Federal Student Loans, which consist of the Direct Subsidized Loan and the Direct Unsubsidized Loan are forms of borrowed, financial aid assistance which require the submission of the Free Application for Federal Student Aid (FAFSA) in order to qualify for loan funding each academic year.
The Financial Aid Office at NTC advocates for responsible borrowing, that is, borrowing only what you need for your education. It is important to note that all federal student loan funding requires repayment, and the repayment process will begin once you graduate, leave school, or drop below half-time (6 credits) in a given semester. Credit checks are not required for federal student loan eligibility (with the exception of the Parent PLUS Loan, which is outlined below).
More information about repayment of student loans can be found at the Student Aid website: https://studentaid.gov/manage-loans/repayment/repaying-101.
Loans are legal obligations, so before you take out a student loan, think about the amount that you will be required to repay in the years following graduation.
Federal Loan Programs
The Direct Subsidized Loan
The Direct Subsidized Loan is available to students with financial need, and the interest is subsidized, meaning the U.S. Department of Education pays the interest on this loan, while you’re enrolled in school at least half-time (6 credits each term, excluding summer), during your 6 month grace period, and during a period of deferment. Financial need is the difference between your cost of attendance (COA), which is found within your Workday account, and your student aid index (SAI), which can be found within your Studentaid.gov portal. Your COA will vary from school to school, which is why financial aid offers are not the same when comparing different institutions, however your SAI will not change, based on the school you attend.
More Direct Subsidized Loan Information
The Direct Unsubsidized Loan
The Direct Unsubsidized Loan is available to undergraduate students, regardless of financial need. You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. If you allow the interest to accrue (accumulate) while you are in school or during other periods of nonpayment, it will be capitalized. This means that interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.
More Direct Unsubsidized Loan Information
Parent PLUS Loan
Parent PLUS Loans are available to parent borrowers, to help finance their child’s educational expenses. In order to qualify for a parent PLUS loan, you must:
- Be the biological or adoptive parent of a dependent undergraduate student enrolled at least half-time at an eligible school;
- Not have an adverse credit history (unless you meet certain additional requirements and
- Meet the general eligibility requirements for federal student aid.
More Parent PLUS Loan Information
Note: Grandparents and Legal Guardians (unless they have legally adopted the dependent student) are not eligible to borrow parent PLUS loans, even if they have had primary responsibility for raising the student.
What is the maximum PLUS loan amount that can be borrowed?
The maximum PLUS loan amount is equal to the student’s cost of education (budget/cost of attendance) minus other financial aid and resources such as scholarships.
Example: The budget (cost of attendance) for the student is $14,000. Other financial aid is $5,500. The difference of $8,500 is the amount that can be borrowed in a PLUS loan.
Can both a parent and step-parent of a dependent student apply for a PLUS loan for that student?
Any two eligible parents may borrow separately to provide for the educational expenses of the student, provided that the combined borrowing of the parents does not exceed the cost of attendance minus other financial aid and resources. Eligible parents include the student’s biological or adoptive parents or step-parent if their income was used when completing the FAFSA.
Can I still receive a Direct PLUS Loan if I have an adverse credit history?
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history or documenting to the U.S. Department of Education’s satisfaction extenuating circumstances relating to your adverse credit history. If you are a parent borrower, the endorser cannot be the child on whose behalf you are borrowing.
Parent PLUS Application Process
It is important to note that all federal student loan funding requires repayment, and the repayment process will begin once you graduate, leave school, or drop below half-time (6 credits) in a given semester. Credit checks are not required for federal student loan eligibility (with the exception of the Parent PLUS Loan, which is outlined below).
Borrowing Limits for Direct Loans
Fees and Interest Rates for Federal Loan Programs
If you receive a federal student loan, you will be required to repay that loan with interest. In addition to interest, a loan fee is charged by your loan servicers, and it is deducted from the loan(s) prior to the first disbursement. Make sure you understand how interest in calculated and the fees associated with your loan. Both of these factors will impact the amount you will be required to repay.
