Federal Direct Student Loan Program
Lord Fairfax Community College (LFCC) participates in the William D. Ford Federal Direct Loan Program, offered through the Department of Education. Federal Stafford loans are monies that a student borrows. Federal Direct PLUS loans are monies that a parent borrows to assist their undergraduate student. Both loans are financial obligations that must be repaid with interest. Federal Education loans offer benefits not provided by private/alternative loans:
- Lower interest rates
- Longer repayment terms
- Deferment and Forbearance options
- Early loan forgiveness for graduates working in public service
Students with financial need can obtain a subsidized Federal Direct Stafford Loan. This means the U.S. Department of Education will pay the interest charges on this type of loan as long as the student is enrolled at least half-time (six or more credits) and during a six-month period following enrollment (grace period) as well as during periods of approved deferment. At the end of the grace period, repayment of the loan will begin and interest begins to accrue to the student borrower. Repayment may extend up to ten years but borrowers must make payments of at least $50 per month.
Students who do not qualify for the subsidized (need-based) Federal Direct Stafford Loan can obtain an unsubsidized (non need-based) Federal Direct Stafford Loan. Unsubsidized Loan students are responsible for the interest obligation while enrolled. The student, while enrolled on at least a half-time basis (six or more credits), may pay interest only or have the interest capitalized (added to the principal).
As a result of legislation enacted in July 2012, eligibility for the Direct Loan interest subsidy will be limited for new borrowers effective July 1, 2013. The law restricts the period of time for which a borrower may receive subsidized loans, in the aggregate, to 150 percent of the published length of the student’s current educational program. Once the student reaches that limit, he or she may borrow only unsubsidized loans, and interest begins to accrue on the student’s outstanding subsidized loan.
First time Federal Direct Stafford loan borrowers at LFCC must complete an Entrance Loan Counseling Session and ALL Federal Direct Stafford loan borrowers must complete an Exit Loan Counseling Session upon graduation or withdraw. Repayment begins six months after a student leaves school because of graduation, other reasons, or drops below half-time level. All loan applicants must have completed a Free Application for Federal Student Aid (FAFSA) form and may not have defaulted on prior loans or borrowed their maximum lifetime amounts as determined by the Federal government. Students may not borrow more than the cost of their education minus other financial aid awarded them. The Financial Aid Office must approve all federal loans and reserves the right to refuse loan applications due to academic deficiency or evidence that a student may have difficulty managing loan debt. To apply for a Direct Stafford Loan, students must meet basic eligibility criteria.
Federal Stafford Loans are intended to help students and families offset the rising cost of college tuition and appropriate counseling must be completed prior to the certification of a Federal Stafford Loan. A student must be enrolled for at least six credits in an eligible certificate or degree program and be making Satisfactory Academic Progress (SAP) in order to be eligible for a Federal Stafford Loan.
Federal Stafford Loans are not to be used as a mechanism for securing enrollment for a student who files their FAFSA late (July 1st-Priority Filing Date). A student must have a payment method in place to pay for classes at the time tuition is due.
The Federal Direct PLUS Loan program is a non-need-based source of loan funds for the parent(s) of dependent students. Federal Direct PLUS Loans may be used in conjunction with Federal Direct Stafford Loans.
Each year, parents of dependent students may borrow an amount not to exceed the cost of attendance less any financial aid (including Federal Direct Stafford Loans).
- A Master Promissory Note is required.
Repayment begins 60 days after the final disbursement is made unless the parent borrower makes other arrangements with their lender to defer repayment. The Federal Direct PLUS Loan on the undergraduate level is only available to parents.* Guardians are ineligible. A credit check is performed on all parental borrowers, and pre-approval is required.
*An eligible parent is defined as the biological or adoptive parent of an undergraduate student. In some cases, a step-parent may be eligible to apply for a PLUS loan. While the custodial parent completes the FAFSA form, a non-custodial parent may be the parent who applies for the PLUS loan. However, the amount eligible to borrow will be based off of the custodial parent’s FAFSA form results.
Federal PLUS Loans are not to be used as a mechanism for securing enrollment for a student who files their FAFSA late (July 1st-Priority Filing Date). A student must have a payment method in place to pay for classes at the time tuition is due.
PLEASE NOTE: This loan is in the parent’s name and the parent will be responsible for repayment of the loan. The loan cannot be transferred to the student.
LOAN COUNSELING (REQUIRED):
Other Helpful Direct Student Loan Program Links:
- PIN Website
- General Information
- Budget Calculator: Use this to get an idea of your college expenses.
- National Student Loan Data System
- Servicing Information
- Account Information
- Repayment Plans & Calculator
- Consolidation Information