Federal Direct Loan

The Direct Loan program provides low interest loans that are funded by the U.S. Department of Education.

The Subsidized Loan is for students with financial need as determined by federal regulations. No interest is charged while you are in school at least half-time, during the 6-month grace period after you stop attending college, and during eligible deferment periods. The interest rate for a subsidized loan for the 2009-2010 academic year is 5.6%.

The Unsubsidized Loan is a non-need based loan program. Unsubsidized means the Federal government does not pay the interest for the student. You are responsible for paying all interest that accrues on an unsubsidized loan while you are attending school, during the 6-month grace period, and once repayment has begun on the loan. For the 2009-2010 academic year, there is a fixed interest rate on unsubsidized loans of 6.8%.

Annual loan limits are the maximum amounts that a student is eligible to borrow in the Direct Loan Program during an academic year. The amounts are based on your grade level, financial need, cost of attendance, and whether you are considered dependent or independent.

Direct Loan Process

To apply for a Direct Loan, follow these steps:

1. Submit a current Free Application for Federal Student Aid (FAFSA) and complete your financial aid file at SMC.
2. Meet SMC’s Satisfactory Academic Progress Policy.
3. Complete Entrance Counseling online.
4. Complete a Direct Loan Master Promissory Note. ALL Direct Loan borrowers must complete a Direct Loan Master Promissory Note (MPN) in order to receive loan funds for the current academic year.
5. Complete and submit the current Southwestern Michigan College Direct Loan Request Form.