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Exit Counseling | Maximum Loan Amounts | Repayment Terms
Ways to Repay a Federal Direct Loan | Loan Consolidation |Code of Conduct for Processing Student Loan Applications
William D. Ford
Federal Direct Loan Program
Since 1995-96, Schenectady County Community College has participated in the William D. Ford Federal Stafford Direct Loan Program. Under this program, students borrow money from the federal government to pay for their college costs. The U.S. Department of Education makes the loans, through the College, directly to the students. The College will use the student's Direct Loan to pay college charges and will give the student any remaining money for living expenses.
Additional information on Federal Direct Loans is available from the Department of Education at http://www.ed.gov/DirectLoan or 800-848-0979.
Federal Direct Subsidized Stafford Loans
These are based on financial need. The government will pay the interest on the loan while the student is in school.
Federal Direct Unsubsidized Stafford Loans
Students get Federal Direct Unsubsidized Stafford Loans regardless of need, but will have to pay all interest charges.
Federal Direct PLUS Loans (Parent Loans for Undergraduate Students)
Parents of dependent students can borrow a Federal Direct PLUS Loan to help pay for their child's education.
All students must complete the Free Application for Federal Student Aid (FAFSA) by using “FAFSA on the Web” at http://www.fafsa.ed.gov. Once the FAFSA has been completed and SCCC has the results, the student loan application process consists of five basic steps:
Step 1. Locate or apply for your Federal PIN (sent to you by the U.S. Dept. of Education)
Step 2. Complete your online loan entrance counseling (required for first time borrowers)
Step 3. Complete and sign your electronic Master Promissory Note (if not already signed)
Step 4. Accept your student loan on the SCCC web site or complete your Request for a Federal Direct Student Loan form
Step 5. How much should I borrow?
Step 1. Locate or apply for your Federal PIN
You should have received a Federal PIN from the U.S. Dept. of Education shortly after the first time that you completed a Free Application for Federal Student Aid (FAFSA). The PIN serves as your electronic signature and holds the same legal status as your written signature. You should keep your PIN in a safe place and not share it with anyone.
If you do not have a PIN, go to http://www.pin.ed.gov and choose either “Apply for a PIN” if you have never had one or “Request for a Duplicate PIN” if you had one but do not know it. You will need to submit your name, social security number, date of birth, and email or mailing address. When you apply for a PIN, you will be given an opportunity to select your own PIN. It is recommended that you choose your own PIN number since it is activated faster.
Step 2. Complete your Online Entrance Counseling
Every first time Federal Direct Loan borrower must complete student loan entrance counseling. Borrowing a student loan is a serious financial obligation, and the entrance counseling will provide you with the important information you need to know to be able to make an informed decision about student loan borrowing. The entrance counseling must be completed before the Financial Aid Office will accept and process your loan application.
Complete your online entrance counseling at the Federal Direct Loan website at www.studentloans.gov. The tutorial reviews basic facts about Federal Direct loans and your rights and responsibilities as a borrower. It will also assist you in determining how much that you will need to borrow by giving you information about costs, budgeting and repayment terms. The tutorial will take approximately 20-30 minutes. You will need to read each section carefully in order to answer the required questions at the end of each topic.
Once you have completed the Entrance Counseling, you may request to have the confirmation of completion sent electronically to Schenectady County Community College. If it was previously completed for another college, you can have the confirmation sent to Schenectady by clicking on Notify Additional School. You should also print a copy of the confirmation for your records.
Step 3. Complete and Sign your Electronic Master Promissory Note (MPN)
First time Direct Loan borrowers need to sign a Federal Direct Loan Master Promissory Note (MPN). If you have already signed a Federal Direct MPN previously for SCCC or another Direct Loan college (online or paper) within the last 10 years, you do not have to complete a new MPN.
Students now are able to sign their MPN electronically on the web at http://www.studentloans.gov. Go to: “Complete New MPN for Student Loans”. To complete an electronic MPN, students will need to use their U.S. Dept. of Education issued PIN. Students who do not have a computer or the appropriate software may use computers available on campus to complete the process.
