Skip to page body Home About SWC Admissions Academic Programs Student Services Schools & Centers Faculty & Staff
 

2013-2014

 

Deadlines:

Fall Semester Enrollment Only 2013:                       Tuesday, November 19, 2013

Fall and Spring Semester Enrollment 2014:             Friday, April 25, 2014


Southwestern College participates in the William D. Ford Federal Direct Loan Program, formerly the Federal Family Education Loan (FFEL) Program.  The Direct Loan Program offers the same types of loans as the FFEL Program.  Direct Loans have the same terms and conditions as FFEL Program, but instead of a bank lending the money, the U.S. Department of Education (the Department) lends the money directly to students through the student’s school. 

  • Direct loans are simple. You borrow directly from the federal government and have a single contact for everything related to the repayment of your loans.
  • You will have online access to your account information 24 hours a day, 7 days a week at www.dl.ed.gov.
  • You can choose from several repayment plans that are designed to meet your needs.


Subsidized Direct Loan Lifetime Eligibility (Effective July 1, 2013 for New Borrowers only)

Congress approved a new lifetime limit on receiving Subsidized Direct Loans. This new limit applies to first time borrowers only. A first time borrower is defined as a student with a zero ($0) loan balance as of July 1, 2013 or later. Please click on the link below for important information regarding your new loan:

http://ifap.ed.gov/eannouncements/attachments/051613DirectSubsidizedLoanLimit150PercentAnnounce1Attach.pdf

Important Notices

Experimental Sites Initiative

Effective 2013-2014, Southwestern College has been approved by the U.S. Department of Education to participate in an experimental initiative to reduce over-borrowing and risk of loan default. This will allow our college to eliminate the Unsubsidized Loan eligibility for certain groups of students. This decision is final and cannot be appealed to the U.S. Department of Education.

Based on this initiative, the following categories of students will not be eligible to borrow Unsubsidized Loans:

  • 1ST YEAR / CALIFORNIA RESIDENTS STUDENTS

1st year is defined as students who have completed less than 30 units in their current program of study and 24 units out of the 30 must be degree applicable. Units that will not be counted towards the 24 units are basic skills or remedial or any other units that are not applicable to the current program or major based on the educational plan

  • STUDENTS WITH TOTAL LOAN AGGREGATE DEBT OF $12,500 OR MORE

Students who have borrowed subsidized and unsubsidized loans with a combine total of $12,500 or more. Total loan debt includes loans from ALL schools attended

  • STUDENTS WHO HAVE BEEN APPROVED ON A SATISFACTORY ACADEMIC APPEAL

Students who were disqualified and who are approved through the Financial Aid Appeal process for the 2013-2014 aid year

Loan Reporting

All federal student loans obtained by a student or parent are reported to and tracked on the National Student Loan Data System (NSLDS).  NSLDS loan records are accessible to all authorized NSLDS users, including schools, student loan guaranty agencies, lenders, federal agencies, and other authorized users in order to calculate future aid eligibility, or to resolve questions about the student loans or grants on a need-to- know basis.

Accessing NSLDS

Student and parent loan borrowers may view their federal loan information at NSLDS using their federal PIN.

Types of Loans:

Federal Direct Subsidized Loan: provides low interest rates and are available to students who demonstrate financial need determine by the information provided on the FAFSA. The Federal government pays the accruing interest on the loan while attending school at least half time or during deferment status. Please note: Direct Subsidized loans will not be eligible for an interest subsidy during the six-month grace period when the loan is in the six-month grace period after the student is no longer enrolled at least half time, or if the loan is in a deferment status. This provision eliminates the interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If a student received a subsidized loan during this timeframe, they will be responsible for the interest that accrues while their loan is in the grace period. They do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of their loan when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.

Federal Direct Unsubsidized Loan:  provides low interest rates and are available to all students regardless of financial need. Interest begins to accrue from the date the loan is disbursed, though you can choose to pay it later if you are in an in-school, grace, or deferment status. If the student does not pay the accruing interest, it will be added to the principal amount of their loan and increase the amount they have to repay. If the student pays the interest as it accumulates, they will repay less in the long run.

