Student (Direct) Loans

Federal Direct Loans help meet today’s cost of higher education. The U.S. Department of Education is the lender. These loans do not require credit checks or collateral, and are not based on a student’s credit history. Student loans provide a variety of deferment options and repayment terms. The fixed loan interest rates are 3.4% for subsidized loans and 6.8% for unsubsidized loans.

Students must be enrolled at least half-time (6 credits) in an eligible program, taking classes required for that program, and meeting the academic progress policy.

There is no need to select a lender, as the U.S. Department of Education is the lender for Direct Loans.

Direct loans have annual maximum loan amounts based on grade level, dependency status, your overall financial aid eligibility and other aid awarded. You must have earned 45 credits towards your program of study to be considered a second year student. Since the total of your aid cannot exceed your applicable GRCC budget, you may not be eligible for the maximum loan amount.

Since Direct Loans are considered part of the Federal Financial Aid Programs, each academic year students must complete the following before student loan applications are approved and sent to the servicer.

STEP 1: Complete all required application materials

• FAFSA (Free Application for Federal Student Aid) for the applicable academic year
• Green River Supplemental Financial Aid Application for the applicable academic year
• Federal Direct Loan Worksheet
• You may be required to provide other documents if your file is selected for verification

STEP 2: NEW student borrowers at GRCC must complete Direct Loan Entrance Counseling and a Direct Loan Master Promissory Note online before the loan request will be processed. You will need your FAFSA Pin to complete these.

1. Go to www.StudentLoans.gov
2. Select “Sign In” under Manage My Direct Loan
   1. Select “Complete Entrance Counseling” (twice) - Select “I am an undergraduate student” and follow the prompts.
   2. Select “Complete Master Promissory Note” - Select “Subsidized/Unsubsidized” and follow the prompts.

If you have “need-based” eligibility, and requested student loans on your FAFSA and the GRCC Supplemental Financial Aid Application, we will automatically calculate your “need-based” loan eligibility. However, if you do not have “need-based” eligibility, you must fill out GRCC’s Federal Direct Loan Worksheet for an unsubsidized loan. On the worksheet you will provide information and the amount you’d like to borrow for the academic year. After your file has been reviewed, a confirmation will be sent to you showing the loan amounts approved for each quarter and the estimated disbursement dates. Please remember these are only “estimated” disbursement dates.

The college cannot forward the loan application to the U.S. Department of Education until after the student has electronically signed the MPN and completed the Direct Loan Entrance Counseling. (See “How do I Apply?”)

Direct Loans are always issued in multiple disbursements, and disbursements are NOT available prior to the first day of the quarter.

If your loan is for one quarter only, the loan will be divided into two disbursements with the second half available after the midpoint of the quarter.

If your loan is for two, three, or four quarters, it will be divided equally among the quarters.

If you are a first-year student AND a first-time borrower, the disbursement for your FIRST quarter will NOT be available until 30 days after the first day of the quarter.

GRCC will receive your loan funds electronically. We will apply the funds to your tuition and fees, if there is a balance owing. We will provide you any remaining loan funds on a GRCC check.

Picture identification is required to pick up your check. You must also provide an Attendance Form that has been signed by one of your instructors within three days of picking up a check.

Your loan funds are to be used for educational expenses that may include your tuition and fees, room and board, books, computer purchase, miscellaneous living expenses, gas for your car or bus tickets and child care costs.

• So that your future monthly payments don't become a burden, you should estimate how much you need and what your loan payments would be.
• The terms of your loan are described in the promissory note - read them carefully so you understand your obligation to repay the loan according to the terms of the note.
• Let your lender and the Financial Aid Office know if you change your address, name, telephone number, enrollment status, or school.
• Communicate with your lender or the agency holding the loan if you are having trouble making payments - you may be able to temporarily postpone or reduce your payments.
• Keep your promissory note, loan disclosure statement and repayment schedule to refer to the interest rate, how much you borrowed and the terms of your loan.
• Your loan will have a grace period, usually six months, when you don't have to make principal payments (or interest on a subsidized loan). The grace period starts after you withdraw from school, drop to less than half-time, or graduate and don't continue college.
• Begin making payments at the end of your six month grace period - contact your lender if you haven't received a repayment schedule.
• A student loan in "default" can damage your credit record - be sure to make timely monthly payments.
• Your lender must give you at least five years to repay your loan as long as you meet the minimum monthly payment.
• In addition to a flat monthly payment option, you may choose an income-sensitive or graduated repayment schedule to make lower monthly payments initially and increase them as your income increases.
• You may prepay part or all of your loan without penalty.
• You have a right to full information about your loan, the promissory note explaining the terms of the loan, the repayment schedule and what is reported to a credit bureau.
• You must be notified if your lender sells or transfers your loan and be provided with the new loan servicer contact information.
• The only circumstance to exempt you from repaying your loan is permanent and total disability.

If you can't make your student loan payments because of a temporary financial hardship, you may be eligible for a deferment. A deferment allows you to temporarily postpone your monthly payments. If you have a subsidized Stafford Loan, the federal government will pay the interest for you during a period of deferment. For other loans, interest will accrue during deferments.

If you are experiencing financial hardship and/or illness, but do not qualify for a deferment, your lender may be willing to grant a forbearance during which time you are responsible for the interest that accrues on your loan.