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About Loans

Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (the Department), though the entity you deal with, your loan servicer, can be a private business.

With Direct Loans, you

  • Borrow directly from the federal government and have a single contact—your loan servicer—for everything related to repayment, even if you receive Direct Loans at different schools.
  • Have online access to your Direct Loan account information via your servicer's website.
  • Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.

How to Apply for a Student Loan (Federal Direct Loan)

  1. Apply for financial aid (FAFSA) online at http://www.fafsa.ed.gov/.
  2. Receive a postcard from RSCC Financial Aid Office requesting information to complete file.
  3. Submit requested forms (loan application will not be processed until your FAFSA file is complete and verified in our office)
  4. Enroll in a minimum of 6 hours
  5. All academic transcripts from previously attended colleges should be received and evaluated.
  6. Submit loan application accessible by clicking on the link above.
  7. Allow at least 2 weeks to certify loan.
  8. Check your RaiderNet email for instructions as to when to complete Entrance Counseling and electronically sign MPN (if required).
  9. Make arrangements to cover your fees if funds are inadequate by deadlines posted in class schedule.

Terms & Definitions

  • Accrued Interest: the interest that accumulates on the unpaid balance of a loan(s).
  • Capitalization: Adding unpaid interest to the loan principal. Capitalization increases the principal amount of the loan and its total cost.
  • Default: failure to repay your loan(s) according to the terms of the promissory note. To recover money the school, lender or loan servicer, and/or state or federal government may pursue legal action.
  • Deferment: temporary postponement of your student loan repayment by your lender or loan servicer. You will need to contact your lender or loan servicer regarding the qualifications and requesting a form.
  • Disbursement: the lender releases funds to the school on your behalf.
  • Forebearance: permission from your lender or loan servicer to postpone, reduce, or extend loan repayment because of a serious hardship. Interest will continue to accrue during the forebearance. You will need to contact your lender or loan servicer regarding the qualifications and requesting a form.
  • Promissory note: A legally binding contract between a lender and a borrower. The promissory note contains the terms and conditions of the loan, including how and when the loan must be repaid.
  • Subsidized Direct Loan: A loan for students with financial need as determined by federal regulations. No interest is charged while you are in school at least half-time, during your grace period, and during deferment periods.
  • Unsubsidized Direct Loan: A student loan that is not based on financial need. Interest is charged during all periods.

 


 

FAQs for Direct Lending

How does repayment work if I have Federal Family Education Loans (FFEL) and Direct loans?

You will have to make separate payments to each lender.  You can also choose to consolidate with the Direct Loan program if you would like to make only one monthly payment.

How can I consolidate my loans with the Direct Loan program?
You may go to studentloans.gov for more information regarding consolidation.

Where can I find information about who services my other federal loans?
You can find information about the servicers of your other loans at www.nslds.ed.gov.  You will use your pin number from the FAFSA to access your information.

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