SC

Federal Loans

FedAidLogoStudents planning to borrow student loans must first complete the Free Application for Federal Student Aid (FAFSA).  To receive federal loans, students must be enrolled at least half-time and are subject to annual and aggregate maximums.  The loans carry a federal guarantee which means that an overwhelming majority of students who apply for these loans receive them - even when they are unable to receive other, conventional loans.  Note that student borrowers should carefully read how to keep your aid in the Southwestern College Financial Aid Handbook. 

There are three loan programs currently authorized by Title IV legislation.

FEDERAL DIRECT LOANS
Federal Direct Stafford Loan (Subsidized) - a guaranteed student loan available to undergraduate students who demonstrate financial need.  Loan interest is subsidized by the taxpayer for borrowers enrolled at least half-time and for a six (6) month grace period after the borrower ceases at least half-time enrollment.  The current interest rate on new loans is fixed at 4.45%.  Loan fees apply.  Terms and Conditions.

Federal Direct Stafford Loan (Unsubsidized) - a guaranteed student loan available to graduate and undergraduate students regardless of financial need.  Loan interest is paid by the borrower throughout the life of the loan.  Optional interest only payments may be made by the borrower while enrolled in school.  The current interest rate on new loans is fixed at 4.45% for undergraduates and 6% for graduates.  Loan fees apply.  Terms and Conditions.

How to Apply - The first step in applying for a loan at Southwestern College is to officially accept the offer of the loan by replying to the annual award letter.  In the response, the student should write that they accept the loans as offered or indicate which loans they are declining or adjusting.  (Examples: "I would like to accept all loans as offered." or "I would like to accept the subsidized loan and decline the unsubsidized loan.").  The response must come from the student's email address - preferably @sckans.edu.

If this is the first time the student has accepted a Federal Direct Loan, the student must also complete the following steps:

  1. Complete an online Master Promissory Note (MPN):  When logging in, have the student's FSA User ID, password and the names and information of at least 3 references who live at different addresses ready.  Make sure that the MPN option for Federal Direct Loan MPN for students is selected.  The MPN is valid for 10 years.  This step is waived for students who have an active MPN on file with the Department of Education.
  2. Complete Entrance Counseling.  This step is required for every first-time borrower and waived for students who have received a Federal Direct Loan within the past year.  When logging in, have the student's FSA User ID ready.  Make sure that the PLUS Entrance Counseling marked "required" is selected.

NSLDS.ed.gov - Once a student has properly applied for a loan, the loan will be submitted to the National Student Loan Data System (NSLDS), and will be accessible to guaranty agencies, lenders, and schools who are determined to be authorized users of the data system.  Borrowers may also use the NSLDS.ed.gov system to track their loans through repayment.

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FEDERAL PLUS LOANS
Federal PLUS loan for Undergraduates - available to parents wishing to finance the difference between a student's financial aid and the remainder of the Southwestern College balance.  The loan may also be used to finance travel abroad experiences and qualified living expenses.  PLUS loans do not carry a federal guarantee and are therefore subject to an adverse credit evaluation and approval.  This evaluation is performed after the MPN is signed and before funds are released to the student's account.  The current interest rate on new loans is fixed at 7%.  Loan fees apply.  Terms and Conditions.

Federal PLUS loan for Graduates - available to graduate students wishing to finance the difference between their financial aid and the remainder of the Southwestern College balance.  This loan may also be used for travel abroad experiences and qualified living expenses.  Application for this loan is subject to an adverse credit history check.  The current interest rate on new loans is fixed at 7%. Loan fees apply.  Terms and Conditions.

How to Apply - application processes for these loans vary depending on if you are a parent of an undergraduate or graduate student. 

Parents: The parent serving as the borrower of the loan must officially accept the PLUS loan offered on the student's annual award letter by replying to the official email.  The response must come from a parent email address.  In your response, you must write that you accept the loan as offered or indicate that you are declining or adjusting the amount of the loan.  Follow up the email by submitting Southwestern's parent loan applicationIMPORTANT: No action will be taken to place a PLUS loan on a student's account until an email or other written notification is received from the parent borrower - even if the student has indicated that they are accepting all the loans offered on the award letter.

  • If this is the first time the borrower has accepted a Federal PLUS loan offer, the individual will need to complete the online Master Promissory Note (MPN).  When you log in, have your parent FSA User ID, password, and the names and information for 3 references who live at different addresses.  The MPN is valid for 10 years.  This step is waived for parents who already have an established MPN for the enrolled student on file with the Department of Education.

In some circumstances, a borrower is not approved for a PLUS loan due to adverse credit.  When this happens, there are two options available to the family:

  1. The denied parent may apply with the aid of an endorser (co-signer), appeal and submitting additional entrance counseling specifically designated for the PLUS loan. Make sure the PLUS counseling option marked "required" is selected.
  2. The Office of Financial Aid can increase the student's eligibility with an additional Federal Direct Unsubsidized Loan (subject to the annual and aggregate maximums for independent students.)

Graduates:  Graduates who wish to borrow a PLUS must email or visit the Office of Financial aid to discuss their eligibility for this loan.  Loan amounts are subject to federal limits that vary according to the student's financial aid package and the current cost of attendance.

  • If this is the first time the borrower has accepted a Federal PLUS loan, the individual will need to complete a Master Promissory Note (MPN) and Entrance Counseling.  Make sure you select the options for graduate students and required PLUS counseling.  When you log in, have your FSA User ID, password and names and information for 3 references who live at different addresses.  The MPN is valid for 10 years.  These requirements are waived for students who have borrowed a Federal PLUS loan within the last year.

NSLDS.ed.gov - Once a student or parent has properly applied for a loan, the loan will be submitted to the National Student Loan Data System (NSLDS), and will be accessible to guaranty agencies, lenders, and schools who are determined to be authorized users of the data system.  Borrowers may also use the NSLDS.ed.gov system to track their loans through repayment.

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FEDERAL PERKINS LOAN
Federal Perkins Loan - awarded on a first-come, first-served basis to students who demonstrate extremely high financial need.  Southwestern College students are awarded a maximum of $2,200 per year with exceptions made on a case-by-case basis and by appeal.  Interest on the loan is subisidzed by the taxpayer while the borrower is in school at least half-time and for 9 months after the borrower ceases half-time enrollment.  The interest rate on these loans is fixed at 5%.  The Perkins Loan program is set to expire on October 1, 2017.  Students with disbursed Perkins loans prior to October 1, 2017 will be able to continue receiving disbursements in the spring semester.  The Perkins does not have loan fees.  Terms and Conditions.

How to Apply - If you are offered a Federal Perkins Loan, you must first officially accept the loan by replying to your annual award letter.  In your response, you must write that you accept the loan as offered or indicate that you are declining or adjusting the amount of the loan.  The response must come from the student's email address - preferably @sckans.edu.  Please also note that regardless of whether or not you've been offered the loan, receipt of the loan each semester is subject to the grandfathering provisions mentioned above.

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LOAN REPAYMENT

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