Parents of dependent students may apply for the Parent Plus loan. To be eligible, the student must first have completed the FAFSA application at Amarillo College. Federal law requires the Department of Education to perform a credit check before approving a PLUS loan. A pre-approval from the Department of Education must be sent to the college before the PLUS loan will be originated by the Financial Aid Office.
All guaranteed student loans at Amarillo College will be processed through the Federal Direct Loan program. Under this program, all guaranteed student loans will be funded by the Department of Education.
The Department of Education establishes an annual maximum loan limit for Direct loans.
Currently the following maximum limits are:
Students: First Year - $5500 (no more than $3500 may be subsidized)
Second year - $6500 (no more than $4500 may be subsidized)
Students: First year - $9500 (no more than $3500 may be subsidized)
Second year - $10,500 (no more than $4500 may be subsidized)
For loan limit requirements, students with less than 30 credit hours completed toward their current active degree plan will be classified as first year. Students with 30 or more credit hours completed toward their current active degree plan will be classified as second year.
Students at AC may not be eligible to receive the maximum annual loan limit during the academic year. Students’ loan awards may not exceed the student’s cost of attendance minus any financial aid awarded minus other resources (for example, assistance received from the WIA program, DARS, or other outside resource such as scholarships).
The Department of Education also establishes an
Currently the following aggregate limits are:
The Department of Education charges a 1.066% origination fee for all subsidized and unsubsidized Direct loans. Students who wish to apply for a Direct loan at AC must submit a loan request through AC Connect. Go to Current Student, Financial Aid, Financial Aid Checklist, and click the Financial Aid tab. You will see an option to 'Request a new loan'. Direct Loans will not be considered until all other aid has been determined. Loans are awarded for the academic year. To qualify for Direct loan funds, students must complete the FAFSA process, be enrolled at least 6 degree required hours, be meeting the terms of the Satisfactory Academic Progress policy and not currently have a guaranteed student loan in default.
You will receive a Loan Disclosure notice for each Direct Loan you borrow. The Loan Disclosure notice from your loan servicer contains information about interest rates, origination fees and loan repayment dates. The notice also includes the name, address, and phone number of your loan servicer. It is your responsibility to notify your loan servicer when you move, change your mailing address, email address, or phone number.
If you have not previously received a Direct Loan or Federal Family Education Loan (FFEL), the Federal Government requires you to complete entrance counseling to ensure that you understand the responsibilities and obligations you are assuming. Entrance Counseling will be completed at www.StudentLoans.gov. You will need your FAFSA pin to log-in. During the counseling session, you will receive information on understanding your student loans, managing your spending, plans for repayment, avoiding default, and making your finances a priority. This counseling has been developed by the Department of Education to help you improve your money management skills.
Your loans remain on in-school deferment as long as you enroll in at least half time hours; half time enrollment status at AC is 6 credit hours. While on in-school deferment, you are not required to make payments on your loan. Your loan servicer will be notified of your enrollment after the census date of the semester. If you need to obtain Enrollment Verification, please log into AC Connect, look under the Self Service block, click on "Current Student", "Academic Profile" and "Enrollment Verification". After graduating or dropping below half time enrollment status, your loan(s) will begin their grace period.
Students who have borrowed under the Direct Loan Program must complete Exit Counseling during their final semester when graduating or when withdrawing from classes. The U.S. Department of Education wants to insure that you review the terms of your loan and understand your rights and responsibilities under this program as you enter repayment. To complete the Exit Counseling requirements, go to www.StudentLoans.gov; under the "tools and resources" column, click on "exit counseling" to begin the process.
Each loan will have a 6 month grace period. During your grace period, you should receive additional correspondence from your loan servicer concerning the due date of your payments, and the payment amount that must be repaid each month. There is no penalty for repaying your loan early or for making larger payments than what is required. By paying early and often, you will save yourself money by paying less interest on the loan(s). Once the grace period has expired, your loan(s) will go into a repayment status. Depending on the number of loans you have borrowed, you may have more than one loan servicer. To complete a Financial Aid review of your loans and to obtain contact information for your servicers, go to www.nslds.ed.gov or www.studentloans.gov.
The Federal Direct Loan Program offers several repayment plans that are designed to meet the different needs of individual borrowers. These plans include:
With the standard plan, you'll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you'll have up to 10 years to repay your loans.
To be eligible for the extended plan, you must have more than $30,000 in Direct Loan debt. Under the extended plan you have 25 years for repayment and two payment options: fixed or graduated. Fixed payments are the same amount each month, as with the standard plan, while graduated payments start low and increase every two years, as with the graduated plan below.
