Student Loans

There are two types of student loans sponsored by the federal government; subsidized and unsubsidized. On a subsidized Federal Stafford Student loan the interest is paid by the government while the student is in school and during the grace and deferment periods. A student may qualify to borrow up to $3,500 per academic year as a freshman and a maximum of $4,500 per academic year at the sophomore level. Students are classified as freshman (Grade Level 1) if they have between 0 and 29 credit hours. They are considered to be sophomores (Grade Level 2) when they have earned 30 or more hours. A subsidized loan is need-based and the actual amount that a student is eligible to receive is based on the cost of attendance minus the expected family contribution and any other financial aid the student is receiving. The amount left after these deductions is the amount of unmet need and is the amount of the loan the student can request. It can not exceed the $3,500 or $4,500.

On an unsubsidized loan the interest is paid by the student borrower and is not based on financial need. The interest accrues during in-school, grace, and deferment periods. You may choose to make interest payments while in school or you may defer the interest until repayment starts. The accrued interest will be added to your original loan amount.

Dependent students can only receive unsubsidized Stafford loans if they are not eligible for the maximum subsidized Stafford loan. The total loan amount for a school year cannot exceed the $3,500 for a dependent freshman or $4,500 for dependent sophomores.

A student is classified as a dependent student if they are younger than 24, are not married, do not have dependents, are not an orphan or ward of the court, or not a veteran of the military.

Independent students can receive an additional unsubsidized Stafford loan of up to $4,000 for the academic school year.

Students apply for loans by completing the FAFSA, a Master Promissory Note (MPN) at www.mohela.com/loanconnect/sfcc or a paper MPN (available at the Financial Aid Office), the 2007-2008 SFCC Student Loan Data Sheet application, and entrance counseling which can be accomplished at www.mappingyourfuture.org. If your lender is not listed on the MOHELA loan connect web site you will need to complete a paper MPN. Some lenders have the electronic version of the MPN available on their web site. If you complete an electronic MPN please print a copy of the completed form and give it to the Financial Aid Office. You can get paper versions of these forms from a Financial Aid Advisor. The MPN is mailed to the lender and/or guarantee agency and the SFCC loan application and entrance counseling confirmation page must be brought to the SFCC Financial Aid Office. You may request the type of loan you want, however, the Financial Aid Office will make final determination of which loan type(s) you are eligible to receive. A Financial Aid Advisor will verify your eligibility and process your loan application. It is very important for students to select a lender for their loan and annotate that lender's information on the SFCC student loan application. Students may select any lender who participates in the Federal Family Education Loan Program (FFELP).

Student loans are electronically delivered to SFCC and are disbursed in at least two payments to the school. The school will verify that you are still enrolled at least half-time and making satisfactory academic progress before releasing the proceeds to you.

List of Lenders

For a complete list of lenders who provide student loans through the Federal Family Education Loan Program you may go to the Missouri Department of Higher Education web site. They have three listings; a complete list, lenders who pay the Federal Origination Fee for the student, and lenders who pay the Federal Default Fee.

Loan Eligibility Criteria

A student must be enrolled at least half-time (six credit hours) to be eligible for Stafford loans. The student must also be admitted to the college as a “regular” student in a program of study and meet the SFCC Standards of Academic Progress and GPA to borrow a Stafford Loan. Any student with any college course work will be evaluated based on SFCC’s Standards of Academic Progress and hours Attempted Toward Degree Completion.

Eligibility for the second disbursement on a two-semester loan or to apply for an additional loan will be determined according to SFCC’s Standards of Progress and Hours Attempted Toward Degree Completion.

Parent PLUS Loans

Under the Federal Parent Loan for Undergraduate Students (PLUS) program, parents may borrow up to the cost of attendance minus any financial aid the student is receiving . The PLUS loan is not need-based. It has a variable interest rate capped at 8.5 percent and the repayment of the principal and interest begins 30-60 days after the loan is fully disbursed. Parents may apply for a PLUS loan from any lender who participates in the Federal Family Education Loan Program (FFELP) and offers PLUS loans. If parents desire to apply for a parent loan through MOHELA they may go to the MOHELA web site www.mohela.com/loanconnect/sfcc. In any case please forward a copy of the PLUS Master Promissory Note to the SFCC Financial Aid Office. A SFCC Financial Aid Advisor will use this MPN in the certification process.

