Federal Loans

Student loans can be used to pay for a variety of costs associated with your college education, such as tuition and fees, room and board, books and supplies, transportation, and the purchase of a computer or software. However, while borrowing funds may be a wise investment, it deserves careful consideration; all student loans must be paid back, including interest and fees. Before deciding to take out a loan, be sure to look for free money first, such as grants and scholarships, and speak to a CCV financial aid counselor about other funding options.

Types of Federal Loans

Federal Direct Loans are available to students who qualify for federal financial aid and are enrolled in at least six credits per semester. If you decide to borrow, there are two types of Federal Direct Loans: subsidized and unsubsidized. Eligible parents of dependent students can also take out Direct Parent PLUS loans.

Federal Subsidized Direct Loans

These loans are available based on your demonstrated financial need, determined by information provided on your FAFSA. The federal government will pay the interest on a subsidized loan while you are in school and completing your program successfully. There are limits on how much you can borrow based on your year in school.

Federal Unsubsidized Direct Loans

Unsubsidized direct loans are available for students who don’t demonstrate financial need. You are responsible for all interest that accrues on the loan. You may choose to make interest payments while in school or defer interest payments, which will then be added to the principal of the loan. There are limits on how much you can borrow based on your year in school.

Federal Parent PLUS Loans

PLUS loans enable parents with good credit histories to borrow to help pay for their child’s college expenses. The student must be enrolled at least half-time and in a degree program. Parents can borrow up to the student’s full cost of education less other types of financial aid. If your family is interested in borrowing a Parent PLUS loan, please contact a financial aid counselor at your local CCV academic center.

Steps to Apply For a Loan

A student must be enrolled in at least six credits and have completed a FAFSA. You can also follow the steps on CCV’s loan instruction sheet.

  1. Complete BOTH the Master Promissory Note and Loan Entrance Counseling for Subsidized/ Unsubsidized loan type at studentloans.gov.
  2. After completing the Master Promissory Note and Entrance Counseling, contact the financial aid counselor at your CCV center to determine the amount you need to cover your tuition, fees, books, and other qualified expenses.
  3. Once the semester begins, go to class! Attendance in six credits is needed to maintain eligibility for your loan.

Frequently Asked Questions

What is the interest rate?
Interest rates are typically fixed for federal student loan and change depending on when your loan was taken out. The federal government maintains an ongoing chart of interest rates.
What is a Loan Servicer?
A loan servicer is a company that handles the billing and other services on your federal student loan. The loan servicer will work with you on repayment plans and loan consolidation and will assist you with other tasks related to your federal student loan. It is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.
Who is my Loan Servicer?
The National Student Loan Data System (NSLDS) will provide you with the name of your federal loan servicer as well as your complete financial aid history.
How much is my monthly payment going to be?
You can get exact estimates of your monthly payments or plan for the future by adding in anticipated student loans by using the Repayment Estimator on studentloans.gov.
What happens when I’m having difficulty repaying my loan?
There’s help available. It is important to ask for help as soon as you know making the timely payments is an issue. The best thing to do is to work with your loan servicer to discuss options which may include forbearance or consolidation or a modified payment plan.

There is also information on repayment and avoiding and resolving defaulted loans at studentloans.gov. CCV financial aid counselors can also answer questions you may have.

What if I have an issue with my loan servicer?
If you are unable to clarify or resolve a federal student loan issue, the Department of Education offers an ombudsman service available at:
http//studentaid.gov/repay-loans/disputes/prepare
Via telephone: 877-557-2575
Via fax: 606-396-4821
Via mail: FSA Ombudsman Group
P.O. Box 1843
Monticello, KY 42633
What repayment options are available?
There are a number of options that can change your repayment schedule, suspend, or reduce your payments. Eligibility varies depending upon the option you pursue. Please contact your student loan servicer to discuss repayment options in more detail.
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