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Federal Stafford Loans
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.
See also: Information on SMC’s process for applying for a PLUS LOAN
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LOAN DOCUMENTS
PLUS Loan Request Form
Loan Reference Form
Participating Lenders List
Loan Budget Worksheet
Repayment Chart
RELATED LINKS
EDFund EdTest
NSLP
_LOAN WORKSHOPS
Fall Semester 2009 |
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 requested documents, ask for a "Loan Request Packet."
- The "Loan Request Packet" can be completed and then submitted, along with an Educational
Plan from an SMC Academic Counselor, a Student Loan Budget Worksheet, and other
documents.
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 requests 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 from a lender.
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 |
| Student in Year 2: $4,500 |
30 - 59 |
$4,500 |
* SMC's Loan Debt Management Plan recommends a cumulative loan threshold of $11,000.
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Annual Additional Unsubsidized Stafford Loan limits are: |
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Dependent Students in Year 1 or Year 2 |
$2,000 |
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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
in school, during the 6 months grace period and deferment periods.
For unsubsidized Stafford Loans, the borrower must pay interest.
There are 2 options for paying the interest.
a)The borrower can pay while in school, during the 6 months grace and deferment periods,
or
b) the borrower can allow the interest to accrue and it will capitalize at repayment.
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. Can I get a better loan by using another lender?
The loan terms are the same for all lenders, however each lender may offer different
customer service benefits.
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
attend SMC.
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