).

Interest begins accumulating as soon as funds are disbursed until the loan is paid in full. Accrued interest will be added to the balance of the loan. (You are not required to pay the interest while you are in school, but we recommend that you do.)

Undergraduate student fixed interest rates: 4.29 percent for loans disbursed on/after July 1, 2015

Undergraduate student fixed interest rates: 4.29 percent for loans disbursed on/after July 1, 2015

Origination fees:

  • 1.073 percent for loans first disbursed on/after Dec. 1, 2014
  • 1.068 percent for loans first disbursed on/after Oct 1, 2015

Origination fees:

  • 1.073 percent for loans first disbursed on/after Dec. 1, 2014
  • 1.068 percent for loans first disbursed on/after Oct 1, 2015

Repayment begins 6 months after graduation or fail to enroll in at least 6 required credits.

Repayment begins 6 months after graduation or fail to enroll in at least 6 required credits.

Students can borrow up to 150% of program length. If exceed, lose subsidy.

Students can borrow up to the maximum lifetime amount allowed.

Eligibility and How to Apply

Eligibility

  • Be a U.S. citizen or eligible non-citizen.
  • Have a high school diploma or GED.
  • Enroll or be accepted at South Seattle College.
  • Submit a financial aid application and demonstrate financial need as determined by federal, state, and institutional policies.
  • Enroll in an eligible program of study and take eligible courses. 
  • Meet Selective Service requirements, if applicable.
  • Not be in default on any federal student loan or owe a federal grant repayment.
  • Not be convicted for possession or sale of illegal drugs while receiving federal aid.
  • Make satisfactory academic progress:
    • Maintain a cumulative 2.0 or higher Grade Point Average (GPA) for SSC classes each quarter;
    • Successfully complete at least 67% of attempted credits; and,
    • Demonstrate progress toward finishing your declared degree or certificate within a 150% maximum time frame.

How to Apply

Submit:

  • 2014-15 Student Aid Report (SAR) – Complete at www.fafsa.ed.gov  - School Code: 009706
  • 2014-15 Financial Aid Data Sheet – Available online at
  • Any other paperwork required to complete your financial aid application, if applicable.
  • 2014-15 Loan Application Form

Complete:

  • Master Promissory Note (MPN) at www.studentloans.gov agreeing to the terms of the loan. You will use your FAFSA PIN# to sign in. Make sure your first and last names match your FAFSA.
  • Entrance Counseling, a tool to ensure you understand your obligation to repay the loan at www.studentloans.gov
  • A profile at SALT Money, an online tool to help you take control of your finances, manage and monitor your student loans.
  • Attend mandatory financial literacy workshop prior to receiving your funds. You will receive information with your award letter.

Net vs. Gross Loan Amounts

It is important for you to understand that the total amount you requested and what gets applied to your account will be different. Please refer to the “Subsidized vs. Unsubsidized” section to read about origination fees. Your award will reflect the gross amount, but your disbursement amount will be the net amount, after fees have been deducted.

Example 1
You are awarded a $2,750 subsidized Stafford loan for one quarter

  • $2,750 is your gross loan amount
  • $2,721 is your net loan amount that will disburse to your student account (gross amount minus the origination fee)

Example 2
You are awarded a $1,000 unsubsidized Stafford loan for one quarter

  • $1,000 is your gross loan amount
  • $990 is your net loan amount that will disburse to your student account (gross amount minus the origination fee)

Maximum Loan Amounts

Yearly loan amounts may be limited based on other financial aid received and your cost of attendance while enrolled. Your total student aid, including loans, may not exceed your cost of attendance even if you have not reached the yearly loan maximum.
The following table outlines maximum annual and career/aggregate loan limits for the subsidized and unsubsidized Stafford loans.

# of completed credits

Dependent Student

Independent Student

Freshman  (0-45 credits)

$3,500 SUB + $2,000 UNSUB

$3,500 SUB + $6,000 UNSUB

Sophomore (46-90 credits)

$4,500 SUB + $2,000 UNSUB

$4,500 SUB + $6,000 UNSUB

Junior (90-135 credits) - BAS programs ONLY

$5,500 SUB + $2,000 UNSUB

$5,500 SUB + $7,000 UNSUB

Senior (136-180 credits) - BAS programs ONLY

$5,500 SUB + $2,000 UNSUB

$5,500 SUB + $7,000 UNSUB

Lifetime Maximum Loan Amounts

$31,000
(no more than $23,000 may be subsidized)

$57,500
(no more than $23,000 may be subsidized)

Maximum Eligibility Period for Subsidized Stafford Loans

Students borrowing a subsidized Stafford loan for the first-time on or after July 1, 2013 are subject to a time limitation not to exceed 150 percent of the length of the borrower's educational program.
This time limit does not apply to unsubsidized Stafford loans.


