Federal Direct Student Loans Q&A

FEDERAL DIRECT LOANS

Federal Direct Loans are low-interest loans for students to help pay for the cost of a student’s higher education. The lender is the U.S. Department of Education rather than a bank or credit union.

Students need to complete all required application materials each academic year. Green River’s academic year runs from Summer through Spring.

What is a Direct Loan?

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.

Federal student loans are either subsidized or unsubsidized. Subsidized loans are need-based and the government pays the interest while the student is attending school at least half-time and during periods of deferment. Unsubsidized loans are not need-based, and the student is responsible for interest on unsubsidized loans at all times.

Federal education loans offer fixed interest rates that are typically lower than the variable rates offered by most private student loans. Loans first disbursed on or after July 1, 2023 through June 30, 2024, the interest rate is 5.49% for subsidized and unsubsidized loans. 

In addition to the interest, there is a loan fee on Direct Subsidized Loans and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed. See detailed information from the office of Federal Student Aid.

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.

How do I apply?

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.

1. FAFSA  (Free Application for Federal Student Aid) for the applicable academic year.
2. You may be required to provide other documents if your file is selected for verification. Check the tasks and message center tiles in ctcLink to see what documents you may be required to submit
3. 2023-2024 Federal Direct Loan Worksheet. Forms that are unsigned or have typed signatures will not be accepted. Completed forms can be uploaded to our office using our secure document upload tool or can be dropped off at our office during our operating hours.

STEP 2: NEW student borrowers must complete Loan Entrance Counseling and a Loan Master Promissory Note online before the loan request will be processed. Both items are required for all students obtaining Federal Direct Loans.

1. Go to https://studentaid.gov and log in with your FSA ID
2. Select Complete Aid Process
   Complete Entrance Counseling:    
   - Select "Complete Entrance Counseling" and follow the prompts
   - Please ensure you are completing the undergraduate "first loan" option
   Sign Master Promissory Note:
   - Select "Complete Master Promissory Note"
   - Select "Subsidized/Unsubsidized" and follow the prompts

For help with your FSA ID call 1-800-433-3243

The Financial Aid Office receives each student's completion reports within a few days. Based on those reports, we will be able to certify your loans with U.S. Department of Education. Thank you in advance to your prompt attention to completing these remaining steps.

How much can I borrow?

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 Green River College budget, you may not be eligible for the maximum loan amount.

When will I get my loan funds?

The college cannot forward the loan application to the U.S. Department of Education until after the student has electronically signed the Master Promissory Note (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 two, three, or four quarters, it will be divided equally among the quarters.

Green River will receive your loan funds electronically. We will apply the funds to your tuition and fees, if there is a balance owing. We will disburse any remaining loan funds to you via the refund preference you choose through BankMobile Disbursements.

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.

Who are my lender and loan servicer?

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

Visit My Federal Student Aid to view information about all of the federal student loans you have received and to find contact information for the loan servicer for your loans. You will need your FSA ID to access your information.

What are my rights and responsibilities?

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. Loan Simulator is a tool to help you make decisions about your student loans. Use it to find a repayment plan that meets your needs and goals or to decide whether to consolidate.

• 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 statusor 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. 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 of or all of your loan without penalty.
• The only circumstance to exempt you from repaying your loan is permanent and total disability.
• The U.S. Department of Education requires all student loan borrowers to complete Loan Exit Counseling when they are about to graduate, or drop to less than six credits, or will cease attendance for six months.

When do I complete Direct Loan Exit Counseling?

The U.S. Department of Education requires all student loan borrowers to complete Loan Exit Counseling so they know their rights and responsibilities.  You will also be provided with the different repayment options available to you. Exit Counseling will not affect a student's ability to receive financial aid in the future.

Students must complete the online Exit Counseling when they are about to graduate, or to drop to less than six credits, or will cease attendance for six months. Your 6-month grace period starts the day after one of these events occurs.  You don't have to begin making payments until your grace period ends.

To complete Exit Counseling, go to https://studentaid.gov/

1. Use your FSA ID and password to login.
2. Select "Complete Counseling"
3. Then choose "Start Exit Counseling"
4. Allow about 20-30 minutes to complete the exit counseling.  You must complete the counseling as it will not allow you to save your work.
5. After completing the counseling, you should print the confirmation page for your records.

The Financial Aid Office will also receive an electronic verification that you completed the exit counseling. 

If you have questions about completing the counseling, contact client services at 1-800-557-7394 or the Financial Aid Office at finaid@greenriver.edu.

The U.S. Department of Education provides tools and information to manage your student loans. 

Green River College Cohort Default Rate

GREEN RIVER COLLEGE DIRECT LOAN DEFAULT RATE
		NO IN REPAYMENT	NO IN DEFAULT	DEFAULT RATE	DATE PROCESSED
2021	3YR DRAFT	596	0	0.0	01/27/2024
2020	3YR OFFICIAL	706	0	0.0	08/05/2023
	3YR DRAFT	709	1	0.1	1/28/2023
2019	3YR OFFICIAL	722	25	3.4	9/20/2022
	3YR DRAFT	723	25	3.4	1/29/2022

 Could I defer or postpone my payments?

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. Contact your loan servicer for more information regarding receiving a deferment.