Frequently Asked Questions-Federal Direct Student Loans
How many enrollment credits do I need to receive a Federal Direct Loan?
Who is eligible to borrow a Federal Direct Student Loan?
How is my eligibility to borrow a subsidized or unsubsidized student loan determined?
What is the difference between the subsidized and unsubsidized loan?
How much should I borrow?
What is the maximum I can borrow?
What is the interest rate on the student loan?
What is an origination fee?
When will the loan disburse?
What if the loan exceeds my tuition and fees?
What if I add or drop classes?
When does my loan go into repayment?
Is a Federal Direct Student Loan in the student's name or the parent's name? What if a parent wants to borrow a loan?
What happens to the loans I borrowed through a lender in the FFELP program?
How do Direct Loans and FFELP loans differ?
What if I borrowed a loan from another school in the fall?
What if I am transferring to another school in the spring?
Do I have to request a loan each year?
A. You must be registered and attending a minimum of six financial aid eligible credits by the census date each term to be eligible to receive a Federal loan.
A. To borrow a Federal Direct Student Loan, the student must:
- Have a FAFSA on file with HCC,
- Enroll and actively attend at least six financial aid eligible credits that lead toward an eligible degree or certificate program at HCC,
- Make satisfactory academic progress (SAP).
- A student in default on a previous federal student loan or owes a refund on a federal grant cannot receive federal financial aid, including federal student loans.
A. A student loan is awarded as a subsidized, unsubsidized, or combination of both based on the following: cost of attendance (enrollment and residency status), expected family contribution (FAFSA), other financial aid resources received, remaining subsidized usage eligibility (SULA), dependency status (FAFSA), grade level, and remaining SULA eligibility.
A. A subsidized loan is a federal student loan for students with financial need as determined by federal regulations. No interest is charged while the student is in school at least half-time. Interest will accrue during the grace period for all students who received their first subsidized loan on or after July 1, 2013.
An unsubsidized loan is not based on financial need. With an unsubsidized loan, the student is responsible for the loan's interest when the loan is disbursed until the loan is paid in full. Interest payments may be made while in school or can be deferred and capitalized when repayment begins. This means that the interest that accrues is added to the principal loan balance. Interest then begins accruing on the new principal loan balance.
A. A student loan requires a serious long-term commitment, and it must be repaid. Therefore, you should only borrow what you can reasonably afford to repay. Steps to determine the amount to borrow include looking at HCC costs and considering the total financial aid you expect to receive. More importantly, it would help if you considered your current debt and future borrowing needs. You can view your previous federal loan history at www.studentaid.gov. You will need your FSA ID to access your information.
Annual Loan Limits by Grade Level
Credits Earned or transferred to HCC
Additional Unsubsidized Amount
Grade Level 1
Grade Level 2
Aggregate Loan limits by Dependency status for undergraduate students
$31,000 but not more than $23,000 Subsidized
$57,500 but not more than $23,000 Subsidized
Please note, Subsidized/Unsubsidized eligibility is determined by Financial Aid Services.
HCC can deny any loan request based on such factors as unwillingness to repay, borrowing history, and academic progression.
A. Interest is the expense of borrowing money, which is calculated as a percentage of the amount borrowed. For the current interest rate, click here.
A. An origination fee is a fee paid by the borrower to the Department of Education to cover the loan's administrative fees. The loan amount credited to the student account will be the principal amount borrowed minus an origination fee. For the current origination fee, click here
A. In general, loan disbursements are made at least five weeks after the semester start date or two weeks after certification of the loan, whichever is later. The student will continue to receive a bill from the college until the loan is disbursed in full to the student's account, and all remaining balances are paid. These estimated disbursement dates may change if additional information is received from the Department of Education. If you are enrolled in a late starting or fast track class, the loan disbursement and any refund amount may be delayed.
A. Your loan disbursement will be credited to your student account. If your account results in a credit balance, a refund will be made to the option you selected with BankMobile. Questions related to BankMobile should be directed to the Finance Office at 443-518-1862.
A. The calculation to determine student loan eligibility is based on your enrollment status when you submitted your HCC loan application. Financial Aid Services must adjust your loan if you receive additional awards or make any adjustments to your enrollment (including dropping, adding, withdrawing, and non-attendance). You must be actively enrolled at least half-time (enrolled and attending six or more aid eligible credits) to receive loan funds. If it is determined that you are below six credits at the time of disbursement, your loan funds will be returned to the Department of Education for cancellation.
Additionally, if faculty later indicates that you were not actively enrolled for six credits at the time of your loan disbursement, you will be responsible for repaying any ineligible loan proceeds disbursed to your student account.
A. Repayment begins on the day immediately following a six-month grace period. The six-month grace period starts when you graduate, withdraw from school, or drop below the required six credits. To see more about repayment and repayment plans, please click here.
To ensure that payments are made on time, borrowers should consider making payments through the Department's Electronic Debit Account (EDA) repayment option. Under EDA, the borrower's bank automatically deducts the monthly Direct Loan payment from the borrower's checking or savings account. The payments will be forwarded to the Direct Loan Servicing Center and will always be on time. The borrower will also receive a 0.25 percent reduction in their interest rate for paying through the EDA option.
A. A Federal Direct Student Loan is in the student's name. If a parent wishes to borrow a loan on behalf of their dependent student, they must borrow a Federal Direct PLUS (Parent) Loan. Unlike Federal Direct Student Loans, PLUS loans are based on credit eligibility. If the parent's credit is denied and the parent borrower cannot secure an endorser, the student may be eligible for an additional unsubsidized student loan. For more information on PLUS loans, click here.
A. Once you go into repayment, you can either make individual payments to each lender or consolidate all of your loans with the Department of Education. You can check www.studentaid.gov and click "In Repayment” to see your current servicers for Direct and FFELP loans. For more information on loan consolidation, click here.
A. The main difference between the two types of loans is where the funds come from. The lender for Direct Loans is the U.S. Department of Education (the Department) rather than a bank or other financial institution. No loans are currently being made under the FFELP program.
A. If you borrowed a loan from another school in the fall or spring you will need to let your prior school know to cancel your remaining loan. You will need to add HCC's school code (008175) to your FAFSA, and go to myHCC Financial Aid Self-Service to "Request a New Loan."
A. If you transfer to another school during the academic year, the loan is not transferred to the new school. You will need to cancel your remaining loans at HCC and request a loan at your new school. You will also need to contact your loan servicer and request an "in-school deferment" so your loan(s) do not go into repayment. Loan cancellation forms are located on myHCC Financial Aid Self-Service under form links.
Q. Do I have to request a loan each year?
A. Each academic year you must request a loan by going to myHCC Financial Aid Service and completing the "Request a New Loan." This includes filling out the correct year FAFSA in addition to completing the required loan paperwork.