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Loans

 

Union County College Financial Aid Office encourages students to explore various grants and scholarship opportunities and to evaluate loan options carefully. Borrow only what is really needed and remember that loans must be repaid.

What is a Federal Direct Student loan?
Federal Direct Student loans are one form of student "self help" financial aid. Through the Federal Direct Student loan program students borrow money for college from the federal government.

How much can I borrow?
  • $5,500 is the maximum annual amount a Freshman (0-29 credits) is eligible for, no more than $3,500 of which can be subsidized.
  • $6,500 is the maximum annual amount a Sophomore (30 credits) is eligible for, no more than $4,500 of which can be subsidized.
  • Independent students and students whose parent(s) are denied a Federal PLUS Loan qualify for additional unsubsidized loans.
What is the difference between a subsidized and an unsubsidized loan?
For the Federal Direct Subsidized Student Loan, the federal government will pay the interest until you enter your grace period; the time you are no longer enrolled on at least a half-time basis. Repayment begins six months after you cease to be enrolled at least half-time (including leaves of absence). The interest rate for Federal Direct Subsidized Loans for undergraduate students for which the first disbursement is made on or after July 1, 2013 and before July 1, 2014 will be 3.86%.

Please note: For all new borrowers who receive a loan on or after July 1, 2013 a 150% limitation is in effect. This means a student who is eligible for a subsidized loan will reach their subsidized limit at 150% of a program’s length of study. Once a student has reached their 150% limitation, their interest subsidy Loan limit will end on all outstanding loans that were disbursed after July 1, 2013, and interest will begin to accrue. Students are therefore encouraged to complete undergraduate study on a timely basis.
For the Federal Direct Unsubsidized Student Loan, the government does not pay the interest while a student is in school as it does for the subsidized loan. Interest accrues and must be paid or capitalized during periods of enrollment in school and/or deferment. The interest rate for
Federal Direct Unsubsidized Loans for all students disbursed on or after July 1, 2013 will be 3.86
%.
 

Are there any federal loans available to parents?
The Federal Direct PLUS Loan (parent loan for undergraduate, dependent students) is a loan from the U.S. Department of Education for parents of undergraduate students who complete a FAFSA and meet general eligibility requirements. The amount your parent will be eligible to borrow for the 2013-2014 school year will be indicated on your award letter. The interest rate on PLUS loans is 3.15%. A credit check will be conduct on the parent’s credit history. A low-interest is charged, while the student is in school at least half-time, during grace and deferment period.   If for any reason a parent is denied the PLUS loan, the student is eligible for up to an additional $4,000 in the Direct Unsubsidized Stafford Loan.  For information on how to apply for a Federal Direct PLUS Loan, refer to the Federal Direct PLUS Loan Process.

What fees, if any, are associated with these loans?
For Student Loans, an origination fee of 1.051% of the total loan will be assessed will automatically be deducted. For PLUS loans, an origination fee of 4.204% will be assessed and automatically deducted. The net disbursement will reflect these fees; therefore, the amount credited to the student’s account will be less than the loan amount. This fee is determined by the U.S. Department of Education.

How do I apply for a Federal Direct Student loan?
Federal Direct Student Loan Process
Federal Direct Loans offers long term, low-interest loans for students and parents to help pay for the cost of a student’s education. The lender is the U.S. Department of Education rather than a bank. To qualify to the Federal Direct Loans, you must be enrolled in at least 6 credits and maintain a 2.00 cumulative GPA. 

Step 1: All students who wish to borrow a Federal Direct Student Loan must first complete a Free Application for Federal Student Aid (FAFSA - www.fafsa.gov). If applicants determine that they need additional funding, they may complete and submit a Federal Direct Loan Request Form to the Financial Aid Department.

Step 2: First time Direct Loan borrowers only must complete a Federal Student Loan Entrance Counseling Session in accordance with federal regulations. Sign in to: www.StudentLoans.gov and click on "Complete Entrance Counseling".

Step 3: First time Direct Loan borrowers only must complete a Direct Loan Master Promissory Note (MPN) at www.StudentLoans.gov. Borrowers will need their FAFSA Personal Identification Number (PIN) in order to complete the MPN. If you do not have a PIN or cannot recall it, you can request your PIN at www.pin.ed.gov.
Important Note in both Step 2 and Step 3:
Select "New Jersey" as the School State and "Union County College" as the school name.

Step 4Monitor the status of your loan by checking your Owl’s Nest account and your Union County College email account.
 
Federal Direct PLUS Loan Process
This loan is a credit-based, unsubsidized loan for the parents of dependent undergraduate students. Although not a need-based loan, a Federal Direct PLUS Loan requires a student to complete the FAFSA. During the application process, the parent of the student must complete a credit check and a Master Promissory Note. The student must be enrolled at least half-time in a degree-seeking program. A parent can borrow up to the student’s remaining Cost of Attendance, less all other financial assistance received. Interest is charged during all periods, starting on the date which the loan is disbursed. Direct PLUS Loans do not have a grace period. The repayment begins as soon as the loan is fully disbursed, but a parent may defer repayment while the student is enrolled at least half time and for an additional six months after they drop below half time.

