Types of Loans, Limits & Interest Rates
Types of Loans
Federal Loan Limits
Annual maximum loan limits are dependent upon financial aid eligibility, dependency
status and grade level (including transfer units).
A student’s status as a dependent or independent is determined by information provided
by the student to the US Department of
Education on the FAFSA. Students who have “no need” (no financial aid need) and who
do not qualify for the subsidized Loan may
be eligible for the unsubsidized Loan. See Annual and Aggregate Loan Limits below.
Dependent students whose FAFSA is rejected because they did not include parent information may be allowed to borrow from unsubsidized loan only. Such students must contact the Financial Aid Office and request instructions directly from the loan specialist.
The minimum loan that Southwestern College will certify is $100. Students with less than $100 of eligibility will not receive a loan.
Annual and aggregate loan limits
Annual loan limits | Subsidized maximum | Combined Sub / Unsub maximum |
Grade level 1 (0 to 29.9 units completed)* | Dependent: $3,500 Independent: $3,500 |
Dependent: $5,500 Independent: $9,500 |
Grade level 2 (30 or more units completed)* | Dependent: $4,500 Independent: $4,500 |
Dependent: $6,500 Independent: $10,500 |
Aggregate loan limits | Subsidized maximum | Combined Sub / Unsub maximum |
Dependent Students | $23,000 | $31,000 |
Independent Students | $23,000 | $57,500 |
*Grade level is based on units either earned at Southwestern College or already transferred
and accepted to Southwestern
College. Students for whom our records show less than 30 units earned at Southwestern College
or already transferred to
Southwestern College will be considered Grade level 1 for loan purposes. Units taken
at other colleges previously and not yet
transferred to Southwestern College will not be considered.
Interest Rates
The interest rates below are effective for all Direct Loans with a first disbursement on or after July 1, 2024.
Under the new interest rate structure, all Direct Loans will be “variable-fixed,” meaning students would receive a new rate with each new loan, but then that rate is to 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.
The chart below shows the interest rates for Subsidized and Unsubsidized loan programs. Both types of loans have the same repayment terms and interest rates are fixed rates for the life of the loan.
First Disbursement on/After |
First Disbursement Before |
Fixed Interest Rate |
Interest Rate Cap |
|
Direct subsidized and unsubsidized loans | 7/1/2024 | 7/1/2025 | 6.53% | 8.25% |
Fees
Borrowers are required to pay an origination and insurance fee. These fees are deducted from the proceeds of the loan. For subsidized and unsubsidized loans disbursed ater October 1, 2020, the origination fee is 1.057%.