Federal Loan limits, Interest Rates and Fees

Annual Loan Limits:

The maximum amount you can borrow each academic year depends upon your Financial Aid Eligibility and your Grade level (this includes transfer units).

Dependent/Independent status is determine by the Department of Education based on the information that the student provides on the Free Application for Student Aid (FAFSA)

 

Dependent Students
Direct Loan Annual Limits

DEPENDENT STUDENTS

Base Amount
Subsidized/Unsubsidized
Combined

Additional
Unsubsidized

Yearly Maximum

Grade Level 1
0-29.9 completed units

$3,500

$2,000

$5,500

Grade Level 2
30+ completed units

$4,500

$2,000

$6,500

 

Independent Students
Direct Loan Annual Limits

INDEPENDENT STUDENTS

Base Amount
Subsidized/Unsubsidized
Combined

Additional
Unsubsidized

Yearly Maximum

Grade Level 1
0-29.9 completed units

$3,500

$6,000

$9,500

Grade Level 2
30+ completed units

$4,500

$6,000

$10,500

 

Aggregate Loan Limits
Maximum Total Outstanding Loan Debt

Subsidized/Unsubsidized Aggregate


DEPENDENT STUDENTS

$31,000
(maximum $23,000 subsidized)


INDEPENDENT STUDENTS

$57,500
(maximum $23,000 subsidized)

 

Students with “No Need”:

Students with No Need and who do not qualify for the Subsidized Loan may be eligible for the Unsubsidized Loan:

Up to $5500 per year – 1st year (student qualifies if he/she does not have need and is not eligible for Sub loan)

Up to $6500 per year- 2nd year (student qualifies if he/she does not have need and is not eligible for Sub loan)

 

Interest Rates:

These interest rates are effective for all Direct Loans with a first disbursement on or after July 1, 2013. The interest rates are calculated using a base 10-year Treasury Note Index of 1.81% plus an add-on amount for each loan program--2.05% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students, 

Under the new interest rate structure, all Direct Loans except Direct Consolidation Loans will be “variable-fixed,” meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan. There are also interest rate caps at 8.25% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students. For Direct Consolidation Loans, the interest rate remains the weighted average of the interest rates of the loans included in the consolidation, rounded up to the next higher one-eighth of one percent, without a cap.

The chart below shows the interest rates for Subsidized and Unsubsidized loan programs.  Both types of loans have the same repayment terms.  Payment of interest and principal on both Subsidized and Unsubsidized loans begins after you cease to attend at least half-time at Southwestern College.

Federal Direct Student Loans 2013-2014 Interest Rates

Effective for Loans With a First Disbursement on or After July 1, 2013

Loan Type

Student Grade Level

Cohort

Index Rate

 

 

 

First

Disbursement

On/After

First

Disbursement

Before

10-Year Treasury Note Index

Add -On

2013-2014 Fixed Interest Rate

Interest Rate Cap

Direct Subsidized Loans

Undergraduate Students

7/1/2013

7/1/2014

1.81%

2.05%

3.86%

8.25%

Direct Unsubsidized Loans

Undergraduate Students

7/1/2013

7/1/2014

1.81%

2.05%

3.86%

8.25%

 

 

Fees

The Origination Fee for both Subsidized and Unsubsidized loan is 1.053%.  This fee is deducted before you receive your loan.  The amount you actually receive will be less than the amount you have to repay.

Grace Period

When borrowers cease to be enrolled at an eligible school on at least a half-time basis, a six-month grace period begins. The repayment period for a Direct Subsidized Loan begins and interest begins to accrue the day after the grace period ends.

Master Promissory Note

You must complete a Direct Loan Master Promissory Note (MPN). Although you may have previously signed an MPN to receive FFEL Program loans, a FFEL MPN cannot be used to create Direct Loans.

The MPN is the legal document through which you promise to repay your Direct Loans and any accrued interest and fees to the Department.  It also explains the terms and conditions of your loans.  A Direct Loan MPN can be used to make loans for up to ten (10) years.  You may complete a Direct Loan MPN electronically via the StudentLoans.gov Web site at https://studentloans.gov.  

