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Federal Family Education loans

What are the Federal Education Loans?

The Federal subsidized and unsubsidized Stafford Loans and Parent (PLUS) Loans comprise the Federal Family Education Loan Programs (FFELP). The Federal subsidized and unsubsidized Stafford Loans are low interest loans made by participating lenders to help pay for a college education.The loan programs require repayment by the student (subsidized and unsubsidized Stafford Loans) or parent (PLUS Loan). When deciding whether to borrow and/or how much to borrow, the student should be aware of all the requirements, interest rates, repayment options and schedules, and deferment options. The loans require repayment over a period of time, and usually payments begin six months after the student leaves school. Students are encouraged to borrow wisely.

What is the difference between the subsidized and unsubsidized Stafford Loan?

The subsidized Stafford Loan is the loan program in which the federal government pays the interest during the in-school grace and deferment periods. The unsubsidized Stafford Loan, is the loan program in which the student is responsible for paying the interest from the time the loan is disbursed. The interest rate is the same as for the subsidized and unsubsidized Stafford Loans. Students receiving the unsubsidized Stafford may request that the lender defer payment of the interest while the student is enrolled in classes. If so, the accrued interest is added to the principal amount of the loan, commonly known as capitalization. Capitalization will increase the amount the student will have to repay.

What is the PLUS Loan?

PLUS Loans enable parents to borrow for the educational expenses of their dependent classified student. The parent is required to have a “good” credit history to borrow. The student is required to be enrolled in a minimum of six credit hours per term. The PLUS Loan requires repayment by the parent, not the student. The yearly limit on a PLUS Loan is equal to the student’s cost of attendance minus any other financial aid the student receives. The interest rate is variable, but will never exceed nine percent.

How is eligibility determined?

Eligibility is based upon financial need and is determined by a formula applied consistently to all applicants. The subsidized Stafford Loan is a need-based loan offered to students with demonstrated financial need who have not already received the aggregate loan limit. The unsubsidized Stafford Loan is not based on need and is offered to students who have remaining budget room once the total financial aid awarded is deducted from the cost of education and has not exceeded the aggregate loan limit. Students are required to be enrolled in an eligible degree or certificate program for a minimum of six credit hours per term to receive the loan. The classes must be within the student’s program of study. Students are also required to have a 2.0 or better cumulative GPA. Students must maintain satisfactory academic progress.

What are the criteria for continued eligibility?

Maintain the standards of academic progress for financial aid.
Complete the FAFSA each academic year.
Transfer students who have attended an accredited college or university must have their transcript received and evaluated by admissions and student records.

When are the loans disbursed?

A check is mailed to students receiving a federal loan after they have registered, paid fees, and have begun attendance for the term. After the drop/add period, checks are mailed out as loan funds are received from the lenders. Students should verify that their correct address is listed on the student’s record file in the admissions office. If a check is not received within ten days from the mailing date, please contact a PHCC loan advisor for assistance.

Can a student cancel the loan once processed?

Students expecting to receive a Stafford Loan may request, in writing, the cancellation or the return of a proportionate amount of the loan to the lender. Students must submit the request to the financial aid office before the receipt of the loan check or before cashing the loan check.

Helpful hints

Borrow only what you need, not what you want.
The student’s financial aid file must be complete in order to determine the eligibility for a Stafford Loan.
Complete a FAFSA at least 90 days or three months before the first day of classes for which the loan is needed.
Verify with the financial aid office that the student has not already received the maximum loan allowable.
Verify standards of progress status with the financial aid office as it applies to the Stafford Loan eligibility.
Request an appointment with a financial aid advisor to assure that all scholarships and grants are awarded before requesting any loans.
Know your educational goal (declared program of study) and check with your academic advisor to ensure classes are required to meet your educational goal.

How to apply for Stafford Loan

Complete the Free Application for Financial Aid (FAFSA).
Receive your financial aid award letter.

How much can a student borrow?

Dependent students (except students whose parents cannot borrow PLUS)	Base amount	Additional unsubsidized loan amount
	Base amount	Prior to July 1, 2008	Effective July 1, 2008
Freshman (0-29 credit hours)	$3,500.00	0	$2,000.00
Sophomore (30 or more credit hours)	$4,500.00	0	$2,000.00

Independent undergraduate students and dependent students whose parents cannot obtain a PLUS Loan	Base amount	Additional unsubsidized loan amount
	Base amount	Prior to July 1, 2008	Effective July 1, 2008
Freshman (0-29 credit hours)	$3,500.00	$4,000	$6,000.00
Sophomore (30 or more credit hours)	$4,500.00	$4,000	$6,000.00

Your Stafford Loan may be prorated if:

Your program of study is less than one academic year (less than 30 weeks)
Your program of study lasts longer than one academic year, but the remaining period of study is less than one academic year. A remaining period of study is any period of enrollment at the end of which a student will graduate or complete program requirements.

Outstanding loans received at previous institutions are counted as loans received when determining the aggregate loan limits.

Determining the loan limits may be complicated; therefore, students are encouraged to contact the financial aid office for advice.

Loan fund comparison

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Exit interview seminar
Upon graduation, dropping below half-time enrollment or withdrawal from PHCC, you must complete the exit interview so you understand your repayment responsibilities. Please visit our student loans transition guide to complete your exit interview online.