Example of Subsidized Time Limitations for First-Time Borrowers

Associate Degree

Bachelor Degree

3 years maximum
150% of 2 years = 3 years

6 years maximum
150% of 4 years = 6 years

Upon reaching the maximum eligibility period, you can still receive unsubsidized Stafford loans as loan as you have not reached your aggregate loan limit listed above.
Your maximum eligibility period can change if you change to a program that has a different length. Subsidized Stafford loans borrowed for a previous program will count toward your current program limit.

Cancelling or Reducing your Loan

  • You have the right to cancel all or part of your loan. However, your request for cancellation must be received before the 1st day of the quarter or within 14 days of this notice, whichever is later.
  • If we have already disbursed loan funds to your account, you will need to return those funds to the South’s Financial Aid office within the timeframe listed in the previous paragraph. After the cancellation or reduction is processed, we will send you a reduction/cancellation confirmation letter.
  • If you do not return the disbursed funds within the timeframe referenced, you will have to return the funds directly to the Department of Education or your loan servicer to cancel or reduce your loan.

How to Cancel

Complete the Direct Loan Reduction/Cancellation Request Form to CANCEL all or part of your loan and return this form to the Financial Aid office before the quarter starts or within 14 days of this notice, whichever is later.

Exit Counseling

If you receive a loan while attending South, you must complete exit counseling when you leave South, drop below half-time enrollment (6 credits), or graduate.

This counseling will assist you with understanding your rights and responsibilities that apply to your loan. Information covered includes:

  • Loan repayment plan
  • Repayment options
  • Deferment and forbearance options
  • Cancellation options
  • Loan consolidation
  • Loan rehabilitation
  • Debt management
  • Prepayment
  • Consequences of default on loan and service obligation

Loan Repayment

Grace Period

After you graduate, leave school, or drop below half-time enrollment, you will begin a one-time six month grace period before repayment begins. Due to new federal legislation, interest will now accrue during the grace period on subsidized Stafford loans disbursed after July 1, 2012. Your federal loan servicer will notify you of the date your loan repayment begins and will provide further details.

Repayment Comparison Table

If you have a Federal Direct Unsubsidized Stafford Loan, you have the option to pay interest while you are in school or you can wait until you are no longer enrolled. Our office recommends that you pay the interest to minimize your loan debt. If you do not pay the interest, it will capitalize and be added to your total repayment amount. The example below illustrates the benefits of paying the interest while in school.

 

With Interest Capitalization

Without Interest Capitalization

(interest not paid while in school)

(interest paid while in school)

Original Loan Balance

$10,000

$10,000

Capitalized Interest

$4,800

$0.00 *

Current Loan Balance

$14,800

$10,000

Interest Rate

6.8 percent

6.8 percent

Maximum Term

120 months

120 months

Fixed Repayment Amount for 119 months

$170.32

$115

Fixed Repayment Amount for 1 month

$169.09

$114.24

Total Repayment Interest

$5,637.17

$3,808.76*

Total Repayment Amount

$20,437.17

$13,808.76

* Making loan interest payments benefits borrowers in the long run. For example, in this comparison, the monthly installment is $55.24 less and the total repayment at the end of the life of the loan is a savings of $1,828.41 in interest.

Repayment Plans

You will be able to choose a repayment plan that meets your needs. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose. Typical loan repayment terms are 10 to 25 years.

Please see the Direct Loan Repayment Plans and Calculators for more information.

Loan Proration for Graduating Borrowers

If you are a graduating senior and only attending one semester, your Stafford loans may be prorated based on the number of credits for which you are enrolled. This means that you may not be eligible to receive your maximum annual loan limit.

This affects students enrolled in less than the full load for their last year (36 credits). This will not affect students who are enrolled in fall, winter and spring quarters and graduate at the end of the spring semester.




Location:

Robert Smith Building map


Hours:

Monday, Tuesday, Thursday

8:00 am to 4:30 pm

Wesnesday

Closed to process paperwork

Friday

9:00 am to 4:30 pm



Phone:

(206) 934-5317


Email:

FinancialSouth
@seattlecolleges.edu


Fax:

(206) 934-7947