Federal Subsidized Stafford Loan
The federal government has encouraged state governments to operate guaranteed long-term loan programs in conjunction with commercial lenders for students attending college at least half-time. For some loans, the federal government pays the interest to the lender until the borrower must begin to repay the loan.
While the federal government, the state, and the private corporations subsidize and guarantee the loans, the student obtains the loan from a participating lending institution - bank, savings and loan association, or credit union. GCC is not a direct lending institution.
The recipient of a student loan must recognize that such a loan is a debt incurred by the student, not the parents. The responsibility for understanding the conditions and regulations of the loan process, as well as the repayment schedules, rests with the student borrower. Students may be required to document the need for student loan funds over and beyond their direct educational expense to the institution.
The maximum loan amounts under the Federal Stafford Loan Program (including both subsidized and unsubsidized loans) are as follows: First year undergraduate student = $3,500 and second year undergraduate student = $4,500. First year students are defined as students who have earned up to 27 credit hours, inclusively. Students who have earned 28 credit hours or greater are considered second year students. No student at GCC is considered above second year standing.
Students, as a general rule, are limited to two loan maximums per undergraduate grade level for regular student loans. This means that no student is able to borrow more than $5,250 as a first year student and no more than $7,000 as a second year student. This includes past loan history. Exceptions to this maximum are limited to special circumstances that are determined on an individual basis consistent with institutional administrative guidelines.
The maximum loan amount depends on eligibility and the student's year in college. The interest rate is variable not to exceed 8.5 percent and begins with the first payment of the loan. Repayment begins six months after a student ceases to be enrolled at least half time.
All students receiving Stafford Loan funds are required to participate in both entrance and exit counseling. Entrance counseling takes place prior to the first disbursement of the loan and exit counseling is conducted prior to or at the time the student borrower ceases his/her enrollment. Student loan counseling discusses information regarding the responsibilities of indebtedness, repayment options, and consequences should the student fail to repay the loan. The deadline date for processing loans for first semester is December 1 and April 15 for second semester.
Federal Unsubsidized Stafford Loans
GCC does not participate in the Federal Supplemental Unsubsidized Stafford Loan Program. The provisions of the Federal Unsubsidized Stafford Loan Program are the same as those in the Federal Subsidized Stafford Loan Program previously described except the loans are non-need based and the federal government does not make interest payments for the borrower. The interest rate is the same as the Federal Subsidized Stafford Loan.
Federal Supplemental Loans For Parents
The Federal Supplemental Loans for Parents (PLUS) is intended to meet the needs of dependent undergraduate students. Parents or legal guardians with good credit histories are able to borrow up to the cost of education minus the financial aid the student is receiving. The interest rate is variable not to exceed 10 percent and begins to accrue as soon as the loan is obtained with repayment beginning within 60 days unless a deferment has been granted.