Student Loans (must be repaid)
Federal Direct Subsidized Loans and Federal Direct Unsubsidized Loans are federal student loans offered by the U.S. Department of Education (ED) to help eligible students cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school.
Direct Subsidized Loans
Who can get Federal Direct Subsidized Loans?
Direct Subsidized Loans are available to undergraduate students with financial need.
How much can you borrow?
Your school determines the amount you can borrow, and the amount may not exceed your financial need.
Who will pay the interest?
The U.S. Department of Education pays the interest on a Direct Subsidized Loan
- while you’re in school at least half-time,
- for the first six months after you leave school (referred to as a grace period), and
- during a period of deferment (a postponement of loan payments).
Direct Federal Unsubsidized Loans
Who can get Federal Direct Unsubsidized Loans?
Federal Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need.
How much can you borrow?
Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive.
Who will pay the interest?
You are responsible for paying the interest on a Federal Direct Unsubsidized Loan during all periods.
Federal Parent PLUS Loans
Federal Parent PLUS loans are financed by the United States Department of Education (your lender). While the Department of Education is your lender, the Department will assign a Servicer to handle your loan servicing needs; for more information, go to StudentAid.ed.gov.
To receive a Federal Parent PLUS loan you must:
- Be the biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time in an eligible degree seeking program
- Not have adverse credit history, unless if you can meet certain additional requirements such as
- Obtaining an Endorser
- Documenting Extenuating circumstances
- Meet the general eligibility requirements for Federal Student aid including but not limited to
- US Citizen or Eligible Non-Citizen
- Have a valid SSN
- Complete the Parent PLUS Application
- If you have your credit locked, you will need to unlock it prior to completing the application
- Your student must complete the FAFSA for the current Award year
- You must complete a PLUS Master Promissory Note (MPN) if approved
- If you borrow for multiple student's, each student must have their own PLUS MPN
- If you are approved with an Endorser, you must complete PLUS Credit Counseling before you can receive the loan
Alternative Loans
For some students, alternative loans provide that additional funding needed to meet educational costs. While federal student loans should always be offered to students first, there are times when students may either need to pursue alternative loans due to exhausting their federal loan eligibility or costs exceed what federal and/or other aid can cover. A good resource to learn more about private loans is available at Federal Versus Private Loans.
Requirements
Each lender sets their own requirements for Private Student Loans. We advise that the student contact their lender to confirm the requirements of their specific Private loan.
Be advised that you, the student, are responsible for any additional requirements set forth by the alternative/private loan company such as signing a promissory note to repay the loan or any other possible co-signer requirements.
Preferred Lender List
CMC does not offer or suggest any preferred lenders. We encourage students to examine interest rates, any fees and if the lender allows for in-school deferment of repayment and for how long. These and other factors and help you select the loan that is best for you.
Disbursement Policy
How the Loans Are Disbursed (Paid Out)
Generally, your loan will cover a full academic year and CMC will make at least two disbursements to you. For example, with a Fall/Spring loan you will get 1 disbursement in Fall and 1 disbursement in Spring. If you have a 1 semester loan you will get that loan paid to you in 2 even disbursements during the semester. If this is your first time taking out a Direct Loan, you will need to wait 30 days into the start of the semester to see your first disbursement.
In most cases, CMC will disburse your loan money by crediting it to your school account to pay (tuition and fees, room and board, and other authorized charges). If the loan disbursement amount exceeds your school charges, CMC will pay you the remaining balance of the disbursement directly by check or other means.
Entrance Counseling
Except for Direct PLUS Loan borrowers, if you haven’t previously received a Direct Loan, you must complete the CMC specific Entrance Counseling before we can make the first disbursement of your loan. This helps you to understand your responsibilities regarding your loan.
NOTE: If you completed Entrance Counseling at a different school, CMC highly recommends that you complete it again using the CMC school code, 004506.
Student Loan Acknowledgement
While not required, CMC highly recommends completing the Annual Student Loan Acknowledgement on a yearly basis before accepting loans. This will give you an idea of how much you owe and how much more you can borrow.
The Master Promissory Note
To take out a Direct Loan for the first time, you must complete a MASTER PROMISSORY NOTE (MPN). Complete the MPN online. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of your loan(s).
To complete an MPN online, you will be required to use your Department of Education-issued FSA ID. If you do not have an FSA ID, you may request one from the official site. A parent borrower must also request an FSA ID when completing a PLUS MPN. This is the same FSA ID that you used to complete your FAFSA.
In most cases, once you’ve submitted the MPN and it’s been accepted, you won’t have to fill out a new MPN for future loans you receive. You can borrow additional Direct Loans on a single MPN for up to 10 years. You should, however, ensure that you maintain this document in a safe location.
