William D. Ford Federal Direct Student Loan Program (Direct)
The William D. Ford Federal Direct Subsidized and Unsubsidized Loan is a fixed interest rate loan made to a student who is enrolled at least half-time in an eligible program. The lender is the U.S. Department of Education. Repayment begins six months after a student leaves school or drops below half-time enrollment. Subsidized loans are need based and the government pays the interest while the student is enrolled. The subsidized loan is the best, first choice for students looking to borrow money for their education. Unsubsidized loans are not need based; therefore, students are not required to demonstrate financial need. Interest accrues on an unsubsidized loan from the time it’s first paid out.
Federal regulations limit the benefits of the direct loan subsidy to an aggregate period of no more than 150% of program length and applies only to first-time borrowers as of July 1, 2013. Once that limit has been exceeded, a student may borrow only unsubsidized loans, and will begin to incur interest charges on outstanding subsidized loans.
The Financial Aid Office will determine the student’s loan eligibility in accordance with the Department of Education regulations. A dependent student can borrow combined subsidized and unsubsidized loans not to exceed the annual loan limits. The loan limits are $3,500 per year for freshmen and $4,500 per year for sophomores. Independent students may borrow additional unsubsidized loans not to exceed $6,000. Dependent students may borrow additional unsubsidized loans not to exceed $2,000. The actual amount the student is eligible to borrow is determined by the financial aid office and may be less than the maximum amount. There are also aggregate limits on the total amount a student can borrow.
For loan purposes, a student’s classification will be determined by the number of hours completed towards his or her selected degree or certificate at the time of initial certification. A student’s classification will not be reevaluated until the beginning of the next academic year (fall through summer). A student who transfers in the middle of an academic year and has received his or her annual loan limit while at the transfer institution will not be eligible for a loan at Vernon College until the beginning of the next academic year. In accordance with federal regulations, Vernon College has the right to refuse to certify a loan or to certify for a reduced amount.
Interested students must accept or decrease their offered student loan amount via the online acceptance feature that is available through My VC. Once accepted, students must complete, entrance loan counseling, and the Master Promissory Note (MPN) process that is available at www.studentaid.gov. Exit loan counseling and testing is required before the student ceases at least half-time enrollment. Once the student completes entrance counseling, exit counseling and/or the MPN process, confirmation is sent to the Vernon College Financial Aid Office.
Borrowers have a right to cancel all or a portion of the loan or loan disbursement and have their proceeds returned to the federal government. VC will send a notice to the borrower no earlier than 30 days before and no later than 30 days after the school credits the student’s account. The notice will include the method and date by which the borrower must notify the school that he or she wishes to cancel all or a portion of the loan or loan disbursement.
Vernon College does not participate in the Perkins Loan, Hinson-Hazlewood Loan Program, HEAL Loan Program, HELP Loan Program and the CAL Loan Program.