Student Loans

FEDERAL DIRECT LOAN INFORMATION

loans

Moorpark College participates in the William D. Ford Federal Direct Loan Program. The U.S. Department of Education is the lender for the William D. Ford Federal Direct Loan Program.

The Federal Direct Loan program offers loans at a low interest rate with repayment terms designed with students in mind. In most cases, you will not have to start repaying your loans until six months after you graduate and/or enroll less than half time. Direct Loans include Subsidized and Unsubsidized Student Loans and Parent Loans for Undergraduate Students (PLUS).

Loans must be repaid with interest so it is important to understand your rights and responsibilities as a borrower. All borrowers are required to complete Loan Entrance Counseling before we may originate a loan. Online at www.studentloans.gov

There are two types of Direct Loans :

Subsidized Loans

Subsidized Loans are available to students who meet certain financial need criteria. If you qualify, the federal government will pay the interest on the loan while you are in school and during periods when you are authorized to defer your loan payments.

Unsubsidized Loans

Unsubsidized Loans are available to students regardless of financial need. You are responsible for the interest that accumulates on an unsubsidized loan while you attend school, during the grace period and during any periods when you are authorized to defer your loan payments. You have the option to pay the interest during school or pay it later. If you delay payment, the interest will be added to your principal balance. This addition of interest to your principal balance is known as capitalization.

Maximum Loan Limits:  

Federal law specifies annual loan limits on Federal Direct Loans based on your year in college and your dependency status. At Moorpark College, you must have completed 30 college level units toward your program of study to be considered a second year student.

Dependent Student

Grade Level Base Annual Amount Additional Unsubsidized Total Annual
1st Year $3,500 $2,000 $5,500
2nd Year $4,500 $2,000 $6,500
Undergraduate Aggregate Loan Limit $31,000 (no more than $23,000 may be Subsidized)
Independent Student
Grade Level Base Annual Amount Additional Unsubsidized Total Annual
1st Year $3,500 $6,000 $9,500
2nd Year $4,500 $6,000 $10,500
Undergraduate Aggregate Loan Limit $57,500 (no more than $23,000 may be Subsidized)

Annual Interest Rates:

 

Annual Interest Rates are set each July 1st.

  • For  all  Direct Subsidized Loans and Direct Unsubsidized Loans for which the earliest disbursement date is on or after July 1.
  • For  all  Direct Subsidized Loans and Direct Unsubsidized Loans for which the earliest disbursement date is on or after July 1.

 **Summer loan request deadline is June 1st**  

Students who are interested in borrowing a student loan for fall and spring must submit a student loan request packet to the Moorpark College Financial Aid Office.    

LOAN APPLICATIONS WILL NOT BE PROCESSED UNTIL YOU HAVE ATTENDED AN ONLINE LOAN ENTRANCE COUNSELING WORKSHOP, FINANCIAL AWARENESS COUNSELING ONLINE, AND COMPLETED YOUR ONLINE MPN AT WWW.STUDENTLOANS.GOV. ONCE YOUR LOAN APPLICATION IS PROCESSED IT WILL APPEAR ON YOUR FINANCIAL AID AWARDS PACKAGE ON YOUR MYVCCCD.portal AND YOU WILL RECEIVE AN EMAIL AT YOUR MY.VCCCD.EDU EMAIL TO CHECK YOUR AWARDS ON YOUR PORTAL.

Maximum annual award for PLUS is the student's Cost of Attendance minus any resources the student has been awarded.  Eligibility is contingent on approved credit which is only valid for 90 days. Do not apply prior to July 1st.  The interest rate for Direct PLUS Loans is set on July 1st. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement.  There is an origination fee.

In addition to interest, you pay a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that you receive. This fee helps reduce the cost of making these low-interest loans. We deduct the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.

Dependent students whose parents have applied for but were unable to get a PLUS Loan may be eligible to receive additional Direct Unsubsidized Loan funds. Students must provide a copy of the PLUS credit denial to the Financial Aid Office.

Loan Exit Counseling

Federal regulations require that all student borrowers who graduate, withdraw, or drop below half time enrollment complete Loan Exit Counseling. Always notify your servicer of your current address, phone number and contact information in a timely manner.  The National Student Loan Data System(NSLDS) website has the most current contact information for the Holder/Servicer of your loan(s).

Direct Student Loan Changes

Direct Subsidized Loans are not eligible for an interest subsidy during the six-month grace period.

  • Subsidized loans are loans for which the borrower is not responsible for the interest while the student is enrolled in college on at least a half-time basis, when the loan is in the six-month grace period after the student is no longer enrolled at least half-time, or if the loan is in a deferment status. This provision eliminates the interest subsidy provided during the six-month grace period for subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If you receive a subsidized loan during this time frame, you are responsible for the interest that accrues while your loan is in the grace period. You do not have to make payments during the grace period (unless you choose to), but the interest will be capitalized (added to the principal amount of your loan) when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.

 

Federal Subsidized Student Loan Borrowing Limitations

As of July 1, 2013, a first-time Federal Subsidized Student Loan borrower is no longer eligible for the Subsidized Student Loan program if he or she exceeds 150% of the published length necessary to graduate.

In addition, a borrower reaching the 150% limit becomes ineligible for the interest subsidy benefits on all Federal Subsidized Loans disbursed to the borrower on or after July 1, 2013.

 

Congress wants to encourage students to obtain undergraduate degrees within in a reasonable time frame. Students who change majors multiple times or, drop classes excessively or retake classes excessively are most likely to be affected by Public Law 121-141.

Congress no longer wants to provide interest rate deferments for students taking an exceptional amount of time to obtain an undergraduate degree. The interest rate expense is now passed to the student in such cases.

Based upon available information from the U.S. Department of Education, the interpretation of the 150% rule is actual credit hours completed versus credit hours attempted. If different information becomes available, this web site will be updated.

As of July 1st, 2013, any first-time borrower, (which is defined as someone who has no outstanding balance on a FFELP or Direct loan when receiving a Direct loan on or after July 1, 2013), will only be able to obtain federal Direct Subsidized loans for a maximum of 150% of the published program length in which they are enrolled. Additionally, the subsidized loans that had been borrowed up to the 150% point will lose further government subsidy and interest will begin to become the student's responsibility if they do not graduate by the 150% point (and continue to be enrolled in the same or a shorter undergraduate program). From that point forward, these subsidized loans will lose interest subsidy. 

Here are a few facts that you need to know:

  1. Students may receive Direct Subsidized loans for no more than 150% of the length of the current academic program. For example, a student enrolled in a two-year 60 unit program will have (2 years x 150%)  three years or (60 units x 150%)  90 units of subsidized loan eligibility. A student enrolled in a four-year program will have six years' worth of subsidized loan eligibility.
  2. Once a student reaches the 150% mark in a particular program, their future subsidized loan eligibility in that program will end. They may, however, be eligible for unsubsidized loans.
  3. A student who reaches the 150% limitation will have their interest subsidy end for all outstanding subsidized loans if the student does not graduate and continues to be enrolled in the same or a shorter undergraduate program. Repayment does not begin, but like unsubsidized loans, the student (rather than the government) would become responsible for interest that accrues from this point forward.
  4. Program Completion = permanent protection of interest subsidy.
  5. Unlike other measures in determining continued aid eligibility, this provision is not affected by the total dollar amount borrowed. Any and all periods of subsidized loan borrowing will count against the 150% time limit.
  6. This policy is in addition to, and not in place of, the lifetime aggregate loan limits that are currently in place.

For more information view the FACT Sheet from the U.S. Department of Education.

References                                                                                                                                      

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