 

To complete a Direct Loan MPN electronically, you must have a Federal Student Aid PIN.  The Federal Student Aid PIN is the same PIN used to complete the Free Application for Federal Student Aid (FAFSA).  To apply for a PIN if you do not already have one, or for customer service regarding a previously assigned PIN, visit www.PIN.ed.gov.

Entrance/Exit Loan Counseling

Students are required to complete the Entrance Loan Counseling prior to applying for a loan.   Access to the Entrance Counseling Portal is through www.studentloans.gov

Exit Loan Counseling is required for student, who drops below half time, withdraws or graduates.  Access to the Exit Counseling Portal is through www.studentloans.gov.

Direct Loan Packaging Policy

  • Loans are not included on the initial award letter. Students are instructed on the award letter to come to the financial aid office to inquire about loan eligibility. A letter is also sent to students who have no demonstrated need according to federal methodology. In this letter the student is instructed to come to the financial aid office to inquire about loan eligibility.

Direct Loan Requirements

  •  Complete the Free Application for Federal Student Aid (FAFSA) and any other required documents.

  • Student must have a completed financial aid file and have been packages for eligible aid before a Direct Loan Application will be processed
  • You must receive an Award letter prior to requesting a Federal Direct Student Loan application. Direct Loan application is available at the Financial Aid Office
  • Complete the Electronic Master Promissory Note if you are a new Southwestern College Borrower
  • Complete and pass the required Entrance Loan Counseling
  • Complete and pass the required Exit Loan Counseling for those who drop below half time, withdraws and graduates
  • Must maintain continuous half-time enrollment for the entire loan period to receive your loan check(s).
  • Transferred units accepted at Southwestern college will be counted towards units completed in determining grade level
  • Direct loan payments will be made once you are actively enrolled in and attending 6 or more units. NOTE: classes that start later in the semester will delay disbursement of a student loan.
  • If you drop or withdraw below 6 units for the Fall 2013 semester, your loan check may be cancelled and you will have to re-apply for the Spring term.
  • You must not be in Default on any Title IV Federal Loan, or owe an overpayment on any Federal Grant from any institution.
  • You must maintain Satisfactory Academic Progress as published on the Southwestern College website.
  • You may not receive loan funds at any other institution during the period of enrollment at Southwestern College.
  • If your total loan indebtedness is at least $10,000 or you are requesting unsubsidized loans, you must complete the Budget Worksheet (available on our website) and meet with a Financial Aid Loan Specialist. Southwestern College has the responsibility to evaluate all loan requests case-by-case and reduce or deny loan request for students that, in our professional judgment, are at serious risk for loan default. High levels of indebtedness (including loans from other colleges), coupled with a small progress in an academic program, is a common indicator of high risk default. Therefore your loan request may be denied or reduced    
  • Southwestern College does not participate in Alternative Private Loan or Parent Plus loans.
  • Your loan will be prorated if you are enrolled in a program that is shorter than a full academic year or enrolled in a program that is one academic year or more in length but is in a remaining period of study that is shorter than a full academic year.

Award Letter

Award letters will be emailed to students with information on the amount the loan was approved for with an attached link to the disbursement schedule

Disbursement Procedures

 

  • Direct Loans will be disbursed in two separate installments.
  • Student must be enrolled in a minimum of 6 units at the time of disbursement
  • First Year (have not completed 30 units in your current program),  First Time borrowers at Southwestern College will have a 30 day delay after the semester starts before the 1st loan disbursement.
  • Direct Loan checks are disbursed via direct deposit or paper check through Higher One Financial Institute
  • Direct Loan processing and disbursement will take approximately 4-6 weeks.

Repayment Plans

Monthly payment amounts will be based on how much you borrowed and how long it takes you to repay the loan.  You can change the plans at any time.  There are no penalties if you make payments before they are due or pay more than the amount due each month.  The following are several repayment plans available:

 

 

 

Standard Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans

Payments are a fixed amount of at least $50 per month.

