Financial Aid - Direct Loan Program
As a result of the Health Care and Education Reconciliation Act, beginning July 1, 2010, federal student loans will no longer be made by private lenders under the Federal Family Education Loan (FFEL) Program. Instead, all new federal student loans will come directly from the U.S. Department of Education under the William D. Ford Direct Loan Program.
This change does not impact the process of applying for federal grants, loans and work-study or the amount of federal aid that students are eligible to receive. Students interested in receiving federal student aid should continue to complete a Free Application for Federal Student Aid (FAFSA) for each school year that they wish to be considered for aid.
The types of Direct Loans are subsidized, unsubsidized, PLUS (parent) loans and Direct Consolidation loans. At SFCC, we work primarily with Direct Subsidized and Direct Unsubsidized loans. Detailed information on all of these loans can be found at the following website: http://www.direct.ed.gov/student.html.
Direct Subsidized Loans:
Subsidized loans are for students with demonstrated financial need as determined by federal regulations. Interest is not charged while you are in school at least half time (6 credit hours) and during deferment periods. The federal government will pay (subsidize) the interest for you during these periods.
Direct Unsubsidized Loans:
Unsubsidized loans are not based on financial need. Interest is charged during all loan periods.
You have the choice to pay the interest on these loans while you are in school, or you can defer the interest payment until the loan enters the repayment period. Deferred interest is capitalized when the loan enters the repayment period.
Capitalization means that the unpaid interest on the loan is added to the principal balance. Capitalization increases the principal amount of the loan and its total cost. Generally, SFCC encourages the student to pay the interest on unsubsidized loans to minimize the increased costs of these loans.
Direct Plus loans are unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Detailed information regarding Direct PLUS loans can be found at the following website: http://www2.ed.gov/offices/OSFAP/DirectLoan/parent.html.
Link to more Parent Plus Loan Information.
The New Mexico Higher Education Department offers several loan forgiveness programs for professions that are in high demand, especially in New Mexico rural communities. A complete list of the loans for service programs from the HED can be found at http://www.hed.state.nm.us/LFS.aspx . Of particular interest to Santa Fe Community College students are the Nursing Loans for Service and the Teacher Loans for Service programs.
Link to more Loans for Service information.
To qualify for student loans, the student must meet the following requirements:
- Have a current FAFSA with the Financial Aid Office
- A complete financial aid file
- Be enrolled in a minimum of 6 credit hours
- Have a major declared in and AA or AAS degree program
- Be making Satisfactory Academic Progress
- Not be in default for any federal student loan or in overpayment for the Pell Grant
- Not exceed Undergraduate Maximum Aggregate borrowing limit for student loans
- Have a completed Student Loan Application (http://www.sfcc.edu/financial_aid)
- Have a completed Master Promissory Note (https://studentloans.gov/myDirectLoan/index.action)
- Have completed Undergraduate Entrance Loan Counseling (https://studentloans.gov/myDirectLoan/index.action)
The amount that you can borrow depends upon several factors:
- Dependency Status
- Class Standing
- Borrowing History
- Calculated EFC (Estimated Family Contribution)
- Unmet need
The Department of Education deems a student independent if any of the following criteria apply:
- A student at least 24 years old
- A Graduate or Professional student
- A veteran or on active duty for the military
- An orphan
- A ward of the court
- One who has legal dependents other than a spouse
- Supporting their children
- An emancipated minor
- In legal guardianship
- An unaccompanied youth by school or by HUD
- At risk of homelessness
If any of these apply, the student needs to be capable of demonstrating his/her circumstances. If none of these apply, a student is dependent.
Your subsidized loan eligibility depends upon whether you are in freshman or sophomore standing at SFCC.
You are a freshman if you have completed less than 33 credit hours, including transfer credits, audited classes, and developmental coursework.
You are a sophomore if you have completed 33 college level credit hours or more. This excludes audited, pass/fail, and developmental courses.
Please refer to the grid below for the maximum amounts you may borrow each academic year.
|Student Status||Direct Subsidized||Direct Unsubsidized||Total for the academic year|
Please note; these are the maximum amounts available each academic year. The amount you actually receive may be less.
The first step to apply for student loans is to fill out the Free Application for Federal Student Aid (FAFSA) at: http://www.fafsa.ed.gov.
Once your FAFSA is complete and your financial aid is packaged, complete Undergraduate Entrance Loan Counseling and sign a Master Promissory Note (MPN) for Direct Loans at the following website: https://studentloans.gov/myDirectLoan/index.action
Finally, you will need to complete the Santa Fe Community College loan application. This will help us determine how much you want to borrow as well as your eligibility. Please remember to request only the amount of money that you wish to borrow. You will be required to pay this money back with interest!
The link to the SFCC loan application is: http://www.sfcc.edu/financial_aid.
- SFCC will disburse your loan in two equal installments, generally, one in the fall term and one in the spring.
- Your loan money must first be used to pay for any balance owed to SFCC, such as tuition, fees and textbooks. If loan funds remain, you will receive them by check or direct deposit (depending on your instruction) on our regularly scheduled disbursement days along with any other aid you may be receiving.
- Loans that cover one term will only be disbursed in two equal amounts. In this case, you will receive your second check shortly after midterm.
- Your student loan will not disburse until you are attending 6 credit hours. If you are enrolled in late starting classes, your disbursement may be delayed.
Link to Rates and Fees Information
Repayment on your student loans begins when you:
- Leave school
- Drop below half-time enrollment
You have a six month grace period before repayment begins. During the grace period on subsidized loans, you do not accrue interest and you do not have to make payments.
During the grace period on unsubsidized loans, you do accrue interest. If you have chosen to pay the interest as you go on your unsubsidized loans, you will continue to make the interest payment during your grace period. After your grace period, you will make principal and interest payments.
If you choose to defer the interest payments on your unsubsidized loans, interest will continue to accrue during the grace period and will be capitalized at the end of the grace period. You will not be required to make payments during the grace period.
More detailed information regarding direct student loan repayment can be found at https://studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsp.
Once your loans are established the Department of Education may sell your loan to a loan servicer. If or when your loan is sold, the loan servicer should contact you. If you are not contacted you may determine who your loan servicer is through the National Student Loan Database, http://www.nslds.ed.gov/nslds_SA/.
You should be able to get contact information for your Direct Loan Servicer from NSLDS. You may also gain information regarding your student loans from the Direct Loan Servicing website: https://www.dl.ed.gov/borrower/BorrowerWelcomePage.jsp
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled.
Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe. Here are some consequences of default:
- National credit bureaus can be notified of your default, which will harm your credit rating, making it hard to buy a car or a house
- You would be ineligible for additional federal student aid if you decided to return to school
- Loan payments can be deducted from your paycheck
- State and federal income tax refunds can be withheld and applied toward the amount you owe
- You will have to pay late fees and collection costs on top of what you already owe
- You can be sued
For more information and to learn what actions to take if you default on your loans see the Department of Education's Default Resolution Group website: http://www2.ed.gov/offices/OSFAP/DCS/index.html.
To E-mail Financial Aid:
Federal regulations require that all financial aid inquiries come from your school e-mail address. Please e-mail all financial aid questions from your SFCC email account.
Log into JACK, access email account in upper right hand corner, and create a new email using "email@example.com" in the address bar.
For more information please contact the Financial Aid office, 505-428-1268.