Federal Direct Loan

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In order to be eligible, you must first submit a current Free Application for Federal Student Aid (FAFSA), complete your financial aid file at SMC and meet SMC’s Satisfactory Academic Progress Policy.

First time borrowers at Southwestern Michigan College must complete all four steps listed below. If you have previously had a Federal Direct Loan at SMC, you only need to complete steps 1, 3 and 4.

  1. Complete Entrance Counseling online (All Borrowers).
  2. 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. (New Borrowers)
  3. Create an account with Inceptia and complete the "Paying for College" course. (All Direct Loan borrowers, both new and returning) **
  4. Loan Request/Budget Worksheet (All Borrowers – Complete this worksheet, then call the financial aid office to schedule an in person loan counseling appointment.) Bring the completed Budget Worksheet with you to the appointment.

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.

Federal Direct Subsidized Loan

The Subsidized Loan is for students with financial need as determined by government regulations. These loans help students finance their educational expenses up to $3,500 per year for freshmen and $4,500 per year for sophomores. A maximum of $23,000 in subsidized loans may be borrowed as an undergraduate student. For the 2013-2014 year, there is a fixed interest rate on subsidized loans of 3.86 percent. No interest is charged while the student is in school at least half-time, and during eligible deferment periods.

Students must file the Free Application for Federal Student Aid (FAFSA) and a current year Loan Request/Budget Worksheet Form to be considered for this loan. Only students with demonstrated need qualify for a subsidized loan. Students receiving this loan are required to complete exit loan counseling prior to program completion at SMC..

Federal Direct Unsubsidized Loan

All students, regardless of income, will be able to obtain an Unsubsidized Loan, provided they are not currently in default on a federal loan nor have reached the aggregate limits set by the government for undergraduate loans. Unsubsidized means the federal government does not pay the interest for the student. The student is responsible for paying all interest that accrues on an unsubsidized loan while attending school, during the 6-month grace period, and once repayment has begun on the loan. Currently there is a fixed interest rate on unsubsidized loans of 3.86 percent.

Students must file the Free Application for Federal Student Aid (FAFSA) and complete a current year Direct Loan Request Form/Budget Worksheet Form to be considered for this loan. Students receiving this loan are required to complete exit loan counseling prior to program completion at SMC.

**Borrowers can receive both subsidized and unsubsidized loans for the same loan period. The combined total of both loans cannot exceed Federal Stafford Loan Program annual limits.

Dependent Student Subsidized Max Unsubsidized Max Total Max
Freshman (less than 26 credits) $3,500 $2,000 $5,500
Sophomore (26 credits or more) $4,500 $2,000 $6,500
Independent Student Subsidized Max Unsubsidized Max Total Max
Freshman (less than 26 credits) $3,500 $6,000 $9,500
Sophomore (26 credits or more) $4,500 $6,000 $10,500