Loans are borrowed money you must repay with interest. Southwestern participates in the William D. Ford Federal Direct Loan Program. Direct Loan funds come directly from the Department of Education to Southwestern; therefore, you need not visit a bank or lender for a loan application.
To apply for a student loan at Southwestern, you must:
- Complete the Free Application for Federal Student Aid and indicate you are interested in student loans
- Be enrolled at least half-time
- Not be currently in default on a federal student loan
- Meet all other eligibility criteria
When a Direct Stafford loan is included in your award packet, you can choose to accept, decline or accept a portion of the loan. If you decide to accept a loan, you must complete the following:
- Electronic Master Promissory Note (MPN) is available at studentloans.gov
- Complete loan entrance counseling if you are a first-time borrower at Southwestern
Entrance and Exit Counseling
Direct Loan Entrance Counseling provides students with their rights and responsibilities as borrowers. It is a federal regulation that entrance counseling be completed by first-time loan borrowers before any loan proceeds can be credited to a student’s account. Entrance counseling can be completed online at studentloans.gov.
Direct Loan Exit Counseling must be completed by students who are leaving Southwestern or dropping below half-time enrollment. It is a federal regulation that Southwestern provide specific loan information to students before they leave the institution, even if they will be re-enrolling at another school. Exit Counseling may be completed online at nsldsfap.ed.gov; however, your federal PIN is required to access your specific loan account information.
Preferred Lender Lists
Southwestern Community College does not promote any outside lenders. Students are advised to seek private fund sources if needed on their own. Therefore, Southwestern Community College does not provide a preferred list.
Preferred Lender Arrangements
Southwestern Community College does not promote any outside lenders. Students are advised to seek private fund sources if needed on their own.
Federal Direct Student Loan Program- Subsidized and Unsubsidized
Subsidized loans are need-based, fixed 5.05 percent interest rate loans available to assist students for educational costs. (Interest rates subject to change.) Students must file a completed Free Application for Federal Student Aid (FAFSA) and be enrolled at least half-time to apply for a loan. The government pays the interest on the subsidized loan during periods of enrollment and the six-month grace period. The student pays all interest after receiving an unsubsidized loan.
Repayment for both loan types begins six months after terminating enrollment or dropping to less than half-time. The maximum annual subsidized/unsubsidized Direct Loan amounts are $3,500 for freshmen and $4,500 for sophomores. Independent students may be eligible to receive additional unsubsidized loans. Entrance and exit counseling are required. Students who advance their grade-level mid-year may inquire with the financial aid office to increase their loan amount within cost of attendance.
Federal Direct Parent Loans for Undergraduate Students (PLUS)
A PLUS loan is a fixed 7.21 percent interest rate loan that is available to parents of dependent students. Students must be enrolled at least half-time. Parents can borrow the cost of the dependent student’s education minus any financial aid the student receives. Parents apply at studentloans.gov and will need the FSA ID that they used to sign their child’s FAFSA.