Loan Information

More information on the differences between:

• Subsidized
• Unsubsidized dependent loans
• Unsubsidized independent loans

How Your Federal Loan Works

Federal Direct Loans are not paid all at once and may not match the full amount you were offered.

• Loans are not paid all at once. If you borrow for the full academic year, your loan is typically split between terms. If you borrow for only one semester, it is generally split into two disbursements during that semester.
• First-time, first-year borrowers receive their first disbursement 30 days after the term begins
• You must be enrolled in at least 6 credits (half-time) to receive loan funds
• If you enroll in less than full-time coursework, your loan amount or future disbursements may be reduced
• Changes in enrollment (such as withdrawing from a course) may impact your remaining loan eligibility

* Grade level is determined by the number of credits completed in your major at the start of the loan period.
Grade level 1 = 0-29 credits
Grade level 2 = 30+ credits

Repayment

Subsidized Loans

Repayment begins six months after you graduate or drop below half-time (6 credits). Interest is not charged while you are enrolled at least half-time but begins accruing during repayment and forbearance periods.

Unsubsidized Loans (Dependent & Independent)

Repayment begins six months after you graduate or drop below half-time (6 credits). Interest begins accruing from the date of disbursement. If unpaid, interest will be capitalized (added to your loan balance) when your in-school and grace periods end.

If your Financial Aid Award Notification shows that you are eligible for federal loans, and you wish to accept them, you must complete the steps below to receive your loan funds.

Steps to Accept Your Loan:

1. Complete Direct Loan Entrance Counseling
2. Complete your Master Promissory Note (MPN)
3. Accept your loan in eServices:
   • Log in
   • Click Financial Aid
   • Click Loans

Federal Direct PLUS Loans are loans that a parent borrows to help their child pay for educational expenses. The borrower must have acceptable credit. To apply for a Federal Direct PLUS Loan, click on www.studentaid.gov. Parent borrower logs in using their FSA ID, not the student's information. Then complete the following two steps:

1. Complete an online PLUS Loan application with the Department of Education. Click on "Apply for a PLUS Loan" and select type "Direct PLUS Loan Request for Parent Borrowers".
2. Complete an online PLUS Master Promissory Note (MPN). Under the heading "Master Promissory Note", click on "Complete MPN" and select "PLUS MPN for Parents".

Dependent students whose parents are denied the Federal Direct PLUS Loan may be eligible to receive additional funds from the Federal Direct Unsubsidized Loan Program. A denial notice from the Department of Education will be provided to the school.

Private loans are an additional way to finance the costs of higher education when federal student loan options are exhausted. They are offered through private lenders whose loans are not associated with any federal student loan program so the eligibility criteria, loan limits, interest rates, and repayment terms will vary from one program and lender to the next. Typically, private loans are credit-based, which means that borrowers are required to pass a credit check and a credit-worthy cosigner may be required.

These loans generally should be considered as a borrowing option after you have considered federal loans. St. Cloud Technical and Community College does not endorse any one lender, nor does it or its employees receive any compensation or benefits from any lender. We do provide FASTChoice as a way for you to compare private loan options. Please note that should you decide to borrow under the private loan program, you may select any lender of your choosing and are not required to select one from this list of lenders.

Under the Truth-in Lending Act (TILA) rules, private education loans are subject to self-certification, three consumer disclosures at specific times in the application process, and a three day delay in disbursement. Due to the number of steps involved in the private loan application process, applicants should allow a minimum of 3-4 weeks for processing.

Situation:

• Dependent freshman (annual limit: $5,500)
• Fall: enrolled in 12 credits; withdraws from a 3-credit class; completes 9 credits
• Spring: enrolled in 12 credits

What happens:

• You complete 21 out of 24 credits for the year

How this affects your loan:

• Adjusted yearly loan: $4,813
• Fall loan stays at $2,750
• Spring loan is reduced to $2,063

Why this matters:

Withdrawing from a class lowers your remaining loan eligibility—even if you return to full-time in spring.

Situation:

• Dependent sophomore (annual limit: $6,500)
• Fall: enrolled in 6 credits
• Spring: enrolled in 12 credits

What happens:

• You complete 18 credits for the year

How this affects your loan:

• Adjusted yearly loan: $4,875
• Fall loan: $1,625
• Spring loan: $3,250

Why this matters:

Your total loan is based on all credits taken during the year—not just one semester.

