Financial Aid Office

Types of Financial Aid:

Loans

SDC also participates in the Federal Family Education Loan (FFEL) Program, which is currently open to both undergraduate and graduate students. Various options are offered under this program, including the Subsidized and Unsubsidized Federal Stafford Loans and the Federal Parent Loan for undergraduate students (PLUS). Loans are usually calculated for three semesters.

You are obligated to repay your loan and there are loan options for all income levels. Once you complete your FAFSA online your Financial Aid Award Letter will state the type of loan for which you are eligible and how to apply for the loan.

What is Different About Student Loans?
Several different aspects make student loans extremely attractive to students who need funds to cover their tuition and other expenses. There are several types of student loans, but what makes student loans different from other loans is that they offer students:

• A fixed low rate (usually the lowest rates available.)
• Longer repayment periods which mean lower monthly "pay back" costs than "non-student" loans
• A rate that is capped meaning it can never go above a certain amount
• Flexible repayment options
• The ability to defer (freeze) payments due to change in work status or upon enrolling in another degree program
• The option of not having to start paying back the loan until after completing school
• The ability to secure the loans without previous credit history being taken into account (not including previous student loans in default status).
• A wide variety of student loan programs depending on your circumstances
• The option of consolidating the loan in the future at a lower rate if the current rates goes down
• Tax deductible interest

Different Types of Loans

Federal Stafford Loans

Federal Stafford Loans are low interest, long-term loans that are regulated by the Federal Government and are designed to provide student with funds to help pay for their education. This loan may be borrowed from a bank, a credit union, other eligible lenders, or directly from the Government.
Federal Stafford Loans are the most common source of education loan funds, and are currently available to both graduate and undergraduate students. There are two types:

Federal Subsidized

This is a need-based, long-term, low-interest loan. The federal government pays the interest on these loans while the student is in school and repayment does not start until  6 months after leaving school (called a grace period). Eligibility: You must be a U.S. citizen or permanent resident and a full- or half-time undergraduate or graduate student.

Annual Limits
 
Year 1
 $3,500 per year*
 
Year 2
 $4,500 per year*
 
Years 3 and 4
 $5,500 per year*
 
Graduate Student
 $8,500 per year
*2007-2008.  July 1, 2007 the limits change.

Interest rate: Contact the Financial Aid Office for current interest rates.

Federal Unsubsidized

These loans are available for students who don't qualify for subsidized loans. You, the borrower and may be used to also increase the borrowing limit for independent students.  Students are responsible for the interest on this loan as soon as it is taken out while you are attending school. Most of the terms and conditions of subsidized and non-subsidized Stafford loans are the same. For instance, like the Subsidized Loan, full repayment does not begin till 6 months after leaving school.  

Eligibility:

U.S. citizen or permanent resident.
Full- or half-time undergraduate or graduate student.
Non-need based.
No credit check required.
Loan limits:
Independent students are allowed to borrow more than dependent undergraduate students.

Annual limits:
 
Year 1
 $2,625 (dependent)
 
$6,625 (independent)
 
Year 2
 $3,500 (dependent)
 
$7,500 (independent)
 
Year 3 and 4
 $5,500 per year (dependent)
 
$10,500 per year (independent)
 
Graduate student
$20,500* per year (less amount of subsidized Stafford load awarded)
*2007-2008. July 1, 2007 the limits change.

Cumulative loan limits differ for undergraduate and graduate/professional students. For undergraduate students:

Dependent-$23,000 between subsidized and unsubsidized Stafford loans

Independent-$46,000 (up to $23,000 may be in subsidized Stafford loans)

For graduate and professional students:

$138,500 (up to $65,500 may be in subsidized Stafford loans)

Interest rate: Contact the Financial Aid Office for interest rates.

Federal PLUS Loans 
Federal PLUS Loans are available to parents with dependents who are full or half time undergraduate students. Eligibility is not based on financial need because these loans are based on credit history and require a credit check. The interest rate is low and repayment may begin immediately. Parents may borrow up to the cost of education minus any financial aid the student receives.

Alternative Loans
Alternative Loans are also sometimes referred to as Private Loans and are education loans offered by private lenders to help eliminate or reduce the difference between what your school offers you and what you have to pay. Usually, these type of loans have a higher interest rate than government loans. Some private loans can be obtained directly from your school.

Private lenders may require a credit check and/or an income-to-debt ratio check on either you (the borrower), co-signer or both. These loans are not based on financial need but lenders may provide different types of loans programs based on a student's level of study. As a borrower, you should compare competitive interest rates and repayment options with those of other loans, including Federal and State education loans, credit cards, personal loans from relatives or friends, and other types of loans. Be sure to ask about any hidden charges and fees.

Because they are less attractive in terms of interest rate and payment options than Government Student Loans, students and families usually only consider private or alternative loans when the Financial Aid package does not provide enough funding to meet their educational needs.

Loan Payment Deferments
If you are already repaying, or expect to begin repaying student loans, and face a situation that may prevent you from meeting the repayment schedule, you may apply for a deferment and avoid going into loan default status. Check with your lender on how to apply for deferments.

Loan Repayment Information
We cannot stress enough that a loan is a debt that must be repaid. In fact, paying your student loans are a great way to build a good credit history but failure to repay your student loans will be very harmful to your credit rating.