Loans

Loans are borrowed funds that must be repaid. By accepting a loan, the student is agreeing to the terms of borrowing and making a commitment to repay the funds borrowed. Students are encouraged to only borrow what is needed. Should a student want to lower the loan amount and borrow less than what is awarded, the student should submit a Revision Request Form.

Federal Direct Loan (FDL) recipients must maintain enrollment and attendance in at least six (6) credit hours during a semester in order to be eligible to borrow loan funds. In addition, the student must accept their loan award as well as complete the required Entrance Counseling and the Master Promissory Note.

Loans for students enrolled Less Than Full-Time

Beginning Fall 2026, new regulations will go into effect for all federal student loans, as outlined in the One Big Beautiful Bill Act (OBBBA) (H.R.1). Specifically, federal student loans for students enrolled less than full-time are subject to Schedule of Reduction (SOR) requirements. This means that loans for students enrolled less than full-time will be reduced in proportion to a student’s actual enrollment.

Factors included in the calculation to determine reduced eligibility:

• Financial aid is packaged assuming full-time (12 credits) enrollment
• Only courses required for the student’s program of study are considered eligibility for federal aid
• Calculation for each term will use actual enrollment for prior term and current term
• Student must enroll in (and attend) at least 6 required credit hours to be eligible for any portion of a federal loan.

Loans will be adjusted and paid out based on actual enrollment. The calculation to determine the amount of the reduction is below.

Example for Fall Schedule of Reduction:
A freshman student who is enrolled in 9 credit hours in Fall 2026, and an anticipated 12 credit hours in Winter 2027 would normally be eligible to borrow up to $3,500 in Federal Direct Subsidized Loan ($1,750 Fall, $1,750 Winter). HOWEVER, under the new law, HFC Financial Aid must prorate a student’s maximum eligibility based on actual enrollment:

1. Adjust annual loan maximum percentage to reflect lower credit hours. 21 credit hours anticipated new annual enrollment (9 credits Fall 2026 and assumed 12 credits Winter 2027) divided by 24 credits (what is considered full-time enrollment for federal aid) = 87.5% (rounded up to 88%). 88% of the initial full-time award of $3,500 = $3,080. This is the new annual maximum the student can borrow.

2. Determine the proportion of new annual amount the student is eligible to receive (9 credits/21 annual credits)($3,080) = $1,320. The portion of the $3080 that the student is eligible to receive for Fall 2026 for enrollment in 9 credit hours is $1,320.

It is important to note that Winter 2027 loans will be prorated using the same calculation, taking into account Fall 2026 enrollment. Classes dropped or failed during the Fall semester will reduce the amount a student is eligible to borrow for Winter.

Loan Adjustment Timeline

Loans will be prorated based on enrollment at the time they are paid out to the student’s account. This can vary, depending on when the student completes their financial aid file.

• 15-week and 1st 8-week Classes:
  Students enrolled in at least 6 required credits with loans offered and accepted will have loans prorated on 9/8/26 and again on 9/22/26. On both of those dates, loans will pay based on actual enrollment. If the students drops or adds a class in-between 9/8/26 and 9/22/26 loans will pay out or reverse accordingly. It is possible if the student drops a class during this time they will have to pay back a portion of the loan they previously received.

• 12-week Classes:
  Students who begin enrollment in their 6th credit hour beginning in 12-week classes and have loans both awarded and accepted will have loans prorated on 9/22/26.

• 2nd 8-week Classes:
  Students whose loans have paid out for 15-week and/or 12-week classes will not have additional loan payments onto their account. For those students enrolled in 2nd 8-week classes that wish to have 2nd 8-week credits count towards their loan eligibility, they must submit the Loan Recalculation Request Form. For students whose 6th credit hour begins with 2nd 8-week classes, loans will be prorated on 10/20/26.

• FA Offers Later in Semester or Loan Acceptance after Initial Disbursements:
  Students that receive their Financial Aid Offer and/or accept their loan offer after the initial dates listed above will have their loans prorated at the time the funds post to their account. This is usually 7-10 business days after the student accepts their loan (and have the MPN and Loan Entrance Counseling on file).

Loan Recalculation Requests

In the event a student’s enrollment changes after the initial proration has occurred, they can request a loan recalculation. This is a request to the Office of Financial Aid to manually review the student’s current enrollment and adjust loans accordingly. To make this request, the student must submit the Loan Recalculation Request Form.

It is important to note that if a student submits the Loan Recalculation Request Form, the calculation must take into account all current enrollment. That includes classes dropped during the semester, NA flags and grades already posted for the semester. That means it is possible the recalculation will result in the student having to return a portion of the loan funds already received for the semester.

Additional Loan Information

Students are encouraged to utilize a loan simulator to estimate what their loan payment might be based on the amount they are intending to borrow.

Students are also encouraged to minimize the amount of loans needed by utilizing grants, scholarships, and work-study whenever possible. HFC Financial Aid will include the Federal Pell Grant as part of the financial aid award if the student is otherwise eligible. In addition, there may be state grants or scholarships for which the student is eligible. While some state grants are listed on our website, a complete list of state scholarships and grants can be found at MI Student Aid (for Michigan residents). If you are not a resident of Michigan, you may locate information about what grants or scholarships are offered from your state on the State Higher Education Agencies list.