Completing an electronic MPN is very simple and easy. You must complete the entire process in a single session so be prepared and give yourself plenty of time. If you exit the site before signing your electronic MPN, you will be required to start over from the beginning.
IMPORTANT: Before beginning your electronic MPN session:
Have your federal PIN ready. If you misplaced your PIN, see the instructions on how to obtain a new PIN.
Be ready to provide two references (name, address, and telephone number). These should be people who have known you for at least one year (preferably relatives) who live at different addresses.
Remember to always use your full legal name as it appears on your social security card.
Paper Option: If you do not wish to sign your MPN with your PIN, you may request that the Financial Aid Office print a copy of your MPN. The printed copy will be mailed to your home address for your signature, but this will delay the processing of your loan application.
Step 4. Accept Your Student Loans
Students may Accept, Reduce or Decline their student loans directly on the SCCC web site www.sunysccc.edu under the Financial Aid tab. Students should click on "On the Web" and sign on using their SCCC student ID number and a SCCC PIN that they can set up. Once the students are logged in, they will have full access to their financial aid information including their student loan eligibility.
Students who are applying for loans other than for the full year (September through May) cannot accept their loans on the web site. They may print out the Request for Federal Direct Loan form and mail the completed form to the Financial Aid Office (Elston Hall Room 222) for processing.
The Federal Direct Loan Request Form
This form is in an Adobe Acrobat .pdf format. If you are unable to view .pdf files please download Adobe's free Acrobat Reader by clicking on this link: Free Adobe Acrobat Reader.
Step 5. How Much Should I Borrow?
The majority of college students will require student loans to help meet their educational expenses, and the average four year college graduate has over $25,000 in student loan debt. This amount of debt can have a significant impact on the student life style after college. The question of how much to borrow needs to be very carefully considered by the student. The following are some guidelines for the student:
- Do Not Over Borrow! Borrow only what you need for your current school year educational expenses. If your expenses increase later, you can always request a second loan application up to your maximum eligibility.
- Final Student Loan Debt Total: Consider how much you will need to borrow to meet all of your educational goals, whether it be an associates, bachelors, masters degree, or beyond.
- Consider what your monthly payments will be on the loan when it comes time to repay the loan.
- Consider what other expenses you will have after graduation? Housing, food, transportation, insurance, credit cards, car payments, etc.
- Consider what the average starting salary is for the career field you plan to enter when you complete your college education.
- Resist the temptation to use your student loans for other things beyond your immediate educational expenses.
What you need to know about repaying student loans:
Detailed information on repaying student loans can be obtained from the U.S. Department of Education web site at http://studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsp?tab=repaying
The U.S. Department of Education also offers a repayment calculator that can be useful for students to estimate what their monthly loan repayment amounts may be. http://studentaid.ed.gov/PORTALSWebApp/students/english/OtherFormsOfRepay.jsp
Dependent Student - A first year Dependent student (parent information is required on the FAFSA), with less than 30 earned or transfer credits, may borrow up to $5,500 per year with a maximum of $3,500 of that amount being in a subsidized loan. Second year dependent students, with at least 30 earned or transfer credits, may borrow up to a maximum of $6,500 per year with a maximum of $4,500 of that amount in a subsidized loan. A dependent undergraduate student may only borrow up to an aggregate limit of $31,000.
Independent Student - Independent students (parent information is not required on the FAFSA) may have up to an additional $4,000 in unsubsidized loans per year. A first year independent student, with less than 30 earned or transfer credits, may be eligible to borrow up to $9,500 per year with a maximum of $3,500 of that amount being in a subsidized loan. Second year independent students, with at least 30 earned or transfer credits, may be eligible to borrow up to $10,500 per year with a maximum of $4,500 in a subsidized loan. An independent undergraduate student may only borrow up to an aggregate limit of $57,500.
- be a U.S. citizen or permanent resident alien;
- be taking at least six credit hours and be matriculated in a degree or certificate program;
- not owe any refunds on a Pell Grant or other awards received and not be in default on repayment on any type of student loan.
