Federal Direct Loan Program (FDL)
The FDL program offers subsidized, unsubsidized and PLUS loans through the federal treasury for students enrolled at least half-time in an eligible program. Dependent undergraduate students can borrow up to $5,500, if they are first-year students enrolled in a program of study that is at least a full academic year, and $6,500, if they have completed their first year of study and the remainder of their program is at least a full academic year. The maximum for an independent undergraduate student loan is up to $9,500 for the first year and up to $10,500 for the second year. A student completing prerequisites for an approved program of study may receive up to $2,625 for one academic year.
The aggregate amount a student may qualify for is $31,000 for a dependent undergraduate and $57,500 for an independent undergraduate (only $23,000 of this amount may be in subsidized loans). According to federal guidelines, all student loans must come in two disbursements per loan period, and delivery to TCC for first year, first-time borrowers must be delayed for thirty days. Students must also complete the Master Promissory Note (MPN) at www.studentloans.gov.
Regardless of the type of loan students borrow, they must complete entrance counseling, before they can be given their first loan disbursement. A student dropping below half-time status, through withdrawal, transfer or graduation, must complete exit counseling. These counseling sessions are available online at www.studentloans.gov and provide student borrowers with important information about their loan, borrower rights, and repayment.
Federal Direct Stafford Loans
A subsidized loan is awarded on the basis of financial need. Student borrowers will not be charged any interest, before they begin repayment or during authorized periods of deferments. The federal government “subsidizes” the interest during these periods. An unsubsidized loan is not awarded on the basis of need. Interest is charged from the time the loan is disbursed until it is paid in full. If interest is allowed to accumulate, it will be capitalized—that is, the interest will be added to the principal amount of the loan and additional interest will be based upon the higher amount. Both a subsidized loan and an unsubsidized loan may be received for the same enrollment period.
Federal Direct PLUS Loan
PLUS loans enable parents with good credit histories to borrow funds to pay the educational expenses of each child, who is a dependent undergraduate student enrolled at least half-time. The yearly limit on a PLUS Loan is equal to the student’s cost of attendance at TCC minus any other financial aid he or she receives. Interest is charged on the loan from the date the first disbursement is made until the loan is paid in full. Parents will be notified by lender or service provider of interest rate changes throughout the life of their loan. Loan funds are sent to TCC by the U.S. Department of Education in two installments.