Loans

Loan funds are borrowed funds that must be repaid. By accepting loans funds, the student is agreeing to the terms of borrowing and making a commitment to repay the loan 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.

Federal Direct Loan recipients must be enrolled and attending at least 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 Loan Entrance Counseling as well as a Master Promissory Note.

The average annual loan for a student who borrows at HFCC is $5,353. If the student attends two years, on average the student borrower will have borrowed approximately $10,706.

Using $10,706, for example purposes only, assume the loans are borrowed at a 6.8% interest rate. When the student begins repaying, he/she can expect to pay approximately $123.20 per month for 10 years. The higher the loan debt, the higher the monthly payment will be.

(This example is strictly using the $10,706 borrowed amount and does not include any interest that was accrued while in school).

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

William D. Ford Subsidized Federal Direct Student Loan (SLOAN)

Federal Direct Loan recipients must be enrolled and attending at least 6 credit hours during a semester in order to be eligible to borrow loan funds.

The Subsidized Direct Loan is a need-based loan. The student may borrow up to $3,500 per year subsidized and unsubsidized loans combined. A student may borrow up to $4,500 per year after completing 31 credit hours, depending on the student’s level of financial need.

The interest rate for subsidized loans with first disbursement dates between 07/01/12 and 06/30/13 is a fixed 6.8% APR. You will not be charged any interest (nor will interest accrue) while you are enrolled at least half-time or during authorized periods of deferment. A deferment is a period of time when you are not required to make loan payments. The federal government “subsidizes” the interest during these periods. Repayment generally begins when the student is no longer enrolled in college on at least a half-time basis.

If you are requesting a loan for a prior semester, you must be currently enrolled, and in the prior semester you must have successfully completed a minimum of six credit hours with an earned grade of “A, B, C, D, or S”. 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 completion of studies, students must complete an Exit Interview.

William D. Ford Unsubsidized Federal Direct Student Loan (ULOAN)

Federal Direct Loan recipients must be enrolled and attending at least 6 credit hours during a semester in order to be eligible to borrow loan funds.

An unsubsidized loan is not awarded on the basis of financial need. However, to apply, students need to complete the Free Application for Federal Student Aid (FAFSA) and have the results released to HFCC.

The interest rate for unsubsidized loans with first disbursement dates between 07/01/12 and 06/30/13 is a fixed 6.8% APR. You will be charged interest on the loan from the time the loan is disbursed until it’s paid in full. If you allow the interest to accrue (accumulate) while you’re in school or during other periods of nonpayment, it will be capitalized – that is, the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.

First-year students (those who have completed less than 31 credit hours) may receive up to $3,500 per year through subsidized and unsubsidized loans combined. They may receive up to $4,500 per year after they complete 31 credit hours. In addition, dependent students may apply for an additional $2,000 and 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.

In virtually all other respects, the unsubsidized loan program functions like the subsidized program discussed in the prior section of this publication.

Federal Parent Loan for Undergraduate Students (PLUS)

PLUS (Parent Loan for Undergraduate Students) borrowers are parents of dependent students. This loan has a fixed interest rate, currently 7.9%, which is adjusted each year. Parents must begin making payments 60 days after the loan has been disbursed.

Parents may borrow up to the cost of attendance less the amount of financial aid which the student is expected to receive.

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

Alternative Loans

Henry Ford Community College 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 “cost of attendance.” 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.