Each new student loan recipient will be required to complete entrance counseling before a loan application is processed and attend an exit interview when graduating or terminating from school.
Federal regulations require that all student loan borrowers must have an exit interview/exit counseling during their final semester at the College. All borrowers should plan to attend exit counseling with the Financial Aid Office at this time. During the exit counseling, students are reminded of their rights and responsibilities as a student loan borrower. Exit Counseling topics include: when repayment starts, various repayment plans, deferments, loan consolidation, and consequences of default.
Students can access the online Exit Counseling at http://www.studentloans.gov/. This will satisfy all requirements for exit counseling and give the borrower up to date information on their student load balances. This is the quickest and easiest way to satisfy the exit counseling requirement.
The fixed interest rate for subsidized Federal Direct Loans is 3.4% (2011-2012) and unsubsidized Federal Direct Loans is 6.8%. In addition, all Federal Direct Loans are charges an origination fee of 1.0%. With the current rebate allowances for on time payments of 0.5%, the actual origination fee charged is 0.5%.
For a Federal Direct PLUS loan, the fixed interest rate is 7.9%. In addition, the Federal Direct PLUS loan has an origination fee of 4%. With the current rebate allowances for on-time payment, the actual up-front origination fee charged is 2.5%.
A standard repayment plan has a fixed monthly repayment amount for a fixed period of time, usually 10 years.
An extended repayment plan has a lower fixed monthly payment amount, and loan repayment can be extended beyond the usual 10 years.
A graduated repayment plan usually begins with lower monthly payments, and payment amounts increase at specified times. Payments may be the usual 10 year period, or they may be extended beyond the usual 10 years.
Income-contingent repayment plan sets annual repayment amounts based on the borrower's income after leaving school. The loan is repaid over and extended period of time, not to exceed 25 years.
A servicing agency will be responsible for maintaining the loan account and repayments. It is the student's responsibility to maintain contact with that agency.
Students who have previously borrowed FFELP student loans through a lending institution and who are now borrowing a Federal Direct Loan are encouraged to consolidate all of their student loans into one Federal Direct Consolidation Loan. This will help the borrower avoid the situation of owing two separate loans to two different lenders. Borrowers who are interested in consolidation of all their student loans into one Consolidation Loan can contact the U.S. Department of Education for more information at http://loanconsolidation.ed.gov.
Schenectady County Community College (SCCC) has participated with the William D. Ford Federal Stafford Direct Loan Program since 1995. Since our students only use Federal Direct Loans, the College does not use lending institutions or have a need for a preferred lenders list. The College does, upon student request, certify student eligibility for private alternative loans. Since these loans use various lending institutions, the College is publishing the following Code of Conduct for Processing Student Loans to ensure that its employees avoid the perception of a conflict of interest in connection with their responsibilities related to providing and administering student loans.
- SCCC does not enter into a revenue-sharing arrangement with any lender.
- No SCCC employee in the financial aid office, or who otherwise has responsibilities with respect to education loans, will solicit or accept any gift or other thing of value from a lender, guarantor, or servicer of education loans. Certain items provided or contributed by lenders are not considered gifts, such as training materials or, philanthropic contributions unrelated to education loans.
- No SCCC employee in the financial aid office, or who otherwise has responsibilities with respect to education loans, will accept from any lender any fee, payment or other financial benefit as compensation for any type of consulting arrangement or other contract to provide services to a lender.
- SCCC will not select, assign or refer a student to a particular lender or refuse to certify, or delay certification of, any loan based on the borrower’s selection of a particular lender or guaranty agency.
- SCCC will not request or accept from any lender any offer of funds to be used for private education loans to students in exchange for the campus providing concessions or promises to the lender.
- SCCC does not request or accept from any lender assistance with call center staffing or financial aid office staffing.
- No SCCC employee in the financial aid office, or who otherwise has responsibilities with respect to education loans, and who serves on an advisory board, commission, or group established by a lender or guarantor, will receive anything of value for such service.
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