Applying for a Direct Plus Loan:
Direct PLUS Loans (Parent Loan for Undergraduate Dependent Students) are for parents of dependent undergraduate students who do not qualify for need based money to help meet educational costs not covered by other sources of aid. Parents may borrow up to the cost of attendance minus other sources of aid received by the student. The interest rate for loans after July 1, 2011 is fixed at 7.90%. Follow the steps below to apply for a Direct PLUS Loan at Spoon River College.
1. Parents complete a promissory note at www.studentloans.gov.
2. Parents also need to complete a 2013-2014 PLUSLoanRequest1314.doc(Microsoft Word Format) or PLUSLoanRequest1314.pdf(PDF Document).
3. SRC will then certify enrollment, cost of attendance and the loan amount approved.
4. Once the loans have been guaranteed by the Department of Education, funds can be disbursed to the school as early as the first day of class.
5. Failure of a student to attend courses for which they are enrolled will necessitate the parent return funds to SRC for return to the Department of Education.
6. Failure of the student to remain enrolled until the 11th week of the semester or to complete any course for the semester successfully (D grade or better) necessitates a recalculation of your aid eligibility and may result in you being eligible for less aid and having to repay amounts of aid that you previously received.
Alternative or Private Student Loans
Private student loans are nonfederal loans issued by a lender such as a bank or credit union. Private student loans often have variable interest rates, require a credit check and do not provide the same benefits to student borrowers as the federally guaranteed student loans.
Federal student loans offer borrowers many benefits not typically found in private loans. These include low fixed interest rates, income-based repayment plans, and loan forgiveness and deferment options, including deferment of loan payments when a student returns to school. For these reasons, students and parents should always exhaust federal student loan options before considering a private loan.
SRC Student Loan Code of Conduct
Understanding Your Loan Repayment Process:
What’s a Grace Period?
The grace period is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan.
- Direct Subsidized Loans and Direct Unsubsidized Loans have a six-month grace period before payments are due.
- PLUS loans have no grace period. They enter repayment once they are fully disbursed but may be eligible for a deferment. Contact your loan servicer for more information.
How much will I need to pay?
Your bill will tell you how much to pay. Your payment (usually made monthly) depends on:
Where do I find my Lender’s information?
Visit www.nslds.ed.gov to view your lenders information. You will need to click on Financial Aid Review.
Information needed to view your loans:
- Social Security Number
- First two letters of your last name
- Date of birth
- Your Department of Education Pin Number (used to sign your FAFSA)
What should I do if I’m having trouble making my loan payment?
Contact your loan servicer as soon as possible. You may be able to change your repayment plan to one that will allow you to have a longer repayment period or to one that is based on your income. Also ask your loan servicer about your options for deferment or forbearance or loan consolidation.
What happens if I don’t make my student loan payment?
- The entire unpaid balance of your loan and any interest is immediately due and payable.
- You lose eligibility for deferment, forbearance, and repayment plans.
- You lose eligibility for additional federal student aid.
- Your loan account is assigned to a collection agency
- The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or a house or to get a credit card.
- Your federal and state taxes may be withheld through a tax offset. This means that the IRS can take your federal and state tax refund to collect any of your defaulted student loan debt.
- Your student loan debt will increase because of the late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process.
- Your employer (at the request of the federal government) can withhold money from your pay and send the money to the government. This is called wage garnishment.
- It will take years to reestablish your credit and recover from default.
Don’t let your Student Loan go into Default!!
Take Steps to Avoid Default
Understand Your Loan and Loan Agreement
- Know the type of loan you are receiving. Understand the costs, the interest rate and the repayment terms.
- Read your Promissory Note. It is a legal document and signing it means you agree to repay the loan according to the terms of the note. You Must repay all the loans you receive, even if you don’t complete your education.
Borrow only what you need to pay for your college expense
- Create a budget to determine how much you really need to borrow.
- Complete Financial Awareness Counseling.
Track Your Loans Online by visiting www.NSLDS.ed.gov to view your borrowed loans and Lender information.
Keep Good Records of the following important documents
- Financial Award Letters
- Loan counseling materials
- Your Promissory Note
- Amounts and account numbers of all student loans you borrowed
- Loan Servicer contact information
- Loan disclosures
- Payment schedules
- Record of monthly payments
- Notes about any questions you asked about your student loan, answers, and name of person whom you spoke
- Deferment or forbearance paperwork and notes of any phone calls to loan servicer
- Documentation that you paid your loan in full
Notify Your Loan Servicer when you
- Need help making your monthly payments
- Withdraw from school
- Drop below half-time enrollment status at school
- Change your name, address, or Social Security number
- Transfer to another school
- Experience a change in your life that might impact your loan payments
||Length of Repayment
||$205.78 - $617.34
|Extended Fixed Repayment
|Extended Graduated Repayment
||$175.67 – $307.46
Other plans including Income-Based repayment (IBR), Pay as you Earn, Income Contingent, and Income Sensitive are all based on your income and other elements to determine payments. With all of these plans you will end up paying back more over time than you would with the standard repayment plan.
Always contact your lender if you are unable to make payments to see if another plan would better fit your current situation. View lender information on your Financial Aid Review page at www.nslds.ed.gov.
For More information on types of student loans and repayment options visit www.studentloans.gov