As a condition of participating in the FDL program, HFC is required to provide borrower [student and/or parent(s)] demographic and federal loan specific information to the National Student Loan Database System (NSLDS). NSLDS information is accessible to guaranty agencies, loan servicers, lenders and schools who are authorized professional users of the system. Students can view and manage their NSLDS personal loan histories through the Federal Student Aid website.

If you are requesting the reinstatement loan for a prior semester, the loan must have been originated prior to the end of the payment period, you must be currently enrolled, and you must have successfully completed a minimum of 6 credit hours with an earned letter grade of either an "A," "B," "C," "D" (including + or - grades), or an "S" in the prior semester. No loan proceeds can be accessed or applied to a student’s account later than 180 days after the close of a semester or when a loan record was not originated prior to the student ceasing to be enrolled.

Just prior to graduation, students are required to complete an Exit Interview.

First-year, full-time students (those who have completed less than 31 credit hours) may receive up to $3,500 per year in subsidized loans. They may receive up to $4,500 per year after they complete 31 credit hours. In addition, full-time dependent students may receive an additional $2,000 and full-time independent students for an additional $6,000 in unsubsidized loan funds per school year. All unsubsidized loan amounts are restricted to no more than the student’s cost of attendance, less the amount of other financial aid the student is expected to receive.

Federal Parent Loan for Undergraduate Students (PLUS)

Parent Loan for Undergraduate Students (PLUS) borrowers are parent(s) of dependent students. Parent(s) must begin making payments no later than 60 days after the loan has been disbursed. Parent(s) may borrow up to the cost of attendance (COA) less the amount of financial aid the student is expected to receive.

Students do not have to have financial need in order for their parent to qualify for this loan. Students are required to complete the Free Application for Federal Student Aid (FAFSA) and the parent whose information was provided on the FAFSA must complete a PLUS Loan Request Form and Consent to Obtain Credit (which can be obtained from the Office of Financial Aid).

Alternative Loans

HFC does not encourage students to borrow more than what is absolutely necessary during an academic year. On a regular basis, students should be monitoring their total indebtedness and how that translates to a monthly payment once repayment begins.

If you are thinking about attending college, think Federal Aid First. Federal loans usually offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources.

However, there are times when the Federal Direct Loan Program requirements and annual/aggregate limits do not allow students to borrow enough funding to meet the COA. In these instances, students may want to consider alternative loans as an option to meet their needs.

Alternative loans are offered by banks or other lending institutions to assist students and/or parents in bridging the gap between college costs and traditional funding sources. The terms and conditions of these loans can vary depending on specific lender guidelines. We strongly recommend that students research alternative loan programs carefully before beginning the application process to ensure that they understand the eligibility requirements, interest rates, loan fees, grace/repayment periods and terms, as well as any borrower benefits. Students may research alternative loan opportunities online by performing a general search via their web browser. HFC will only certify an alternative loan for students who are enrolled in a degree or certificate program and are making Satisfactory Academic Progress.

Entrance Counseling

First-year undergraduates and first-time FDL borrowers must complete the Direct Loan Entrance Counseling on the U.S. Department of Education's studentaid.gov website under the "Complete Counseling" link. This interactive counseling session and quiz helps students develop budgets for managing educational expenses and also understand their loan responsibilities.

**Students must complete Entrance Counseling before loan funds can be disbursed to their account.

New borrowers or prospective students are encouraged to take the demo Entrance Counseling to gain a better understanding of federal student loans.

NOTE: Entrance Counseling is NOT the same as the Financial Awareness Counseling Tool on the same site. Taking a demo counseling session will NOT fulfill the requirement.

More detailed information regarding the Federal Direct Loan Program can be found in the Entrance Counseling Guide published by the U.S. Department of Education.

Exit Counseling

Direct Loan Exit Counseling is required for FDL borrowers who are graduating, transferring to another college, leaving school or dropping below half-time enrollment. This counseling session helps borrowers understand their rights and responsibilities in repayment and helps them choose a repayment plan. You must use your Department of Education PIN to access this counseling session. To complete the Exit Counseling session, go to the studentaid.gov website. Click the "Complete Counseling" link and follow the link to "Exit Counseling" to begin.

Current borrowers are encouraged to take the demo Exit Counseling to gain a better understanding regarding federal student loans and the repayment of those loans.

NOTE: Exit Counseling is NOT the same as the Financial Awareness Counseling Tool on the same site. Taking a demo counseling session will NOT fulfill your requirement.

More detailed information regarding the Federal Direct Loan Program can be found in the Exit Counseling Guide published by the U.S. Department of Education.

Loan Limits

HFC Financial Aid determines both the loan type(s)as well as the actual amount of loan for which you are eligible to receive each academic year. This is determined based on year you are in school as well as whether you are considered dependent or independent for FAFSA purposes.

Regardless of your eligibility, there are also federal limits on the amount of subsidized and unsubsidized loans that you be eligible to receive each academic year (annual loan limits) and the total amount you may borrow for undergraduate study (aggregate loan limits).

Note that once a student has reached their aggregate loan limit, they are no longer eligible for loan funding, regardless of whether or not they have completed their degree.

The following chart shows the annual and aggregate limits for subsidized loans for first-and second-year undergraduate students.

**Dependent students whose parents are unable to obtain a PLUS loan may be eligible for additional loan funds, up to the independent annual loan limit.
***HFC First-Year Undergraduate: Students with less than 31 completed credit hours
****HFC Second-Year Undergraduate: Students with 31 or more completed credit hours