General eligibility requirements are the student must be pursuing a degree/certificate, must be a U.S citizen or eligible noncitizen, must be registered with the Selective Service (if male), must not have eligibility suspended or terminated due to a drug-related conviction, must have a valid social security number, must not be in default on a federal student loan, must not owe repayment of a federal grant, and must maintain satisfactory academic progress as defined by the college (see “Standards of Progress).

Please remember that ALL STUDENT LOANS MUST BE REPAID! So before deciding to take out a loan, think about how much debt you want to have when you graduate from college.

Which Lender Should A Student or Parent Select For Their Loan?

It is extremely important to understand borrowers must choose the lender for their student and parent educational loans. You may choose any lender that participates in the Federal Family Education Loan Programs (FFELP), whether they are included on the State Fair Community College lender list or not. The State Fair Community College lender list includes lenders that have been evaluated by State Fair Community College using criteria we deem appropriate and valuable to consider when borrowing a student loan. The criteria used for this selection is found under the heading Criteria To Be Placed on the State Fair Community College Lender List in this pamphlet. However, the bottom line is it is up to you which lender you choose for your educational loan.

Who decides what lending institution my student loan will come from?

Does the lending institution participate in the Federal Family Education Loan Program (FFELP)?

You might want to contact the financial institution with which you or your family does business to see if they participate in the student loan program. Not all lenders participate in FFELP. You may also request a list of participating lenders from SFCC or view the eligible lender list on the MDHE website at http://www.dhe.mo.gov/mdhe/lenderlist.jsp .

Does the lending institution pay any of the student loan fees?

Federal law allows origination and guarantee fees to be charged to student loan borrowers. The origination fee is 3 percent of the loan amount and the guarantee fee is 1 percent of the loan amount. Normally, your lender will deduct these fees from your original student loan amount. This reduces the total funds available to the student to pay for their educational costs.

There are many lenders and some guarantee agencies that pay all or part of these fees for the student. As a result of the lender paying these fees for the student, the student receives more funds to apply toward his/her educational costs.

Does the lending institution sell the student loan to another agency?

Many times loans are sold and the borrower benefits change. This primarily impacts repayment options and deferment of repayment. If the lender does say they sell their loans, will the borrower benefits they offer continue with the new loan holder?

What kind of customer service does the lending institution offer to the student?

Consider customer service hours, availability to contact through the internet or email, do their informational handouts thoroughly explain the loan, loan options, loan repayment options, deferment options and deferment request procedures.

Does the lending institution provide any borrower benefits?

Consider repayment options and offers to repay portions of the loan in particular situations. Additionally, some lenders reduce interest rates for signing up for auto-debit repayment.

Does the guarantee agency provide any incentives?

Some guarantee agencies have an additional interest rate reduction if you choose them as the guarantor for the student loan. So finding out who your lender will use to guarantee the loan can have a big impact on the total interest accumulated on a student loan. For example, the the Missouri Department of Higher Education (MDHE) has a .5% additional interest rate reduction when they are the guarantor.

Criteria To Be Placed on the State Fair Community College Lender List

State Fair Community College Financial Aid Office provides a list of lenders that have been evaluated and determined to meet our strict quality control standards. All lenders are eligible to be on this list, and the list is updated once a year by a committee.

10. Does processing the lender’s loans require State Fair Community College to process student loans outside of our normal procedures i.e. through batch processing and minimal manual intervention?

3. A student or parent borrower may select any lender and is not restricted to the lenders presented on the State Fair Community College lender list. A borrower should not be directed to any specific lender by the College

4. A student or parent has the right to cancel their student loan, in part or in full. The request for cancellation must be submitted to the State Fair Community College Financial Aid Office.

5. Lenders may retain the borrower’s loan while in school and throughout the repayment period; other lenders may sell loans on the secondary market. In order to determine which practice a lender engages in the borrower should contact the lender.

6. Alternative Educational Loans provide additional educational funding options but generally have higher, variable interest rates as well as different repayment terms and options. Potential borrowers should carefully compare all loan terms and conditions.