Applying For Federal Loans
Catawba Valley Community College participates in the William D. Ford Federal Direct Loan Program. Direct loans are considered by many to be the most cost effective way of delivering educational loans to students and parents. The following should offer some guidance for students and parents when borrowing either student and/or parent loans. For frequently asked questions, click here: https://studentloans.gov/myDirectLoan/faqs.action
Before you Borrow
- Choosing to borrow an educational loan is a decision that you should consider seriously before entering into a loan agreement.
- Please keep in mind that the cost involved in attending a community college is only a fraction of the cost involved in attending a university or private college. In most cases, the state and federal grants provided through completion of the FAFSA are more than enough to cover all charges associated with attending our school.
- If you do not qualify for state and federal grants, loans can be a wonderful way to make attending college possible, but many students enter into loan agreements without fully understanding the consequences of their decisions.
- All other avenues of funding your education should be explored prior to deciding to commit to a loan. CVCC offers an array of scholarship opportunities, federal work study positions, and will gladly recommend other funding avenues that you may not have considered previously.
- While grants, scholarships, and work study wages do not have to be repaid, loans must be repaid when you are no longer enrolled in school or have dropped below half-time enrollment. You need to be very honest about your ability to repay student loan debt based on what you anticipate your future annual income will be. Please utilize the Loan Planning Form for a clearer idea of what to expect as entry level income in your chosen field and to estimate an expected loan payment.
- You should never borrow more than you absolutely need to attend school.
Subsidized, Unsubsidized, and Parent Plus
There are three types of Federal Direct Stafford Loans; subsidized, unsubsidized, and Parent Plus.
- If your financial need is not fully met through the other forms of aid, you may be eligible for Direct Subsidized Stafford Loan funds up to the remaining amount of your financial need or up to the loan limits based on your grade level, whichever amount is lower. With subsidized loans, the federal government subsidizes the interest that normally accrues on a loan while you are enrolled in school on at least a half-time basis (6 credit hours), during your grace period, and during deferments. These loans are awarded strictly on the basis of financial need. Financial need is determined by subtracting the Estimated Family Contribution (EFC), derived from the FAFSA, state and federal grants, federal work study awards, and any other forms of funding from the cost of attendance.
- If you do not demonstrate financial need, you may be eligible for a Direct Unsubsidized Stafford Loan. Interest accrues on this loan during all periods. If you accept the unsubsidized loan you will be responsible for paying the interest while in school or you may choose to let the interest accrue. If you allow interest to accrue while attending school, interest will capitalize each month and you will be paying interest on interest.
- The last type of Stafford Loan is the Direct Stafford Parent Plus Loan. This is a loan for parents of dependent students who are enrolled in college on at least a half-time basis. Interest also accrues on this type of loan during all periods. The loan allows a creditworthy parent or stepparent of a dependent student to borrow up to the cost of attendance minus any other financial aid received. These loans are available directly from the Federal government under this program and are based on a borrower's credit history rather than financial need. For more guidance and to begin this process click here: https://studentloans.gov/myDirectLoan/index.action
Subsidized Loan Limits
Freshmen (less than 32 credit hours).............$3500/per Academic Year ($1,750 per semester)
Sophomore (32 or more credit hours)............$4500/per Academic Year ($2,250 per semester)
Repayment and Grace Periods
- Direct Subsidized and Direct Unsubsidized loans have a 6-month grace period that starts the day after you graduate, leave school, or drop below half-time enrollment. You don't have to begin making payments until you grace period ends. There are various repayment options available to borrowers; for more information on these options, please refer to the William D. Ford Federal Direct Loan website at www.studentloans.gov.
- There is no grace period for Direct Parent Plus loans. Repayment begins 60 days after final disbursement of the loan. The repayment term is generally based on a ten-year plan. Parents may pre-pay their loans in whole or part without penalty. Under certain circumstances, parents may consolidate their federal PLUS loans. There is also the possibility of deferring repayment if the parent is also a student enrolled at least half-time and for an additional 6 months after that parent graduates or drops below half-time enrollment.
- To contact your servicer use the following links:
Students who would like to borrow money to meet education expenses that are not covered by other sources of aid may wish to consider alternative or private loan options. While there are many private lenders, the two that we tend to see the most of are participants in the Smart Option Loan Program. Theses lenders can be contacted by using the following links: