Stafford Loans are federal student loans made available to college and university students to supplement personal and family resources, scholarships, grants and work-study. Stafford loans may be subsidized by the U.S. Government or unsubsidized depending on the student's need.
Federal PLUS Loans
The PLUS loan is for the parents of dependent students. The interest rates are fixed at 8.5%. Repayment on PLUS loans begins 60 days after the second disbursement of the loan.
Guidance for applying for a PLUS LOAN
TOP TEN SMC STUDENT LOAN QUESTIONS
1. How do I apply for a Stafford Loan at SMC?
Complete and submit the Free Application for Federal Student Aid (FAFSA) to the federal processor.
* After SMC receives the information regarding your federal aid application, you will be sent an electronic tracking letter requesting certain documents.
* While submitting all of the initial requested financial aid documents, download the Loan Documents (Stafford Loan Request Form, Loan Reference Form and Loan Budget Worksheet) from this website.
* The completed Loan Documents can then be submitted along with an Educational Plan from an SMC Academic Counselor.
Please Note: Your loan request documents go to a committee for assessment. Students awarded a Stafford Loan are sent an award letter and guidance for completing an Entrance Loan Workshop and a Master Promissory Note.
2. How long will it take to process a loan application?
Loan request are reviewed on a case-by-case basis. Once the Loan Committee has made a determination, the actual processing of the loan takes 3 to 4 weeks before SMC receives a check.
3. How much can I borrow for attendance at SMC?
Basic Stafford Loan Levels are as follows:
| Grade Level |
Degree Applicable Units Completed |
Loan Limits |
| Students in Year 1: $3,500 |
0 - 29 |
$3,500 |
| Students in Year 2: $4,500 |
30 - 59 |
$4,500 |
* SMC's Loan Debt Management Plan recommends a cumulative loan threshold of $11,000.
| Annual Additional Unsubsidized Stafford Loan limits are: |
| Dependent Students in Year 1 or Year 2 |
$2,000 |
| Independent Students in Year 1 or Year 2 |
$6,000 |
4. What happens if I transfer to another college during the same academic year?
You must cancel any pending loans at SMC and contact the new college to find out how to be awarded financial aid there including loans.
5. What is the difference between subsidized and unsubsidized Stafford Loans?
For subsidized Stafford Loans, the Federal Government pays the interest while the borrower is in school, during the 6 month grace period and deferment periods.
6. What is the interest rate on Stafford Loans?
The interest rates are as follows:
| Loan First Disbursed |
Subsidized |
Unsubsidized |
| 7/1/2008 - 6/30/2009 |
6.0% |
6.8% |
| 7/1/2009 - 6/30/2010 |
5.6% |
6.8% |
| 7/1/2010 - 6/30/2011 |
4.5% |
6.8% |
| 7/1/2011- 6/30/2012 |
3.4% |
6.8% |
7. When do I have to begin repaying a Stafford Loan?
Repayment begins 6 months after graduating, withdrawing, or dropping to less than half-time enrollment status.
8. I've heard information on the news about the Direct Loan Program. What is that?
Effective July 1, 2010 - All Stafford Loans will be processed by the DIRECT LOAN PROGRAM which is an agency within the Federal Government. Loans will no longer be processed by banks or credit unions.
9. What are the consequences of not repaying a student loan?
* You will be reported to a credit bureau having a negative effect on your credit rating.
* You can be referred to a collection agency and have to pay collection costs.
* Your employer may garnish your wages.
* The Internal Revenue Service may withhold your state and federal income tax returns.
* The entire unpaid amount of your loan, including interest may become due and payable immediately.
* You will lose your rights to deferments.
* You will be ineligible to receive any additional federal or state financial aid.
10. Do I have to attend any "entrance" or "exit" loan workshops or meetings? As part of SMC's Default Management Plan, loan recipients are required to participate in a Loan Entrance Workshop each year that they request a student loan.
In addition, all student loan recipients are required to attend an Exit Interview each year that they are a loan recipient while attending SMC.