You’ll receive a disclosure statement from the Department that gives you specific information about any loan that CMC plans to disburse under your MPN, including the loan amount, fees, and the expected disbursement dates and amounts.
| Program Facts | Direct Subsidized | Direct Unsubsidized | Parent PLUS |
|---|---|---|---|
| Who can borrow? | Dependent and independent undergraduate | Dependent and independent undergraduate, graduate and professional students. | Credit-eligible parents of dependent undergraduate students. |
| Eligibility | Students attending school on at least a half-time basis. Students must demonstrate need by filing a Free Application for Federal Student Aid (FAFSA). | Students attending school on at least a half-time basis. Students do not need to demonstrate need; however, all students must first be considered for a subsidized loan. Completion of the FAFSA. | Dependent students attending school on at least a half-time basis. Completion of the FAFSA. |
| Loan Limits (based on annual limits) |
Year / Amount 1 / $3,500 |
Year / Dependent / Independent 1 / $5,500 / $9,500 |
A parent may borrow up to the cost of attendance, less other financial aid received. |
| How do I calculate the amount I borrow? |
Cost of Attendance = Subsidized Direct Loan |
Cost of Attendance = Unsubsidized Stafford Loan |
Cost of Attendance = Federal PLUS Loan |
| How is the interest paid while in school? | Interest is paid by the Federal Government while the eligible student remains in school at least half-time. | Interest is the student's responsibility while in school, from the first disbursement date to the start of repayment. | Interest is paid as part of the monthly repayment schedule. |
| What is the interest rate? | Fixed 6.53% (after 7/1/24 and before 07/1/25) |
Fixed 8.08% (after 7/1/24 and before 07/1/25) |
Fixed 9.08% (after 7/1/24 and before 07/1/25) |
| When does repayment begin? | Six months after the student leaves school or drops below half-time status, whichever comes first. | Six months after the student leaves school or drops below half-time status, whichever comes first. | Within 60 days after the final loan disbursement. |
| Are there any fees? | 1.057% of the total loan deducted proportionately from each disbursement. (after 10/1/20 and before 10/1/24) | 1.057% of the total loan deducted proportionately from each disbursement. (after 10/1/20 and before 10/1/24) | 4.228% of the total loan deducted proportionately from each disbursement. (after 10/1/20 and before 10/1/24) |
Caution: Some information may change as the US Department of Education continues to issue new regulations. Stay in contact with the Office of Financial Aid.
Direct Loan and PLUS Repayment Calculators and Comparisons are available at the Direct Loan website and Federal Student Aid websites.
You are obligated to repay your loan even if:
- You do not complete your educational program
- You are not satisfied with the education or other services you purchased from a school
- You cannot find employment (although you may apply to defer payment for a specified time).
- When You Graduate or Leave School
Leaving School: Graduating, Withdrawing, or Dropping Below Half-Time
Once you are no longer enrolled at least half time in an eligible program, you’ll receive a 6-month grace period (see below) on your Direct Subsidized and Unsubsidized Loans during which you are not required to make loan payments. You must begin repayment at the end of your grace period. You will need to complete Exit Counseling each time you graduate, withdraw or drop below half time. We encourage all borrowers to complete this through the FSA online counseling. If you are unable to complete it online you can view the Exit Counseling PDF.
Choosing a Repayment Plan
You’ll have the choice of several plans. Your Direct Loan Servicer will notify you of the date your first payment is due. If you do not choose a repayment plan, you will be placed on the Standard Repayment Plan. Most Direct Loan borrowers choose to stay with the Standard Repayment Plan, but there are other options for borrowers who may need more time to repay or who need to make lower payments at the beginning of the repayment period. You can visit Federal Student Aid / Manage Loans for more information regarding repayment.
Grace Periods
When you graduate, drop below half-time, or withdraw from your academic program, you will receive a six-month grace period for your Direct Subsidized and Unsubsidized Loans. Your grace period begins the day after you stop attending school on at least a half-time basis. Once your grace period ends, you must begin repaying your loan(s).
If you re-enroll in school at least half time before the end of your 6-month grace period, you will receive the full 6-month grace period again when you stop attending school or drop below half-time enrollment.
There is no grace period for Direct PLUS Loans—the repayment period for each Direct PLUS Loan you receive begins 60 days after your school makes the last disbursement of the loan. If you’re a parent PLUS borrower, you can defer repayment of Direct PLUS Loans first disbursed on or after July 1, 2008, while the student for whom you obtained the loan is enrolled at least half time, and for an additional 6 months after the student graduates or drops below half-time enrollment by contacting your loan servicer.
