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Federal Student Loans

Loans

The financial aid office has several individuals with student loan expertise available to answer your questions, comments, or concerns.  Furthermore, Rebecca Ramsey is our office's specialist / point-of-contact for loans.  We recommend that you speak to her and visit https://studentaid.gov/understand-aid/types/loans before borrowing a federal or private student loan.  Mrs. Ramsey can be contacted by visiting the financial aid office in-person, emailing RRamsey@GulfCoast.edu, or calling (850) 873-3517.

In addition, GCSC has partnered with Student ConnectionsSM to help you understand your loan repayment commitments and address any issues you may encounter when the time comes to start paying back your loans.  You can learn more about Student ConnectionsSM by visiting their http://www.repaymyloans.org/ webpage.

Federal DIRECT Loans 

Federal Direct Loans are financial aid funds that students or parents can borrow to pay for educational expenses.  Federal Direct Loans have to be repaid with interest and require a FAFSA for the current academic year.  Please visit the U.S. Department of Education's (ED) https://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html webpage to view GCSC's Cohort Default Rate and to see how it compares to other institutions / the national average.  The percentage of students who borrow at GCSC can separately be found at ED's https://collegescorecard.ed.gov webpage.

  • Federal Direct Loan Basics
    • Subsidized loans are need-based, low interest, federally subsidized loans. These loans have no interest while the student is in school at least six credit hours.
    • Unsubsidized loans are not based on need and the interest is not subsidized by the federal government. Therefore, students are responsible for all interest accrued.
    • Federal Direct Subsidized & Direct Unsubsidized Loans are low interest loans where repayment is deferred until after you graduate, withdraw, or attend less than half-time. More information can be found online at https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized.
    • A 1-2% origination fee may be charged by US Department of Education to students at time of disbursement.
    • Students are given a one-time six month grace period to begin their repayment, once they are no longer enrolled in the minimum credit hours.
    • Loans will not disburse to student GCSC accounts for at least 30 days from the first day of class.
    • Loans will be processed for subsidized eligibility only, unless unsubsidized loans are specifically requested on the Direct Loan Request Form.
    • Students have the ability to borrow less than the maximum student loan amount allowed.
    • Visit https://studentaid.gov/app/repaymentEstimator.action for repayment estimator.
  • General Eligibility Requirements for ALL Federal Direct Loan Programs
    • Students are required to complete the Free Application for Federal Student Aid (FAFSA).
    • All students applying for the Direct Stafford loan must be citizens or eligible non-citizens.
    • All students must be enrolled in at least six credit hours (half-time) that span throughout the entire semester. You will not receive a disbursement until you are actively attending the six credit hours.
    • Students must have and maintain a cumulative 2.0 GPA for all credits attempted (including transfer credits).
    • Students must complete 67% of the cumulative hours attempted (including transfer credits) to maintain eligibility.
    • Students must meet all Satisfactory Academic Progress (SAP) standards.
    • Not exceed the aggregate or yearly loan limits, including loans received prior to attending GCSC. Limits are listed here.
    • All students must complete Exit Counseling when they graduate, withdraw, or drop below half-time. Students can click here to access exit counseling.
    • Semester only (including summer) loans may have two equal disbursements within the semester. 

     To Continue Eligibility for Direct Subsidized,  Direct Unsubsidized and/or Direct PLUS Loans:

    • Students must reapply every year.
    • Students must maintain satisfactory academic progress to continue eligibility for funding as stated in the general eligibility requirements.
    • Students must not exceed the aggregate loan limits, including loans received prior to attending GCSC.
    • Students who expect to use the Direct Stafford Loan to pay tuition and fees must complete the entire process at least one month before fees are due for the upcoming semester! (See catalog for due dates)  If you do not meet this deadline, you must make other arrangements to pay tuition and fees.
  • Federal Direct Loan Procedures

    Students must complete the following steps to request a Federal Direct Loan (Subsidized, Unsubsidized):

    1. Complete a FAFSA by visiting https://studentaid.gov/sa/fafsa
    2. Submit a 'Request a Federal Student Loan' form in Lighthouse
    3. Visit https://studentaid.gov and

      1. Complete Entrance Counseling
      2. Complete a Master Promissory Note
      3. Returning students will also need to complete an "Annual Student Loan Acknowledgment" starting in the 2020-2021 academic year.  ED is still finalizing this rule and the steps necessary to complete this step in the process, so please check back for updates.

        Financial Awareness Counseling is strongly recommended for any student with previous loan debt

     

    Once eligibility is determined, you will see award information on Lighthouse. A "Notice of Guarantee and Disclosure Statement" indicating dollar amounts and disbursement dates for the terms requested will separately be mailed or emailed to you by ED within two weeks of your loan origination.

