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On March 30, 2010, President Obama signed the Health Care and Education Reconciliation Act of 2010 (HCERA) (Public Law 111-152) that makes significant changes to the Federal student aid programs authorized by Title IV of the Higher Education Act (HEA) of 1965. The HCERA eliminates the authority for lenders to make new loans under the Federal Family Education Loan (FFEL) Program after June 30, 2010. Therefore, beginning July 1, 2010, all new subsidized and unsubsidized Stafford Loans made to Folsom Lake College student borrowers can only be made under the William D. Ford Federal Direct Loan Program. This means that students will no longer select a bank lender for their Stafford Loan, as the federal government will be the lender instead of a bank. This change will have minimal impact on the loan process. As in the past, all students requesting a student loan will be required to attend a Loan Entrance Counseling Workshop for 2010-2011 for detailed instructions on completing the loan application.
On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Public Law 112-141) was enacted. MAP-21 added a new provision to the Direct Loan statutory requirements (see HEA section 455(q)) that limits a first-time borrower's eligibility for Direct Subsidized Loans to a period not to exceed 150 percent of the length of the borrower's educational program. Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150 percent limit to lose the interest subsidy on their Direct Subsidized Loans. Note: Only first-time borrowers on or after July 1, 2013 are subject to the new provision. Generally, a first-time borrower is one who did not have an outstanding balance of principal or interest on a Direct Loan or on a FFEL Program Loan on July 1, 2013.
The Direct Loan Program offers the following types of loans:
Subsidized: Subsidized Direct Loans are available for students with demonstrated financial need, as determined by federal regulations. The federal government pays the interest on the loan while you are enrolled in school at least half-time (6 units) and during the grace period before repayment begins. Regular monthly payments begin six months after you graduate, drop below half-time (6 units) or withdraw from school.
Unsubsidized: Unsubsidized Direct Loans are available to all qualified students at participating schools, regardless of their income. You must meet the same requirements as those for subsidized loans, except you don't have to demonstrate financial need. The Unsubsidized Direct loan plus all other financial aid cannot exceed the cost of attendance. Interest accrues from the time the loan is disbursed, and interest payments begin immediately but can be deferred. It is to your advantage, of course, to pay the interest while in school. This way, the debt will be the principal amount only when repayment begins. Regular monthly payments begin six months after you graduate, drop below half-time (6 units) or withdraw from school.
To be eligible for a Direct Loan at Folsom Lake College (FLC), you must meet all the eligibility requirements for federal student aid. In addition, you must:
Be in good standing and maintain a cumulative 2.0 FLC GPA
Ensure your financial aid file is complete
Be enrolled in six units during the entire school year for which loan has been borrowed.
Note: If you drop below six units, your second loan disbursement check will be canceled.
What is National Student Loan Data System (NSLDS)?
NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data. Please refer to the NSLDS flyer for details.
What is a Master Promissory Note?
When you apply for a loan, you must sign a Master Promissory Note (MPN). The MPN is quite simply, a legally binding promise to repay your loan.
Certified Loan Procedure:
Once your loan has been certified, you will receive an email to sign your MPN (if you have not already signed one in the prior award year. Upon receipt of an electronically signed MPN, your loan will be disbursed and you will receive a loan award letter from Folsom Lake College.
Your loan award letter will indicate the date your loan(s) will be disbursed. Disbursements will be made using the refund preference you selected when you activated your Higher one Debit card.
Exit Counseling Guide:
Click here for the Exit Counseling Guide that will help you understand your rights and responsibilities under the Federal Student Loan program, track your federal student loans on the web, and understand the importance of repaying your student loan on time.
Note: You are required to complete a mandatory loan exit counseling session at www.studentloans.gov upon withdrawing, dropping to less than half-time, or transferring from Folsom Lake College.