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Direct Stafford Loans

Direct Stafford Loans

Direct Stafford Loans

Direct Stafford Loans, from the William D. Ford Federal Direct Loan (Direct Loan) Program, are low-interest loans for eligible students to help cover the cost of higher education. Eligible students borrow directly from the U.S. Department of Education (the Department) for their attendance at ACC.

All students applying for loans must complete a new loan application even if a loan application was completed in past academic years. If entrance counseling was completed at a former college, the student must complete the requirement again for ACC. In order for your loan to be processed, the ACC Financial Aid Office must have your completed Loan Amount Request Form (see instructions below).

Direct Stafford Loans include the following types of loans:

  • Direct Subsidized Loans – Direct Subsidized Loans are for students with financial need. ACC will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the amount you can borrow. You are not charged interest while you’re in school at least half-time.

Effective 7/1/2012, interest subsidy during the six-month grace period for new Stafford Loans made on or after July 1, 2012, and before July 1, 2014, will be eliminated. The repayment period still begins 6 months after the student is no longer enrolled at least half-time, but the interest that accrues during those six months will be payable by the student rather than be subsidized by the federal government.

If you are a first-time borrower on or after July 1, 2013 through June 30, 2021, there is a limit on the maximum period of time that you can receive Direct Subsidized Loans. If this time limit applies to you, you may not receive Direct Subsidized Loans for more than 150 percent of the published length of your enrolled program. Because your maximum eligibility period is based on the length of your current program of study, your maximum eligibility period can change if you change to a program that has a different length. If you change to a program less in length, it can result in losing your subsidy on your Direct Subsidized Loans. Any Direct Subsidized Loans borrowed on or after July 1, 2021 will no longer have time limitations. 

  • Direct Unsubsidized Loans – You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like subsidized loans, ACC will determine the amount you can borrow. Interest accrues (accumulates) on an unsubsidized loan from the time it is first paid out. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.

NOTE: Before July 1, 2010, Stafford, PLUS, and Consolidation Loans were also made by private lenders under the Federal Family Education Loan (FFEL) Program. As a result of the Health Care and Education Reconciliation Act of 2010, no further loans will be made under the FFEL Program as of July 1, 2010. All new Stafford, PLUS, and Consolidation Loans come directly from the Department of Education under the Direct Stafford Loan Program.

Understanding Student Loans
Sample Loan Repayment Chart

Direct Loan Application Process
STEP 1. BEFORE you apply for a loan, you must:

1)  Complete the 2023-2024 FAFSA online at https://studentaid.gov/
2)  Complete all required financial aid verification items (if any)
3)  Meet the Financial Aid Satisfactory Academic Progress (SAP) standards
4)  Register for classes in at least 6 credit hours (half-time)
5)  First-time borrowers at ACC must also go to  https://studentaid.gov  log in with your FSA ID, click accept, under "Loans and Grants" select:
  a) Master Promissory Note, select MPN for I'm an Undergraduate Student start button, complete the information               and submit, and
  b) Loan Entrance Counseling, select I'm an Undergraduate Student start button, complete the information and submit.

STEP 2. SUBMITTING the loan request:

1)      Complete and sign the 2023-2024 Federal Direct Loan Amount Request Form
2) Submit it to the ACC Financial Aid Office.

STEP 3. AFTER you submit the loan request:

  • Financial Aid Staff will review your Direct Loan Amount Request Form
  • The loan certification process may take approximately 2-3 weeks. Inaccurate or incomplete information on the Direct Loan Amount Request Form may delay loan processing.
  • Loan information will be submitted to the National Student Loan Data System (NSLDS) and will be accessible by authorized users of the system.
  • After the loan certification, students will receive an award notification in their ACC email account regarding the updated loan award.
  • Loan refunds are disbursed according to Federal guidelines and the student’s preference selected on the Direct Loan Amount Request Form.

Recommended Borrower Resources: 

  • Log on to the National Student Loan Data System to check your loan balance and servicer information on https://studentaid.gov/ Once you log in, click on the arrow next to your name and click “Aid Summary.”
  • Go to https://mappingyourfuture.org/paying/debtwizard/index.cfm to see how much salary you need to support your student loan debt.
  • If you are currently employed and you stay employed with the company making a certain wage, you can use the site to see how much you can afford to borrow in student loans based on your current salary.
  • You may also adjust the amount to minimum wage to see the maximum you should borrow based on minimum wage earnings.
The customer service number to call if there are any questions concerning new or existing loans is 1.800.433.3243.
If you have any questions as you complete the counseling requirements, you may contact the Financial Aid Office at 989.358.7286.

Direct PLUS Loan for Parents (Parent PLUS Loan)

Parents of dependent students may apply for a Direct PLUS Loan to help pay their child's education expenses as long as certain eligibility requirements are met.

To be eligible for a Direct PLUS Loan for Parents:

  • The parent borrower must be the student's biological or adoptive parent. In some cases, the student's stepparent may be eligible.
  • The student must be a dependent student who is enrolled at least half-time. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court.
  • The parent borrower must pass a credit check. If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances.
  • The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs. For additional information, go to federal student aid.

How to apply for Federal Direct Parent PLUS Loans
  • Go to https://studentaid.gov
  • You must sign in using your FSA ID you used to sign your dependent’s FAFSA.
  • Select "Complete Master Promissory Note," then select "Parent PLUS."
  • A new MPN must be completed each academic year.
  • Once the above is completed, you may complete and submit the “PLUS Loan Amount Request Form” to the Financial Aid Office.

Alternative Loans

All students are encouraged to complete a Free Application for Federal Student Aid (FAFSA) to determine if they may be eligible for federal or state grants or loans, which are much more favorable than private loans. To find different private loan servicers, do an internet search on “alternative student loans.”

Repaying Federal Direct Loans

  • Please go to Federal Student Aid to see about repayment plans.
  • The Customer Service number concerning new or existing loans is 1-800-433-3243.