To Start the Loan Process:

Step 1: Visit StudentLoans.gov and sign in using the parent’s (parent(s) of the student enrolled at Union County College) information.

Step 2: Select the Request a PLUS option and select the Parent PLUS loan type.

Step 3:
Follow the instructions to complete  the steps (Steps 1 to 4), and a credit check will be conducted during Step 4.

*Note:
A result of your credit check will be presented to you on the screen as well as emailed to your email address on file with the U.S. Department of Education. If your credit check is approved, electronic confirmations of your credit decision and Direct PLUS Loan application will be sent to Union County College Financial Aid Office.

Step 4: The parent of the student must complete Master Promissory Note (MPN) for the PLUS loan before the funds from the Direct PLUS Loan can disburse to the student’s account.

Step 5: Students must complete and submit a Loan Request Form to Union County College Financial Aid Office for the Direct PLUS Loan to be awarded to the student’s account.
Request an Additional Unsubsidized Stafford Loan
If the parent is prohibited from borrowing through the Federal Direct PLUS Loan program, the Dependent student can request an additional Unsubsidized Federal Stafford Loan. The student can be awarded up to the maximums provided for independent undergraduate students (up to $4,000 for freshman and sophomores per academic year).
 
Request an Additional Unsubsidized Stafford Loan
If the parent is prohibited from borrowing through the Federal Direct PLUS Loan program, the Dependent student can request an additional Unsubsidized Federal Stafford Loan. The student can be awarded up to the maximums provided for independent undergraduate students (up to $4,000 for freshman and sophomores per academic year).

Where can I learn more about the various federal student loan programs?
To learn more about the various federal student loan programs and about debt management visit:
www.studentaid.ed.gov
www.StudentLoans.gov
www.nslds.ed.gov
- Watch Financial Aid TV (FATV)

Loans are sources of financial assistance that allow you to spread the cost of education over time. Loans are serious legal obligations. Loans must be repaid. We urge all first-time borrowers to spend some extra time learning about the loan process so that they can make informed choices throughout their education.

Federal Direct Stafford Loans are established and supported by the federal government and the Department of Education serves as the lender. You must also remain enrolled in at least 6 credit hours required for your program each term. Please note: Union County College reserves the right to refuse to certify additional student loans if there is any indication you may be unwilling to repay your loan, if you have high existing loan balances or if you have ever defaulted on a prior student loan that you did not repay in full, or if your cumulative GPA is below is 2.00.
 
When do you begin repayment of your loan?
Direct Subsidized and Unsubsidized Loans have a 6-months grace period that starts the day after you graduate, leave school, or drop below half-time enrollment. You don't have to begin making payments until your grace period ends.
Direct PLUS Loan repayment begins 60 days after the last installment of the loan for that school year is made; however, there is the option to defer repayment of a Direct PLUS Loan.

How much will you pay the loan each month?
Repayment usually ranged 20 to 25 years, depending on the repayment plan that you choose with Direct Loans. Your monthly payment is determined on the total amount borrowed and how long it will take you to pay the loan in full.
There are several plans to choose for repayment, which can be changed at any time.
 

 

Repayment Plans

Plans

Pay-off Time

Type of Payment

Other requirements

Standard

Up to 10 years

Fixed Monthly Payments

Graduated

Up to 10 years

Payments are gradually increased every 2 years

Extended

Up to 25 years

Fixed or graduated monthly payment

Loan debt must be <$30,000 and outstanding balance

Income-Contingent

Up to 25 years

Payments are adjusted each year based on annual income, family size, and total amount of loan

After 25 years of repayment, unpaid amount will be forgiven. Not available for Direct Plus Loan

Income-Based

Up to 25 years

Payments are capped based on annual and family size

After 25 year of repayment, unpaid amount will be forgiven. Not applicable for Direct PLUS

 
Can a loan be postponed?
In some case, you may receive a deferment or forbearance that allows you to temporarily stop or lower your payment if you are encountering difficulty paying your loan. To find out if you qualify for deferment or forbearance, you should refer to your MPN or www.studentloans.gov

Can I cancel my loan?
You are allowed to cancel your loan anytime before the loan is disbursed or 14 days after disbursement. Keep in mind that you agreed to repay the loan when you sign your MPN. In some circumstances, your loan can be discharged or forgiven after disbursement has occurred. You may visit www.studentaid.ed.gov to inquire more information about discharging or forgiveness of your student loans.
Private alternative loan programs have grown in popularity in recent years. However, we firmly believe that families should exhaust their eligibility for all federal loan programs before turning to this resource.

Private educational loan definition
A private educational loan is a non-federal educational loan, through a private lending institution, typically issued in the student's name. Each lender has different eligibility requirements (e.g., degree status, enrollment status, and U.S. citizenship status), loan rates, repayment terms, and conditions. Some lenders may also require payment of interest while students are in school.

Options to consider before borrowing a private loan
Before choosing a private educational loan, please consider if Union County College payment plan fits your financing needs. In almost all cases, Direct Loans will provide the consumer with more beneficial terms and conditions, including a lower annual percentage rate charged on the principal and fewer and lower fees. Families are free to choose any lender which best serves their needs. You should visit each potential lender's web site to fully evaluate the benefits that they offer before making a final choice of a lender for your loans. 
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