With this plan your payments start out low and increase every two years. The length of your repayment period will be up to ten years. If you expect your income to increase steadily over time, this plan may be right for you. Your monthly payment will never be less than the amount of interest that accrues between payments.
This repayment option is available if you have a partial financial hardship. However only Direct Subsidized and Unsubsidized loans disbursed after October 1, 2011 qualify for this repayment option. PLUS loans and guaranteed student loans disbursed under the Federal Family Education loan program (Stafford loans) do not qualify. Your payments under this program are limited to 10% of your discretionary income. You would need to contact your loan servicer for the application form.
This plan gives you the flexibility to meet your Direct Loan obligations without causing undue financial hardship. Each year, your monthly payments will be calculated on the basis of your adjusted gross income (AGI, plus your spouse's income if you're married), family size, and the total amount of your Direct Loans.
Under this plan the required monthly payment will be based on your income during any period when you have a partial financial hardship. Your monthly payment may be adjusted annually. The maximum repayment period under this plan may exceed 10 years. If you meet certain requirements over a specified period of time, you may qualify for cancellation of any outstanding balance of your loans. Payments under this option may be as low as $0 in some circumstances. This repayment option is available for both Stafford and Direct loans. The Project on Student Loan Debt has unveiled a new web-based resource, IBRinfo.org to help interested borrowers find out more information about this program.
Students who have several student loans may want to consolidate their loans. This will enable the student to only have a single payment to make each month. Consolidation may result in a lower monthly payment. Consolidation may increase the total amount of interest you will be paying over the life of the consolidation loan, since the repayment period is generally extended. However, you may choose to make larger payments on the consolidation loan, which will reduce your overall interest charges. On the web at www.finaid.org, you will find a series of calculators which will let you estimate your monthly payments under the loan consolidation program versus all other repayment plan options. If you are interested in more information on loan consolidation, contact the Direct Loan Consolidation Center at 1-800-557-7392, or on the web at www.studentloans.gov.
If you are having problems making your loan payments due to unemployment, disability, military deployments, or other life changing events, you should contact your loan servicer to inquire about deferment or forbearance options.
A deferment is a postponement of payment on a loan, during which, interest does not accrue if the loan is subsidized.
You may qualify for a deferment while you are:
In most cases, you need to submit a deferment request to your loan servicer along with documentation of your eligibility for the deferment.
If you can't make your scheduled loan payments, but don't qualify for a deferment, your loan servicer may be able to give you a forbearance. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments. Some common reasons for getting a forbearance are illness, financial hardship, or serving in a medical or dental internship or residency. You may need to submit a forbearance request to your loan servicer along with documentation of your eligibility for a forbearance.
If you are in default on your loan, you are not eligible for a deferment or forbearance.
The consequences of default are severe. Unless you are in an approved deferment or forbearance, failure to make payments on your student loan will result in default. The lender or agency that holds your loan, the state and/or the federal government will take legal action to recover the money you owe, including:
PLUS loans (parents borrowing to pay for their dependent child’s education expenses) do not have a pre-established maximum amount. However, at no time will the PLUS loan exceed the student’s cost of attendance less any financial aid received. PLUS loans are credit based. AC requires the student to have a completed FAFSA on file, and the parent to complete the pre-approval process prior to processing a PLUS loan.
Parents may complete the PLUS process with the Department of Education at www.studentloans.gov. Parents will need to have their Department of Education FAFSA PIN for loan processing. During this process, the Department of Education will complete a credit check and notify the parent of the results. If the parent has been denied a PLUS loan based on their credit report, the parent may request a review of the decision or obtain an additional endorser for the loan. The Department of Education charges a 4.204% loan origination fee on all PLUS loans.
Lenders are prohibited from giving anything of value to any college in exchange for any advantage sought by the lender. This severs any inappropriate financial arrangements between lenders and schools and specifically prohibits revenue sharing arrangements.
Lenders may not pay or give colleges any financial benefits whatsoever to get on a colleges preferred lender list.
Lenders are prohibited from giving college employees anything of more than nominal value. This includes a prohibition on trips for financial aid officers and other colleges officials paid for by lenders.
Lenders are prohibited from paying college employees anything of value for serving on the advisory boards of the lenders.
Lenders must ensure that employees of lenders never identify themselves to students as employees of the colleges. No employee of a lender may ever work in or provide staffing assistance for a college financial aid office.
Lenders must disclose to any requesting school the range of rates they charge to students at the school, the number of borrowers at each rate at the school, and the lenders historic default rate at the school. This will ensure that schools will have the information they need to select preferred lenders who are best for students and parents.
Lenders shall fully and prominently disclose to students and their parents any agreements they have to sell loans to any lender.