Financial Aid Policies Handbook
Loans
Federal Loans may be available to all students who file a FAFSA. These loans include the Federal Direct Stafford Loan.
We discuss the main student loan program in this section: the Federal Direct Stafford loan program. We encourage students to borrow only what is necessary. Our financial aid plan designed to maintain student borrowing at levels manageable after graduation. The Federal Direct Stafford limits are shown below. We also include information about the Federal Direct PLUS Loan for parents. The Federal Direct Stafford and PLUS loan programs require a student to be enrolled at least half time.
Federal Stafford Loan (Subsidized and Unsubsidized)
Direct Loan Program for first time borrowers
Limits: Annual Stafford loan limits are $3,500 for a freshman, $4,500 for a sophomore and $5,500 for a junior or senior. Interest on these loans may be subsidized by the government based on the cost of education, the family contribution and other aid received. Students may borrow an additional $2,000 Unsubsidized Stafford in addition to the annual limits to total $5,500 for a freshman, $6,500 for a sophomore and $7,500 for a junior or senior.
The federal government pays the interest on the subsidized loan while the student is in college at least half time and for six months after graduation. The repayment period is ten to twenty five years depending on the repayment plan that you choose. A minimum monthly payment of $50 is required. However, the actual amount of the payment is dependent on the total debt. Loan fees apply and will be deducted from the loan disbursement amount.
The unsubsidized Federal Direct Stafford Loan is available for those who do not qualify for a subsidized loan. The interest on the unsubsidized Federal Direct Stafford Loan begins to accrue immediately. Students can make the interest payments monthly or quarterly, or choose to have the interest deferred and added to the principal of the loan, which is called capitalization. If the student chooses to defer interest payments until after college, they will be capitalized, and interest is paid on the interest when it is added to the loan. Otherwise, the repayment requirements are the same as a subsidized Stafford Loan.
A student may be eligible for an unsubsidized portion of Stafford Loan beyond any subsidized portion up to the yearly maximum. The student may be eligible to borrow an additional unsubsidized Stafford Loan upon confirmation that the parent is ineligible to borrow a PLUS loan (see Parent Loans below).
Eligibility: The subsidized amount a student can borrow is limited to the difference between the cost of attendance and the sum of the expected federal contribution and any other financial aid received. For those without subsidized eligibility, the unsubsidized eligibility is the difference in the cost of attendance and any financial aid received. The Federal Direct Stafford Loan shown on your award letter is the amount we recommend that the student borrow to help finance their education.
Applying for the Federal Direct Stafford Loan
For entering students or other first-time borrowers. The financial aid office will initiate processing the loan through the Federal Direct Stafford loan program when the student accepts their award in their financial aid portal or on their CC Basecamp portal. The student must also complete the necessary steps for us to process the award. Click here for more information on the application process.
Entrance Counseling. In compliance with federal requirements, students who are borrowing for the first time at Colorado College must also complete an Entrance Loan Counseling session before the funds can be credited to their account. Students should go to Federal Student Loans Website for information about completing this Online Stafford Direct Loan Entrance Counseling Session. (Step 1).
Master Promissory Note (MPN). Under federal regulations, students must complete a Master Promissory Note for Federal Direct Stafford Loans. The Master Promissory Note enables the student to sign only one promissory note for all Stafford Loans while at Colorado College. Click here for more information about filling out the Master Promissory Note (Step 2).
Disbursement of Loan Funds. In most cases the loan proceeds will be payable in two installments. The second payment usually occurs at the beginning of the second semester for full academic-year loans. For students to determine the actual amount of funds they will receive from the Stafford Loan, it is necessary to subtract the loan origination fees from the amount borrowed. Loan fees are added to the overall cost of attendance when applying for the loan. However, it is institutional policy that loan fees are not funded with CC grant or scholarship dollars.
After the student is registered and enrolled, funds will be disbursed electronically directly to the student's account.
Students who have already borrowed a Stafford Loan. We will award a Federal Stafford Loan in the future. Unless the student indicates otherwise, we will process the Stafford Loan award amount.
Deferments, Discharges, Cancellations. Periods during which payment of principal on a Federal Direct Stafford Loan is postponed are called deferments. Deferments include periods of at least half-time enrollment in a degree-seeking program, study on an eligible graduate fellowship, and approved rehabilitation training programs for disabled individuals. Limited loan forgiveness is available for full-time teachers in designated schools, and others. Additional information on these topics is available in "The Student Guide" to federal financial aid at http://studentaid.ed.gov/resources
Federal Direct Stafford Loan Limits for Independent Students and for Dependent Students Whose Parents are Ineligible to Borrow a PLUS Loan. Students who are considered independent from parental support by federal regulations, and students whose parents are ineligible to borrow a Federal PLUS loan (see PLUS Loan section) may be eligible to borrow up to the maximum loan limits defined below.
$9,500 is the first-year limit: $5,500 initial limit and up to $4,000 in additional unsubsidized loan
$10,500 is the second-year limit: $6,500 initial limit and up to $4,000 in additional unsubsidized loan
$12,500 is the annual limit for third and four year students: $7,500 limit per year for subsequent undergraduate study and up to $5,000 in additional unsubsidized loan
Federal PLUS Loan - Parent Loan
In order to comply with federal loan eligibility requirements, the student must file the FAFSA even if they are interested only in the PLUS loan. This federal loan is available to help parents of dependent students obtain additional funds to help finance educational costs. Many parents use this loan to finance their calculated Expected Parent Contribution. The current interest rate is 6.31% and the origination fee is 4.276% and will be deducted from the loan disbursement.
Eligibility. A parent with an adverse credit history, according to criteria established by federal regulations, will be unable to borrow on behalf of the student. In case of denial of Direct Plus Loan a student may receive additional Direct Unsubsidized Stafford funding. (Please contact Financial Aid Office for further assistance and other options.)
Repayment. Repayment of a Direct Plus Loan begins 60 days after the full amount you've borrowed for a school year has been disbursed. This means that you generally must begin repayment while your child is still in school. For Direct PLUS Loans with a first disbursement date that is on or after July 1, 2008, you may request that repayment be delayed while your child is enrolled at least half-time and during the six month period after your child graduates or is no longer enrolled at least half-time. If you would like to postpone repayment of your PLUS Loan based on your child's enrollment status, you must contact the Direct Loan Servicing Center.
Disbursement. The loan will usually be disbursed in two equal payments during an enrollment period. For the regular academic year, half would be disbursed in the fall and the other half in the spring. Electronic Fund Transfer (EFT) disbursements are credited automatically to the student's account.
If the Federal Plus Loan, when considered alone, exceeds total allowable charges (tuition, room and meal plan), the parent-borrower will be issued a refund check within 14 days after the Title IV funds are applied to the student account. In the case of separated or divorced parents, any refunds calculated under the above-indicated methodology will be made only to the parent-borrower. If both parents have taken Plus Loans on behalf of their student, any calculated parent-borrow refund will be pro-rated between the parents based upon the proceeds of their respective loans that were applied to the student's account.
If the Federal Plus Loan, when considered alone, does not exceed the total allowable charges, the parent-borrower is NOT entitled to a refund. Rather, the student-borrower will be issued a refund check within 14 days after the Title IV funds are applied to the student account, unless the student requests in writing that the credit balance be released to a parent.
How to apply for a Federal Direct Parent PLUS Loan: Application steps are available here.
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