Macomb Community College participates in the Federal Direct Stafford Loan Program. There are two types of loans under this program: subsidized and unsubsidized. Students denied a Stafford loan based on these guidelines can file a letter of appeal to the Director of Financial Aid.
A subsidized Federal Direct Stafford Loan is a low-interest, fixed rate based on financial need. The student must complete the Free Application for Federal Student Aid (FAFSA) to apply for this loan. In addition, Macomb Community College has a Federal Direct Loan Request Form, which is also required as part of the application process. The loan requires repayment after the student leaves school or enrolls less than six credit hours.
The student is required to sign a promissory note and complete entrance counseling (first-time borrowers only). In addition, when the student drops below half-time (6 credit hours or more) or leaves school, exit counseling is required. Macomb will notify the student via postal mail when he/she drops below half time enrollment. the letter is sent certified mail. This notification includes a link to the Federal Deirect Loan website for exit counseling.
A subsidized loan means the student is not charged interest on the loan during the following periods:
During the periods indicated above, the student is eligible to file a deferment, which authorizes the student’s payments to be postponed. The federal government “subsidizes” the interest during the deferment period.
An unsubsidized Federal Direct Stafford Loan is not based on financial need. The student is charged interest from the time the loan is disbursed until it is paid in full.
If the student allows the interest to accumulate, it will be capitalized. This means interest will be added to the principal amount of the loan and additional interest will be based on the higher amount. This will increase the total repayment amount of the loan. The student who chooses to pay the interest as it accumulates will repay less on the loan.
The interest rate for subsidized loans is fixed at 5.6.0%; unsubsidized loans have a fixed rate rate of 6.8%. Student borrowers are also charged a net fee of .5% on the loan. These fees are deducted from each loan disbursement. This fee paid to the federal government to help offset the cost of the loan. Also, if the student does not make payments when required, he/she will be charged collection costs and late fees.
Loan Limits*
The following loan limits apply to the Federal Direct Stafford Loan:
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$5,500/year for first-year students who have completed less than 32 credit hours ($2,000 of this amount can be in additional unsubsidized loan)
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$6,500/year for students who have completed at least 32 credit hours, including transfer credits, from another college ($2,000 of this amount can be in additional unsubsidized loan)
*Because Macomb Community College is concerned about student loan defaults and increased debt levels of student borrowers, the College has adopted lower limits and stricter loan eligibility requirements. Students should review the loan policy for these requirements. Students denied a Stafford loan based on these guidelines can file a letter of appeal to the Director of financial aid.
Parent Loans for Undergraduate Students (PLUS)
Parents of dependent students can borrow from the PLUS Loan program. The terms and conditions include:
• Requirement that the parent borrower not have an adverse credit history (a credit check will be conducted) and
• A fixed interest rate of 7.9%
Eligibility requirements for the parent borrower include:
• A United States citizen or eligible noncitizen
• Not in default on a federal student loan and
• Not owe a refund on a federal education grant
• The student must meet Macomb Community College’s Satisfactory Academic Progress policy
To apply for the PLUS loan, the parent borrower must do the following:
• File a Free Application for Federal Student Aid (FAFSA) for the student attending Macomb Community College
• Complete the Federal Direct PLUS Loan Request Form. This form contains a Consent to Obtain Credit Report, which the borrower must sign.
The maximum loan amount is the student’s cost of attendance minus any other financial aid the student receives.
Parent borrowers can review the Federal Direct PLUS Loan Request Formfor further information on this loan program.
Students or parents who receive a Federal Direct Stafford loan or Parent Loan for Undergraduate Students (PLUS) will have their loan data submitted to the National Student Loan Data System (NSLDS), a central data base for student aid information. This loan information will be accessible to guaranty agencies, eligible lenders and eligible instituions of higher education as determined by the Secretary of Education to be authorized users of the NSLDS.
Private Loans
There are some instances when a student may not qualify for a Federal Direct Stafford Loan. There are private education loans available to students from private banks and credit unions. The financial aid office certifies the amount a student can borrow, based on the cost of attendance.
Students are cautioned to be suspicious of unsolicited loan offers. Student loan debt can accumulate quickly and result in a lifetime burden of high payments and credit denials for automobile purchases, credit cards, and home mortgages. To avoid these problems, read and understand the terms and conditions of all loans.
Students are encouraged to borrow from the Federal Direct Stafford Loan, which has more favorable interest rates and repayment options.
The student may request the form required under section 128(e)(3) of the TILA - Truth in Lending Act, and information to complete the form, to the extent Macomb Community College has this information.
for names of participating lenders.