Financial Aid Terms & Conditions

Student Loan Information Published by Department of Education

Information published by the Department of Education about rights and responsibilities of students and institutions under Title IV, HEA loan programs may be accessed at: StudentAid.gov.

William D. Ford Federal Direct Loan:

The Federal Direct Loan program is available to students.

To qualify for Federal Direct Loans, the student must file a FAFSA, be admitted into an eligible program and be enrolled at least half-time.

Dependent students may be eligible to borrow up to:

• $5,500 as a first-year student (less than 30 credits)
• $6,500 as a second-year student (31 or more)

Independent undergraduate students may be eligible to borrow up to:

• $9,500 as a first-year student (less than 30 credits)
• $10,500 as a second-year student (31 or more)

The Federal Direct Loan program includes Subsidized (need based) and Unsubsidized (non-need based) loans. The financial assistance award will indicate eligibility for either loan type or a combination of the two loan types depending on the results of the FAFSA.

Federal Direct Loans begin repayment of principal and interest at the end of the six-month grace period. The interest rate* is fixed at 3.76% for undergraduate. Interest accrual begins at graduation or less than half-time enrollment for Subsidized Stafford Loans and interest accrual begins at disbursement for Unsubsidized Stafford Loans. The U.S. Department of Education charges a 1.069% loan origination fee* which will be subtracted from the loan proceeds at disbursement.

If a Federal Direct Stafford Loan has been offered in your financial aid award and you accept the award, the following items must be completed before the funds will be credited to the student account:

• Federal Direct Stafford Entrance Counseling online at studentaid.gov
• Federal Direct Stafford Master Promissory Note online at studentaid.gov

William D. Ford Federal Direct Parent Loan for Undergraduate Students (PLUS)

The Federal Direct Parent PLUS Loan is available to parents of dependent undergraduate students.

The student must file a FAFSA. Approval of a PLUS Loan is contingent upon credit approval by the U.S. Department of Education. The parent may borrow up to the cost of attendance minus other aid received. The interest rate* is fixed at 6.31% with interest accrual beginning at disbursement. Repayment of principal and interest begins within 60 days of full disbursement or a deferment may be available to postpone repayment until 6 months after the student graduates or drops below part-time enrollment. The U.S. Department of Education charges a 4.276% loan origination fee* which will be subtracted from the loan proceeds at disbursement.

To apply for the Federal Direct Parent PLUS Loan, the parent borrower must complete:

• Federal Direct Parent PLUS Loan Request online at StudentAid.gov
• Federal Direct Parent PLUS Master Promissory Note online at StudentAid.gov

*Interest rates are set annually by the federal government on July 1. Origination fees are set annually by the federal government on October 1.

Estimated Repayment Information for Federal Direct Loans

The minimum monthly payment amount is $50 under the 10-year Standard Repayment Plan, but may be more depending on how much you borrow.

	3.76% Fixed Interest Rate
Balance at Repayment	Number of Payments	Estimated Payment Amount
$1,000	21	$50
$5,500	120	$55
$10,000	120	$100
$15,000	120	$150
$20,000	120	$201
$25,000	120	$251
$30,000	120	$301

Entrance Counseling For Student Loan Borrowers

Prior to first disbursement, Terra State Community College provides to each first-time Federal Direct Loan borrower (other than borrowers of consolidated or Parent PLUS loans) access to information regarding the terms and conditions of the loan and of the borrower's responsibilities, including:

• the effect of the loan on the eligibility of the borrower for other forms of aid
• an explanation of the use of the Master Promissory Note
• the seriousness and importance of the student's repayment obligation
• information on the accrual and capitalization of interest
• borrowers of unsubsidized loans have the option of paying interest while in school
• definition of half-time enrollment and the consequences of not maintaining half-time enrollment
• importance of contacting appropriate offices if student withdraws prior to completion of program of study
• sample monthly repayment amounts
• obligation of the borrower to repay the full amount of the loan regardless of whether the borrower completes program or completes within regular time for completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the education or other services the borrower purchased from the school
• the consequences of default
• information about the National Student Loan Database (NSLD) to access borrower's records
• name and contact information for individual the borrower may contact with questions about the borrower's rights and responsibilities or the terms and conditions of the loan

Information regarding entrance counseling may be accessed at: StudentAid.gov. 

Exit Counseling For Student Loan Borrowers

Terra State Community College provides counseling to borrowers of loans under the Federal Direct Loan programs (other than consolidated or Parent PLUS loans) when the student borrower ceases at least half-time study at the institution. The counseling provides information on:

• average anticipated monthly repayment amount
• repayment plan options
• options to prepay or pay on shorter schedule
• debt management strategies
• use of Master Promissory Note
• the seriousness and importance of student's repayment obligation
• terms and conditions for forgiveness or cancellation
• copy of information provided by the Department of Education (see "Student Loan Information Published by Dept of Education")
• terms and conditions for deferment or forbearance
• consequences of default
• options and consequences of loan consolidation
• terms and conditions of deferments for service in the Peace Corps, service under the Domestic Volunteer Service Act of 1973, and comparable volunteer service for tax-exempt organizations of demonstrated effectiveness in the field of community service
• tax benefits available to borrowers
• the obligation of the borrower to repay the full amount of the loan regardless of whether the borrower completes program or completes within regular time for completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or did not receive the educational or other services the borrower purchased from the institution
• availability of the Student Loan Ombudsman's office
• information about the NSLDS. The Department of Education is required to provide a disclosure form for students and prospective students about the NSLDS (HEOA Sec. 489(3), HEA Sec. 485B)

Information regarding exit counseling may be accessed at: StudentAid.gov.