Situation:

• Independent freshman (annual limit: $9,500)
• Fall: enrolled in 12 credits; withdraws from 7 credits; completes 5 credits
• Spring: enrolled in 12 credits

What happens:

• You complete 17 credits for the year

How this affects your loan:

• Adjusted yearly loan: $6,726
• Fall loan: $4,750
• Spring loan: $1,976

Important:

• Dropping below half-time may affect when you must start repaying your loans.

Why this matters:

This can impact both your future loan eligibility and your repayment timeline.

Situation:

• Independent sophomore (annual limit: $10,500)
• Fall: enrolled in 9 credits
• Spring: enrolled in 9 credits

What happens:

• You complete 18 credits for the year

How this affects your loan:

• Adjusted yearly loan: $7,875
• Fall loan: $3,938
• Spring loan: $3,937

Why this matters:

If you attend part-time all year, your total loan will be lower from the start.

Situation:

• Dependent freshman (annual limit: $10,500)
• Fall: enrolled in 9 credits
• Spring: enrolled in 9 credits

What happens:

• You complete 18 credits for the year

How this affects your loan:

• Adjusted yearly loan: $7,875
• Fall loan: $3,938
• Spring loan: $3,937

Why this matters:

If you attend part-time all year, your total loan will be lower from the start.

Dropping or withdrawing from a class can affect your financial aid – especially your loans. Contact Financial Aid before you withdraw from a class or all classes. Phone: 320-308-5961 or financialaid@sctcc.edu

Dropping or withdrawing may:

• Reduce future loan disbursements
• Lower your total loan eligibility
• Impact your Satisfactory Academic Progress (SAP)
• Affect repayment if you fall below half-time

1. The college will not engage in revenue-sharing arrangements with any lender. This is defined as any arrangement between a school and a lender that results in the lender paying a fee or other benefits, including a share of the profits, to the school, its officer, employees or agents, as a result of the school recommending the lender to its students or families of those students.
2. Employees in the Financial Aid Office will not accept gifts from any lender, guaranty agency or loan servicer. This ban is not limited to providers of Title IV loans. Providers of private education loans, also known as alternative loans, are included in this provision. The law does provide for some exceptions related to specific types of activities or literature including:
   • Brochures or training material related to default aversion or financial literacy.
   • Food, training or informational materials as part of training as long as that training contributes to the professional development of those individuals attending the training.
   • Favorable terms and benefits to a student employed by the college as long as those same terms are provided to all students at the college.
   • Entrance and exit counseling as long as the college's staff is in control and the services of a specific lender are not promoted.
   • Philanthropic contributions from a lender, guarantee agency, or servicer unrelated to educational loans.
   • State education, grants, scholarships, or financial aid funds administered by or on behalf of the State.
3. No employee of the college's financial aid office will accept any fee, payment or financial benefit as compensation for any type of consulting arrangement or contract to provide services to or on behalf of a lender relating to education loans.
4. Borrowers will not be steered to particular lenders, or delay loan certifications. This includes assigning any first-time borrower's loan to a particular lender as part of their award packaging or other methods.
5. The college will not request nor accept any offer of funds for private loans. This includes any offer of funds for loans to students at the college, including funds for an opportunity pool loan, in exchange for providing concessions or promises to the lender for a specific number of loans, or inclusion on a preferred lender list.
6. The college will not request nor accept any assistance with call center staffing for financial aid office staffing. However, the college can request or accept assistance from a lender related to:
   • Professional development training for financial aid administrators.
   • Providing educational counseling materials, financial literacy materials, or debt management materials to borrowers, provided that such materials disclose to borrowers the identification of any lender that assisted in preparing or providing such materials.
   • Staffing services on a short-term, nonrecurring basis to assist the school with financial aid-related functions during emergencies, including State-declared or federally declared natural disasters, and other localized disasters and emergencies identified by the Secretary.
7. No employee of the institution may receive anything of value from a lender, guarantor, or group in exchange for serving in this capacity. Employees may, however, accept reimbursement for reasonable expenses incurred while serving in this capacity.
8. The college will not permit a lender to use any form of identification related to St. Cloud Technical and Community College on lender promotion materials.