Student loans are a form of financial aid that requires repayment of the funds received, usually with interest. All loans require a promissory note, and some require a separate application.
Federal Direct Stafford Loan
There are two types of Federal Direct Stafford loans: subsidized and unsubsidized. Both Subsidized and Unsubsidized Direct Loans carry a fixed interest rate of 3.76% for loans disbursed on or after July 1, 2016 and before June 30, 2017.
Up to 1.069% in fees is deducted from the Federal Direct Stafford Loan. Therefore, the actual amount the student receives is less than the amount borrowed. The Federal Direct Loan amount on your award letter is an estimate based on your number of course credits, demonstrated need from your FAFSA, and your academic grade level.
Students must complete the Entrance Counseling requirement before receiving Direct Loan funds. This entrance counseling requirement may be done online at www.studentloans.gov
Subsidized Direct Loans:
- Eligibility for a subsidized Direct loan is based on financial need as determined by the FAFSA.
- Subsidized Direct Loans allow for a deferment of principal payments while the student is enrolled as at least a half-time student in a degree-seeking program.
- Students are allowed a six-month grace period upon leaving college before making payments on principal of the loan.
- Interest subsidies while the student is in school are paid by the Federal Government.
Unsubsidized Direct Loans:
- Unsubsidized Direct loans allow for deferment of principal payments while the student is enrolled as at least a half-time student in a degree-seeking program.
- Students are allowed a six-month grace period upon leaving college before making payments on the principal of the loan.
IMPORTANT: Unsubsidized loans do not have an interest subsidy paid by the federal government. This means that interest will accrue on the loan during the in-school and six-month grace periods.
Students are strongly encouraged to make monthly interest payments on any unsubsidized loans while in school. Otherwise, the deferred interest will be capitalized, and this accrued amount will be added to the loan principal when repayment begins.
Please note that the average TOTAL amount students have borrowed from the Stafford Loan programs while completing an Associate's Degree at Harcum College is approximately $21,000.
Stafford loans require that the student borrower sign a Master Promissory Note (MPN) through an online process. Master Promissory Notes and Loan Entrance Counseling should be completed online at www.studentloans.gov.
Federal Direct PLUS Loans
The Parent PLUS Loan program enables a credit-worthy parent of a dependent student to borrow on the student's behalf. The Federal Direct PLUS loan interest rate is fixed at 6.31% for loans with a first disbursement on or after July 12, 2016 and before June 30, 2017. Up to 4.276% in fees is deducted from the Federal Direct PLUS Loan. Therefore, the actual amount the parent receives is less than the amount borrowed. Loan proceeds are electronically disbursed in two or three equal disbursements to the student's account, unless otherwise indicated. Generally, repayment on Parent PLUS loans begins within 60 days of the loan being fully disbursed, but a parent may be eligible for deferment while the student is attending at least half time.
Only parents of dependent students may borrow a Federal PLUS Loan. Parents can complete a Federal Direct PLUS MPN and application at www.studentloans.gov by clicking on "Complete PLUS Request for Parents." Parents must sign into the Direct Loan website using their own FSA ID and password.
Federal Perkins Loan
The Financial Aid Office awards Federal Perkins Loans to students based
on a combination of significant need as demonstrated on the FAFSA and
the availability of funds.
The interest rate for the Perkins Loan is 5%, and no interest
or principal payments are due until nine months after a student
graduates (or drops below half-time status).