  • Federal Direct Parent PLUS Loan Procedures

    A Federal Direct Parent PLUS Loan is a credit-based low interest loan that a parent can borrow in order to fund their dependent child's education.

    Parents must complete the following steps to request a Federal Direct Parent PLUS Loan:

    1. Visit https://studentaid.gov and 

      1. Submit a Parent PLUS pre-application
      2. Complete PLUS Entrance Counseling
      3. Complete a PLUS Master Promissory Note 
      4. Complete an "Annual Student Loan Acknowledgment"
    2. Ensure that your student has completed a FAFSA by visiting https://studentaid.gov/sa/fafsa
    3. Submit a Federal Direct PLUS Loan Authorization Form to the financial aid office 

    Please note - all Federal Direct/Stafford Subsidized and Unsubsidized Loans will be awarded to the dependent student before Federal Direct PLUS loans. 

Private / Alternative Loans

Private /alternative student loans are not funded or subsidized by the federal government; instead, they are funded by banks, credit unions, or other types of lenders. The bank or lender – not the federal government – sets interest rates, loan limits, terms, and conditions of private / alternative student loans.  Please visit https://studentaid.gov/understand-aid/types/loans for more information.

  • Private / Alternative Loan Basics

    A private or alternative loan is a loan offered by a private bank / lender that DOES NOT have the same benefits as a federal loan.  A student cannot receive a private loan that is greater than the cost of education minus other financial aid received.  It is in your best interest to exhaust all grant, scholarship, work-study and Federal Direct Loan options prior to considering a private / alternative loan.  Be advised that students have federally protected rights regarding private educational loans.  Information regarding these rights can be found online at http://www.consumerfinance.gov/eregulations/1026 or https://www.fdic.gov/regulations/laws/rules/6500-100.html.

  • Private / Alternative Loan Procedures
    1. Research private / alternative loan lenders.
    2. Contact the private / alternative loan lenders that you're most comfortable with based upon your research in order to inquire about their application procedure.
    3. Once approved, complete and submit a Private Education Loan Self Certification Form to your private / alternative loan lender.  
    4. Request private / alternative loan certification by emailing the Financial Aid Office at FA@GULFCOAST.EDU from your GCSC account.


    Please note:

    • GCSC uses ELM for all private / alternative loan certifications.
    • Private / alternative loans will not be certified for continuing education courses, i.e. you have to be a degree or certificate seeking student in order to receive private loan disbursement at GCSC.  

What are the differences between federal DIRECT and private / ALTERNATIVE loans?

Federal student loans are loans made or guaranteed by the Department of Education. Private / alternative loans are any other type of student loans.  While both federal student loans and private / alternative student loans allow you to borrow money to pay for education expenses, there are some distinct differences.  Please visit http://www.consumerfinance.gov/askcfpb/545/what-are-main-differences-between-federal-student-loans-and-private-student-loans.html for more information.

  • Differences
    Federal Private / Alternative
    You will not have to start repaying your federal student loans until you graduate, leave school, or change your enrollment status to less than half-time. Many private student loans require payments while you are still in school.
    The interest rate is fixed and is often lower than private loans and much lower than some credit card interest rates. View the current interest rates on federal student loans. Private student loans can have variable interest rates, some greater than 18%. A variable rate may substantially increase the total amount you repay.
    Undergraduate students with financial need will likely qualify for a subsidized loan where the government pays the interest while you are in school on at least a half-time basis. Private student loans are not subsidized. No one will pay the interest on your loan other than you.
    You don’t need to get a credit check for most federal student loans (except for PLUS loans). Federal student loans can help you establish a good credit record. Private student loans may require an established credit record. The cost of a private student loan will depend on your credit score and other factors.
    You won’t need a cosigner to get a federal student loan in most cases. You may need a cosigner.
    Interest may be tax deductible. Interest may not be tax deductible.
    Loans can be consolidated into a Direct Consolidation Loan.  Visit https://studentaid.ed.gov/sa/repay-loans/consolidation to learn about consolidation options. Private student loans cannot currently be consolidated into a Direct Consolidation Loan.
    If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments. Private student loans may not offer forbearance or deferment options.
    There are several repayment plans, including an option to tie your monthly payment to your income. Private student loans may not offer forbearance or deferment options.
    There is no prepayment penalty fee. There may be prepayment penalty fees.
    You may be eligible to have some portion of your loans forgiven if you work in public service. It is unlikely that your lender will offer a loan forgiveness program.
    Free help is available at 1-800-4-FED-AID and on our websites. The Consumer Financial Protection Bureau's private student loan ombudsman may be able to assist you if you have concerns about your private student loan.

Source: https://studentaid.gov/understand-aid/types/loans/federal-vs-private

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