Remember, if you choose to defer payment on a Direct PLUS Loan, any interest that accumulates during the deferment period will be added to the unpaid principal amount of your loan. This is called “capitalization,” and it increases your debt because you’ll have to pay interest on this higher principal balance.
In-School Deferment
If you have an in-school deferment on a Direct Subsidized or Unsubsidized Loan that entered repayment at an earlier date before you returned to school and you graduate, drop below half-time enrollment, or withdraw from school, you will be required to immediately begin making payments on the loan because the 6-month grace period has already been used up; there is no second grace period.
Make sure that both your school and the Direct Loan Servicing Center know that you are no longer enrolled. If you don’t begin making payments when required, there is the possibility that you will lose repayment incentives you may have received or even go into default.
You must complete Exit Counseling when you graduate, withdraw, or drop below 1/2 time enrollment. Exit counseling is completed online through the Department of Education. If you have additional questions about Exit Counseling see this helpful handout.
Reservists Called to Active Duty
If you are called or ordered to active duty for more than 30 days from a reserve component of the U.S. Armed Forces, the period of your active duty service and the time necessary for you to re-enroll in school after your active duty ends are not counted as part of your grace period. However, the total period that is excluded from your grace period may not exceed three years. If the call or order to active duty occurs while you are in school and requires you to drop below half-time enrollment, the start of your grace period will be delayed until after the end of the excluded period. If the call or order to active duty occurs during your grace period, you will receive a full 6-month grace period at the end of the excluded period.
If you are a reservist called to active duty with the U.S. Armed Forces for more than 30 days, contact your loan servicer. You may view your loan servicer by logging into the National Student Loan Service Center.
Consolidation
If you have multiple federal education loans, you can consolidate them into a single Direct Consolidation Loan. This may simplify repayment if you are currently making separate loan payments to different loan holders, as you’ll only have one monthly payment to make. There may be tradeoffs, however, so you’ll want to learn about the advantages and possible disadvantages of consolidation before you consolidate.
A Direct Consolidation Loan allows you to consolidate (combine) one or more federal education loans into a new Direct Consolidation Loan for the purpose of lowering your monthly payment amount or gaining access to federal forgiveness programs.
There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan.
To ask questions about consolidating your loans before you apply for a Direct Consolidation Loan, contact the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
Eligibility
Most federal student loans—including Direct Loans and FFEL Program Loans—are eligible for consolidation.
Am I eligible for loan consolidation while I am confined in an adult correctional facility or a juvenile justice facility?
No. You may not consolidate your federal student loans into a new federal consolidation loan until after you’re released.
When can I consolidate my loans?
Generally, you're eligible to consolidate after you graduate, leave school, or drop below half-time enrollment.
The loans you consolidate must be in repayment or in a grace period.
Can I consolidate an existing consolidation loan?
Generally, you can’t consolidate an existing consolidation loan unless you include an additional eligible loan in the consolidation.
How to Apply
Apply for a Direct Consolidation Loan. You can complete and submit the application online or by U.S. mail. Most people complete the online application in less than 30 minutes. For submissions by mail, visit the link above and look for “Don't want to use the electronic application?”
After you submit your application, a loan servicer will manage the consolidation process. At this point in the process, this servicer will be your point of contact for any questions you may have about your consolidation application.
This servicer may be different from the one you selected on your consolidation application. If so, don’t worry—you’ll ultimately be working with the servicer you selected once the consolidation is complete.
Unless the loans you want to consolidate are in a deferment, forbearance, or grace period, it’s important for you to continue making payments on those loans until your consolidation servicer tells you that they have been paid off by your new Direct Consolidation Loan.
When you miss a student loan payment there are consequences.
- Day 1 of a missed payment you become delinquent
- Day 90 your delinquency is reported to the credit bureaus
- Day 270 you loan goes into default
Consequences of loan default:
- The entire unpaid balance of your loan and any interest you owe becomes immediately due (this is called "acceleration").
- Your tax refunds and federal benefit payments may be withheld and applied toward repayment of your defaulted loan (this is called “Treasury offset”).
- Your wages may be garnished. This means your employer may be required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan.
- You can no longer receive deferment or forbearance, and you lose eligibility for other benefits, such as the ability to choose a repayment plan.
- You lose eligibility for additional federal student aid such as Federal Pell Grants and student loans.
- The default is reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card.
- It may take years to reestablish a good credit record.
- You may not be able to purchase or sell assets such as real estate.
- Your loan holder can take you to court.
- You may be charged court costs, collection fees, attorney’s fees, and other costs associated with the collection process.
If you become delinquent or are in default contact your loan servicer for help
