Federal Direct Loan Program
There are two types of Federal Direct loans that may be awarded to eligible students; subsidized and unsubsidized. The Federal Direct Loan is not a credit based loan, rather it is awarded to students based on the information provided on the FAFSA. Students must be enrolled in at least six credits and may be eligible for either a subsidized and/or an unsubsidized Federal Direct Loan. The school determines what type of loan the student is eligible for based on the information provided on the Free Application for Federal Student Aid (FAFSA).
Direct Subsidized Loans:
A Federal Direct Subsidized Loan is available to undergraduate students with financial need. The Federal government pays the interest on these loans while the student is enrolled for at least six credits during the student’s grace period and during periods of deferment. *Note: If the student has received a Direct Subsidized Loan that is first disbursed between July 1, 2012 and July 1, 2014, the student will be responsible for paying any interest that accrues during the grace period.Direct Unsubsidized Loans:
A Federal Direct Unsubsidized Loan is available to undergraduate students and is not based on financial need. Students are responsible for paying the interest during all periods: in-school, grace, and deferment. Interest accruing these periods may be paid or capitalized.How to Apply for your Federal Direct Loan
- Complete a Free Application for Federal Student Aid (FAFSA) by clicking here.
- Complete a Financial Aid Response Form provided by Pennsylvania Highlands Community College Financial Aid Office and found on the student myPEAK portal under the Pay for College tab.
- Complete a Direct Loan Master Promissory Note (loan note agreement) online by clicking here.
- Complete Direct Loan Entrance Counseling online by clicking here.
Loan funds will be released to the college on the set disbursement dates for each semester. All federal loans are scheduled to disburse at approximately the 50% mark after the beginning of each semester provided the loan is approved prior to the start of the semester. Summer loans will disburse in July after the drop/add period of the latest starting summer session. Loans will be processed for 50% of your annual eligibility per semester provided you meet eligibility requirements. You have the right to accept, reduce, or decline loans at any time prior to the disbursement dates by contacting the Financial Aid Office. You may return loan funds after disbursement provided you notify the Financial Aid Office or the Bursar’s Office within 14 days of disbursement. We strongly encourage all students to practice responsible borrowing. Borrow only those funds needed to cover your cost of attending Pennsylvania Highlands Community College.
Interest Rates
For undergraduate students that receive the Federal Direct Loans (subsidized or unsubsidized) that are disbursed between July 1, 2021 and June 30, 2022, the interest rate on your loan is 3.73%.
Federal Direct Loan Limits
The school determines the actual loan amount students are eligible to receive each academic year; however, there are limits on the maximum amount of subsidized and unsubsidized loans that students are eligible to receive each academic year and over the students’ academic career. Annual Federal Direct Loan limits are as follows.
Year Dependent Students (except students whose parents are unable to obtain PLUS Loans) Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans) First-Year Undergraduate $5,500 – No more than $3,500 of this amount may be in subsidized loans. $9,500 – No more than $3,500 of this amount may be in subsidized loans Second-Year Undergraduate $6,500 – No more than $4,500 of this amount may be in subsidized loans. $10,500 – No more than $4,500 of this amount may be in subsidized loans. Third-Year and Beyond Undergraduate $7,500 per year – No more than $5,500 of this amount may be in subsidized loans. $12,500 per year – No more than $5,500 of this amount may be in subsidized loans. Graduate or Professional Degree Students Not Applicable (all graduate and professional students are considered independent) $20,500 Subsidized and Unsubsidized Aggregate Loan Limits $31,000 – No more than $23,000 of this amount may be in subsidized loans. $57,500 for undergraduates – No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students – No more than $65,500 of this amount may be in subsidized loans. The graduate debt limit includes all federal loans received for undergraduate study.
Master Promissory Note and Loan Entrance Counseling
Students who would like to accept the Federal Direct Loan awards must complete both the Master Promissory Note (MPN) and the Loan Entrance Counseling. The Master Promissory Note is the loan note agreement that the student is required to complete as a promise to repay the loan. The Entrance Counseling goes over the rights and responsibilities of the Federal Direct Loan program. The student can complete both of the documents online by clicking here. The Financial Aid Office will not certify your loan until both the Master Promissory Note (MPN) and Entrance Counseling is complete. Should you have questions or concerns, please contact the Financial Aid Office for instructions on how to complete these documents.
Direct Parent Loan for Undergraduate Students (Direct PLUS)
Parents who wish to borrow under the Direct Parent Loan for Undergraduate Students (PLUS) Loan Program can complete the Direct PLUS Loan application online by clicking here. Direct Parent Loans are credit based loans, the lender will perform a credit check for qualification. Students whose parents are denied a Direct PLUS Loan may be eligible to borrow additional unsubsidized Federal Direct Loan Funds by submitting a signed, dated statement to include the student’s name and student ID#, requesting the additional direct unsubsidized Stafford Loan and attach the Direct Parent PLUS Loan denial letter.
Deadlines
The student must submit their direct federal loan request 3 weeks prior to the end of the semester in which they are attending, except when requesting a fall/spring loan. If the student was attending at an eligible level during the fall semester, the fall/spring request can be submitted 3 weeks prior to the end of the spring semester. Please allow approximately 3-5 weeks for electronic processing, and 4-6 weeks for manual processing. Loans that are approved prior to the billing due date will hold your course registration.
Loan Exit Counseling
If you have received Federal Direct Loans at Pennsylvania Highlands Community College under the Direct Loan Program and will be graduating or will be transferring or have dropped to less than half time, you are required to complete Direct Loan Exit Counseling. You may complete this counseling online by clicking here.
Private/Alternative Educational Loans
These are credit based loans that are provided by private lenders. At Pennsylvania Highlands, most students do not need an alternative loan, however, it is the responsibility of the student to seek out, research and select a potential lender should you need additional funding. You may contact our office to determine how we can work best with the lender that you select.
