Federal Direct student loans are a long-term financial obligation. Accepting a loan means accepting the responsibility to repay the money you borrow, including interest costs and fees. You should take time to find out the true costs, including interest and fees, and how long it will take to repay your loans. Remember, not all student loans are created equal, so make sure you understand what type of loan you are requesting and the differences between the types of loans.
Be a smart borrower!
Take time to understand the type of loan being offered to you and try to limit your borrowing to just the amounts you need to cover your expenses.
Know how much you owe!
Even smaller loan amounts can add up to a big bill over time, so make sure you also know how much you currently owe by logging in to your account on StudentAid.gov then visit your Loan Aid Summary - which includes detailed information specific to your federal student loans such as your loan servicer(s) and Direct Loan totals.
You can also see a repayment estimator which allows you to either use your own projected amounts or view estimates based on your actual loan information.
Student loans are NOT all the same!
Federal Direct student loans are available in Subsidized Loans and Unsubsidized Loans, and while some things are the same for both loans, like the interest rate and the repayment options, there are important differences between the two types of loans. For instance:
Direct Subsidized Loans
- Students must demonstrate financial need on the FAFSA
- The U.S. Dept of Education pays the interest on your Direct Subsidized Loan while you are in school at least half-time (6 or more credit hours at TCC), and during eligible periods of deferment (this means your payments have been postponed).
Direct Unsubsidized Loans
- Available to students who complete the FAFSA regardless of financial need (in other words, it doesn’t matter how much income is on the FAFSA).
- The U.S. Department of Education does NOT pay the interest on these loans. You will be charged interest on Direct Unsubsidized loans starting with the day the loan disburses (pays out). If you choose not to pay the interest early, your interest will accumulate and be capitalized (that means you pay interest on the interest).
Entrance Counseling and the Master Promissory Note are required for all student borrowers
To receive student loans, you must complete both Entrance Counseling and a Master Promissory Note. This only has to be completed once for each school you wish to receive loans.
Federal PLUS Loans
If your parent is interested in a low-interest loan to help pay for the cost of your college education, have your parent go to Studentloans.gov to apply for a Parent PLUS loan. Eligibility information, interest rates, and application instructions are on that website.
Unlike Federal Direct Student loans, adverse credit history can affect eligibility for Parent PLUS loans. If your parent is denied a Parent PLUS loan, you may be able to receive additional Direct Unsubsidized loans.
Parent PLUS loans are only available to parents of a dependent student (students who must have parent information on the FAFSA).
Learn more about loans from TCC's Direct Loan Guide.
Students who have borrowed Direct Loans at TCC who graduate, transfer, leave or drop below six enrolled hours are required to complete online Exit Counseling.
Private education loans are available to TCC students. TCC does not have a preferred lender for private education loans and will work with any lender you choose. Private education loans are funded by private companies and have different terms and conditions than Direct Loans. They also typically have higher interest rates and do not offer the advantageous repayment options offered by Direct Loans. It is TCC's policy that students should apply for the FAFSA first and should only borrow private loans as a last resort for educational funding. To learn more about the different types of loans, TCC students can visit any campus Financial Aid and Scholarship Office to speak to a financial aid counselor. If they wish, students may apply for private loans through the FASTChoice website. FASTChoice is an online portal where students can do private loan counseling and find links to lenders. You are free to choose any lender, including those not presented on the FASTChoice portal. If you choose a different lender, please contact the financial aid office and let your lender know that TCC uses ScholarNet for Private Loan processing. Application processing will not be delayed unnecessarily if you choose a lender not presented in FASTChoice.