Student Loans
Student loans are educational funds that must be repaid with interest. We strongly encourage you to consider all other options for financing your education first, and use a student loan only as a “last resort” to borrow only what is absolutely needed. Jefferson College is a low-cost institution, and we want to keep your student loan debt at a minimum upon graduation or transfer to a four-year institution.
Types of Student Loans
Jefferson College participates in the Federal Direct Loan Program. Loan eligibility is determined by the Financial Aid Office and loans are made by the U.S. Department of Education. Detailed information regarding the program may be found at the Department of Education's Student Aid Website.
There are two types of federal loans available to students:
- Subsidized Loan- awarded to students with demonstrated financial need as determined by FAFSA. The federal government pays (subsidizes) the interest on the loan while the student is enrolled in school at least half-time and during the grace period.
- Unsubsidized Loan- not based on financial need. The student is responsible for paying the interest on the loan from the time the loan is disbursed. Students can choose to pay the interest while attending school or can allow the interest to accrue.
Repayment on both types of loans begins six months after the student graduates or falls below half-time enrollment.
Interest Rate
Direct Loan interest rates are determined each June for new loans being made for the upcoming award year and posted online at StudentAid.gov. For the 2024-25 academic year, the interest rate on subsidized and unsubsidized Direct Loans is 6.53%.
Loan Eligibility Criteria
In order to be considered for a Direct Loan, students must meet the following eligibility criteria:
- Be enrolled in at least six credit hours of required coursework in an eligible degree or certificate program
- Complete the Free Application for Federal Student Aid (FAFSA) and meet all eligibility criteria
- Have a completed and verified student aid record on file with the Jefferson College Financial Aid Office
- Complete and submit an online Student Loan Request Form
- Meet Satisfactory Academic Progress standards
- Not be in default on any educational loan, show an unwillingness to repay an educational loan, or owe any refund on a grant or student loan
Formula to Determine Loan Eligibility
Subsidized = Cost of Attendance (COA) - Student Aid Index (SAI) - Other Financial Assistance (OFA)
Unsubsidized = Cost of Attendance (COA) - Other Financial Assistance (OFA)
Annual Borrowing Limits
The amount you can borrow each academic year is based on your academic level (freshman or sophomore) and your dependency status (dependent or independent) as determined by the FAFSA. Students may receive less than the annual maximum amounts since borrowing is limited to the cost of attendance minus any other financial aid received.
Dependent Students:
Academic Level | Maximum Subsidized | Total (subsidized and unsubsidized) | Per Semester Limit |
Freshman | $3,500 | $5,500 | $2,250 |
Sophomore | $4,500 | $6,500 | $3,250 |
Independent Students:
Academic Level | Maximum Subsidized | Total (subsidized and unsubsidized) | Per Semester Limit |
Freshman | $3,500 | $9,500 | $4,750 |
Sophomore | $4,500 | $10,500 | $5,250 |
Entrance Counseling
Because borrowing under the Direct Loan program is a serious financial obligation that should not be entered into lightly, all students who borrow a Direct Loan must complete Student Loan Entrance Counseling before loan funds can be disbursed. The entrance loan counseling session is designed to inform students about their rights and responsibilities as a borrower, explain the importance of loan repayment, and make sure students understand the consequence of defaulting on a student loan.
Master Promissory Note
Direct Loans must be repaid with interest, and all students borrowing under the Direct Loan program must sign a Master Promissory Note (MPN) before loan funds can be disbursed. The MPN is your promise to repay the loan and is a legally-binding document between you and the U.S. Department of Education.
Exit Loan Counseling
When a student graduates or drops below half-time attendance, Student Loan Exit Counseling must be completed. The exit loan counseling session will review your repayment obligation, provide information regarding monthly repayment amounts, explain deferment and forbearance options and stress the serious consequences of defaulting on a federal student loan.
Loan Fees
There is an origination fee on Direct Subsidized and Unsubsidized Loans. These fees are a percentage of the total loan amount and are deducted from the amount of money that is disbursed (paid out) to you. This means the money you receive will be less than the amount you actually borrow. Loan fees are established by the Department of Education. The current origination fee on subsidized and unsubsidized loans is 1.057%.
Disbursement
Jefferson College disburses loan funds beginning 30 days after the start of the semester by crediting the student's account. Any funds in excess of direct charges are refunded to the student. All disbursements are made in two payments.
Students can reduce or cancel a student loan by submitting a Request to Cancel or Reduce Financial Aid.
Private Loans
Students who do not qualify to borrow funds from the Federal Direct Loan program may seek loans from private alternative loan companies. Private loans typically offer less favorable interest rates and repayment terms than federal student loans. Below is a list of private lenders who have provided private, non-federal educational loans for students at Jefferson College during the past three years. Please note that borrowers can choose to use any private educational loan provider, even one that is not included on this list:
Steps to Apply
- Complete the FAFSA and include Jefferson College's school code (002468)
- Submit any required verification forms or documents via the online Proverifier+ portal
- If you are a first-time borrower, complete your Student Loan Entrance Counseling Requirement using your FSA ID and password.
- If you are a first-time borrower or do not have an active Master Promissory Note (MPN) on file with the Department of Education, complete a Master Promissory Note (MPN).
- Submit a Student Loan Request Form indicating the amount you wish to borrow. Once your request for loan funds is processed, you will receive notification of the approved loan amount. The Department of Education will also send you a notice.