Loans first disbursed on or after July 1, 2023 and before July 1, 2024
| Federal Loan Program | Loan Fee | Interest Rate |
|---|---|---|
| Direct Subsidized Loan | 1.057% | 5.50% |
| Direct Unsubsidized Loan | 1.057% | 5.50% |
| Parent PLUS Loan | 4.228% | 8.08% |
Loans disbursed on or after July 1, 2024 and before July 1, 2025
| Federal Loan Program | Loan Fee | Interest Rate |
|---|---|---|
| Direct Subsidized Loan | 1.057% | 6.53% |
| Direct Unsubsidized Loan | 1.057% | 6.53% |
| Parent PLUS Loan | 4.228% | 9.08% |
More information about the interest rates and fees for Federal Student Loans can be found online at the Federal Student Aid website.
Annual Loan Limits
| Loans | Year 1 (0 – 23 earned credits) | Year 2 |
|---|---|---|
| Base amount (type of loan, subsidized or unsubsidized depends upon eligibility) | $3,500 | $4,500 |
| Additional Unsubsidized Loan | $2,000 ($5,500 total) for dependent students* $6,000 ($9,500 total) for independent students* | $2,000 ($6,500 total) for dependent students* $6,000 ($10,500 total) for independent students* |
* If you’re a parent and you’re unable to get a PLUS loan, your child may be able to get additional unsubsidized loan funds. Please contact our office for more information.
Aggregate Loan Limits
| Type | Description |
|---|---|
| Dependent | $31,000 - No more than $23,000 of this amount may be in subsidized loans |
| Independent | $57,500 for undergraduates - No more than $23,000 of this amount may be in subsidized loans |
Prior to Disbursement of Federal Loans
- You must meet the eligibility requirements listed above
- You must not exceed federal aggregate loan limits (listed above)
- You must review and accept (or decline, or reduce) your financial aid award in your Workday account. Click HERE if you need help reviewing your financial aid award
- Complete Entrance Counseling
- Complete a Master Promissory Note (MPN)
- Set up your Payment Elections in Workday
- View the Important Dates and Announcements page for additional information on financial aid disbursement.
All student loans will be split between two equal disbursements each semester.
This applies to single-semester loans (summer only, fall only, and spring only) as well as loans that are automatically split between fall/spring. The first disbursement can be made according to the disbursement schedule while the second disbursement will be made at the midpoint of the semester. Some students may not receive a refund after the first disbursement if all charges have not been paid, whereas other students may receive a partial refund followed by another refund later in the semester. Please keep this in mind when budgeting. If for some unexpected reason a student drops below half-time enrollment (fewer than 6 enrolled credits) at the time that the second disbursement would occur, the second half of any student loans will be canceled.
In order to remain eligible for student loan funding each year, a student must:
- Submit a FAFSA
- Enroll in a minimum of 6 credits each term (summer, fall and spring)
- And be accepted into a financial aid eligible program
Alternative Student Loans (Private Loans)
Alternative student loans (or private student loans) are loans a student takes out directly from lending institutions to assist with college related costs. These loans can be used for education related expenses such as tuition, books, transportation, and room & board. Students should exhaust all federal aid and direct loan opportunities before applying for an alternative loan. Most alternative loans offer variable interest rates; whereas the Direct Loan opportunities, such as the Stafford and PLUS Loans, offer fixed interest rates. Alternative loans are not federally guaranteed and require a good credit rating and/or credit worthy co-signer.
How to Apply for an Alternative Student Loan
Northcentral Technical College does not endorse any lender or lending institution. The NTC Financial Aid Office recommends using FASTChoice, a private loan selection tool that includes a list of all lenders who made a loan at the school within the last 3 years.
We recommend you follow the steps below:
- Go to Fast Choice to get started.
- Enter in your personal information (Full Name and Student ID, if known).
- Complete Borrowing Essentials to learn about borrowing money.
- Read through the Loan Product Disclosures and select Next.
- Compare the different options of private loans that are provided.
- Once you find a loan you are interested in, select Apply.
- Provide the lender with all information required and submit your application.
- The lender will review your application to determine if you qualify. If your loan is approved, the lender will notify us for certification.
- The Financial Aid Office will review your account and if you meet the eligibility requirements, your loan will be certified.
- If the funds cause a credit on the student's account, the excess will be refunded to the student through their Workday account.