In the past, Northwest Mississippi Community College participated in the Federal Family Education Loan Program whereby students borrowed from private lenders and banks. This program will be eliminated June 30, 2010. Effective July 1, 2010, Northwest Mississippi Community College will be participating in the William D. Ford Federal Direct Loan program. In the Federal Direct Loan program, the student borrower’s funds come from the U. S. Department of Education.
WHAT IS THE PURPOSE OF A STUDENT LOAN?
Federal Direct Loans are a major form of self-help aid. Federal Law requires student loan funds to be used for educational purposes, which include tuition, books, supplies, room, board, and transportation. The student’s Cost of Attendance budget does not include the purchase of automobiles, pay on existing loans, pay court fines, pay for vacations or other non-educational purposes. Federal Direct Loans are available through the William D. Ford Direct Loan Program. This money must be paid back.
WHAT KINDS OF FEDERAL DIRECT LOANS ARE AVAILABLE?
Federal Direct Loans are either subsidized or unsubsidized. A subsidized loan is awarded on the basis of financial need. You will not be charged any interest before you begin repayment or during authorized periods of deferment. The federal government “subsidizes” the interest during these periods.
An unsubsidized loan is not awarded on the basis of need. An unsubsidized loan is awarded based on the student’s Cost of Attendance budget along with any other financial aid awarded. This is a loan for students who may not qualify, in whole or in part, for the “subsidized” Direct Loan based on a need as determined by the Free Application for Federal Student Aid. Eligibility for the “subsidized” Direct Loan must be determined before a student can apply for an “unsubsidized” Direct Loan. The terms and conditions are generally the same as the “subsidized” Direct Loan, except the borrower is responsible for interest that accrues from the time the loan is disbursed until it is paid in full. If you allow the interest to accumulate, it will be capitalized – that is, the interest will be added to the principal amount of your loan and additional interest will be based upon the higher amount.
WHO CAN GET A FEDERAL DIRECT LOAN?
If you are a student enrolled in an eligible program of study at least half-time (6 hours), you may receive a Federal Direct Loan. You must also meet other general eligibility requirements, such as, complete the Free Application for Federal Student Aid (FAFSA) online at www.fafsa.gov and make satisfactory academic progress toward your program of study. IF YOU ARE ON FINANCIAL AID SUSPENSION, YOU ARE NOT ELIGIBLE TO APPLY FOR A STUDENT LOAN.
HOW MUCH CAN I BORROW?
Students may not be eligible for the maximum loan amount.
Dependent student's combined subsidized and unsubsidized Direct Loan annual eligibility is as follows:
| |
Maximum Subsidized Loan |
Additional Unsubsidized Loan |
Total Loan (Combined Subsidized and Unsubsidized Amounts) |
| Freshman |
$3,500 |
$2,000 |
$5,500 |
| Sophomore |
$4,500 |
$2,000 |
$6,500 |
Independent student's combined subsidized and unsubsidized Direct Loan annual eligibility is as follows:
| |
Maximum Subsidized Loan |
Additional Unsubsidized Loan |
Total Loan (Combined Subsidized and Unsubsidized Amounts) |
| Freshman |
$3,500 |
$6,000 |
$9,500 |
| Sophomore |
$4,500 |
$6,000 |
$10,500 |
*The loan amounts above are maximums allowed by the Dept. of Education and are subject to the Cost of Attendance minus any other Financial Aid (scholarships, grants, etc.) the student may have received.
*The cumulative maximum amount that may be borrowed as dependent undergraduate is $31,000 ($23,000 maximum subsidized) and for an independent is $57,000 ($23,000 maximum subsidized).
HOW WILL I RECEIVE MY FEDERAL DIRECT LOAN?
The Department of Education will send your loan funds to the school. Loan funds are not sent to the school until thirty (30) days after the first day of your enrollment period. Student tuition, fees, and room and board are deducted from the first financial assistance – loan, grant, scholarship, etc. – received by the college. After your loan money has been credited to your account in the Business Office and once all fees you owe the college have been deducted, any loan refund due will be mailed to you from the Business Office to the address you have on record with the Registrar’s Office.
WHAT IS THE INTEREST RATE?
For loans that were first disbursed on or after July 1, 1994, the interest rate has been subject to change each year, but by law, it has never exceeded 8.25 percent. For information on the current interest rate for a Federal Direct Loan, go to www.studentloans.gov or ask your school loan officer. You will be notified of interest rate changes throughout the life of your loan by your lender.
If you have “subsidized” loans, you will not be charged interest while you are in school, during grace periods, or during authorized deferment periods. Interest will begin to accrue (accumulate) when you enter repayment.
If you have “unsubsidized” loans, you will be charged interest from the day the loan is disbursed until it is repaid in full, including in-school, grace, and deferment periods. You may choose to pay the interest during these periods, or it can be capitalized.
WHEN DO I PAY BACK MY LOAN?
After you graduate, leave school, or drop below half-time enrollment, you have six months before you begin repayment. This is called a “grace period.” During the grace period on a “subsidized” loan, you don’t have to pay any principal, and no interest will be charged. During the grace period on an “unsubsidized” loan, you don’t have to pay any principal, but interest will be charged. You can either pay the interest or it will be capitalized.
After you leave school or drop below half-time enrollment, you will receive information about repayment and will be notified of the date repayment begins. However, you are responsible for beginning repayment on time, even if you do not receive this information.
HOW DO I APPLY FOR A FEDERAL DIRECT STUDENT LOAN AT NORTHWEST?
- You will need to have a current FAFSA application on file in the Financial Aid Office whether you are eligible to receive Pell Grant funds or not.
- You must have a Department of Education PIN to access Web sites for Steps 4, 5 and 6. If you do not have a PIN or do not remember your PIN, you may apply for a PIN or
request a duplicate at www.pin.ed.gov .
- You must complete a Direct Student Loan application or you may pick up an application in the Financial Aid Office on the campus you plan to attend.
- You must complete the electronic Loan Entrance Counseling at www.studentloans.gov (Must print and provide a copy of the entrance counseling confirmation page).
- You must complete a Federal Direct Master Promissory Note for the Department of Education at www.studentloans.gov and must provide a copy of the Master Promissory Note. (To print the MPN: view the HTML version but do NOT print from this screen, click continue, click on View PDF, and print the MPN.) Please note that if you had a Federal Direct Loan with the Department of Education previously, you may skip this step.
- You must provide a copy of your Driver’s License and Social Security Card. Also, provide a copy of NSLDS (National Student Loan Data System) by accessing your
loan history at www.nslds.ed.gov/nslds_SA .
- After completing Steps 1-6, please submit all documents to the Financial Aid office on the campus you plan to attend or mail to:
Northwest Mississippi Community College
Attn: Financial Aid Office
4975 Hwy. 51 N.
Senatobia, MS 38668
- You will receive a Notice of Guarantee and Disclosure Statement. This is to notify you of loan approval, the amount of your loan and the expected date of funds to arrive at the school. Also, this notification gives information about the terms and conditions of your loan.
- Please remember you must also complete the loan exit interview upon leaving Northwest for any reason.
Please note that all loans are initiated by the student as stated above.