Up to 10 years

You'll pay less interest for your loan over time under this plan than you would under other plans.

Graduated Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans

Payments are lower at first and then increase, usually every two years.

Up to 10 years

You'll pay more for your loan over time than under the 10-year standard plan.

Extended Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans

Payments may be fixed or graduated.

Up to 25 years

  • Your monthly payments would be lower than the 10-year standard plan.
  • If you are a
  • Direct Loan borrower, you must have more than $30,000 in outstanding Direct Loans.
  • FFEL borrower, you must have more than $30,000 in outstanding FFEL Program loans.

For example, if you have $35,000 in outstanding FFEL Program loans, and $10,000 in Direct Loans, you can use the extended repayment plan for your FFEL Program loans, but not for your Direct Loans.

  • For both programs, you must also be a "new borrower" as of Oct. 7, 1998.
  • You'll pay more for your loan over time than under the 10-year standard plan.

Income-Based Repayment Plan (IBR)

  • Direct Subsidized and Unsubsidized Loans
  • Subsidized and Unsubsidized Federal Stafford Loans
  • all PLUS loans made to students
  • Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents
  • Your maximum monthly payments will be 15 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply).
  • Your payments change as your income changes.

Up to 25 years

  • You must have a partial financial hardship.
  • Your monthly payments will be lower than payments under the 10-year standard plan.
  • You'll pay more for your loan over time than you would under the 10-year standard plan.
  • If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.
  • You may have to pay income tax on any amount that is forgiven.

Pay As You Earn Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS loans made to students
  • Direct Consolidation Loans that do not include (Direct or FFEL) PLUS loans made to parents
  • Your maximum monthly payments will be 10 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply).
  • Your payments change as your income changes.

Up to 20 years

  • You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.
  • You must have a partial financial hardship.
  • Your monthly payments will be lower than payments under the 10-year standard plan.
  • You'll pay more for your loan over time than you would under the 10-year standard plan.
  • If you have not repaid your loan in full after you made the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven.
  • You may have to pay income tax on any amount that is forgiven.

Income-Contingent Repayment Plan

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS Loans made to students
  • Direct Consolidation Loans
  • Payments are calculated each year and are based on your adjusted gross income, family size, and the total amount of your Direct Loans.
  • Your payments change as your income changes.

Up to 25 years

 

  • You'll pay more for your loan over time than under the 10-year standard plan.
  • If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven.
  • You may have to pay income tax on the amount that is forgiven.

Income-Sensitive Repayment Plan

  • Subsidized and Unsubsidized Federal Stafford Loans
  • FFEL PLUS Loans
  • FFEL Consolidation Loans
  • Your monthly payment is based on annual income.
  • Your payments change as your income changes.

Up to 10 years

  • You'll pay more for your loan over time than you would under the 10-year standard plan.
  • Each lender's formula for determining the monthly payment amount under this plan can vary.

 

Default 

Taking out a Federal Direct Student Loan will have an impact on your future credit and financial aid eligibility.  Failure to make regularly scheduled payments on your student loan can lead to a defaulted loan.

Please make sure to contact the Direct Student Loan at www.direct.ed.gov  if you have any difficulties in paying your loan.   This includes economic hardship, unemployment, temporary disability, or returning to school at least half-time. The government will give you several options to temporary defer your loan payments.


Consequences of Default:

  • You will not be eligible for further Federal Student Aid.
  • You will lose your deferment options.
  • Your loan may be turned over to a collection agency.
  • Your credit rating will be damaged.
  • Your wages can be garnished and your tax refund can be taken away.
  • You may be subject to legal action by the federal government.
  • Your total debt may be increased by collection fees, attorney fees, late fees, court cost and additional interest.

Free viewers are required for some of the attached documents.
They can be downloaded by clicking on the icons below.

Download Acrobat Reader Download Flash Player Download QuickTime Download Windows Media Player Download Microsoft Silverlight Download Word Viewer Download Excel Viewer Download PowerPoint Viewer
Last updated: 4/28/2014 10:05:12 AM