Wednesday, September 17, 2014

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Federal Stafford Loans

Southwestern College participates in the Federal Family Educational Loan Program (FFELP) by offering subsidized Federal Stafford Loans. These loans are available to students who demonstrate financial need. Federal Stafford Loans are low-interest loans that help students pay for educational expenses and are insured by the state guarantee agency and by the federal government. The interest rates for loans disbursed after July 1, 2008 is fixed at 6.0 %.

The maximum eligibility for grade level 1 (0-29 college units completed) is $3,500 per academic year, and the maximum eligibility for grade level 2 (30 or more college units completed) is $4,500 per academic year. All borrowers are required to complete an Entrance and Exit interview each academic year.

In order to apply for a Federal Stafford Loan you must:

  • complete the FAFSA
  • have your financial aid processed and evaluated
  • receive an award letter
  • sign up for a loan workshop
  • be enrolled in at least 6 units
  • meet satisfactory academic progress
  • not be in default or any previously borrowed federal student loan or owe an overpayment on state and/or federal grants

Default
Taking out a Federal Stafford Loan will have an impact on your future credit and financial aid eligibility. Failure to make regular scheduled payments on your student loan can lead to a defaulted loan. Please make sure to contact your lender if you have any difficulties such as (economic hardship, unemployment, temporary disability and returning to school at least half time) in paying your loan. They will give you several options to temporary defer your loan payments.

Once your loan is defaulted the following will occur:

  • your credit will be damaged
  • you will not be able to apply or renew professional licenses
  • you can not receive Federal Financial Aid
  • the IRS will garnish your wages

For more detailed information on all of your student loan options including repayments and consolidation, please visit www.edfund.org