Student Loans

Federal regulations require direct loans to be divided into at least two equal payments. If your loan is a two semester loan, this simply means that the first half of the loan will be sent during the first period, and the second disbursement will be sent at the beginning of the second period. One-semester loans are also divided into two payments: 1st half of the loan at the beginning of the term (or 30 days after the period for the first year borrowers begins) and the second half at the midpoint of the semester. Your loan disbursements will be reduced by an opening commission of up to 1% and a predetermined fee of up to 1%.

Before direct loans are applied to your Dalton State account, the Financial Aid Office must verify that you:

1) Be enrolled at least part time

2) Be attending classes

3) You are making satisfactory academic progress with financial aid

Any balance to Dalton State College tuition, fees, bookstore, or housing expenses must be paid with your loan funds. If there is a balance remaining after all balances are paid, the earliest money can be returned to the student is during the second week of school. Refunds of part of the financial aid for Dalton State students will be issued through BankMobile Disbursements, a technology solution, powered by BMTX, Inc.. For more information about BankMobile Disbursements, visit this link: http://bankmobiledisbursements.com/refundchoices/.

One of your responsibilities as a Direct Loan borrower is to notify your lender when you graduate or drop below half-time enrollment. You are also responsible for notifying your lender when you change address, phone number, or name. Your lender will notify you of repayment terms, including the date of your first payment, monthly payment amount, and repayment options.

Dalton State College reports student enrollment status to lenders through the National Student Loan Clearinghouse once a month.

Students are required to go through Direct Loan Exit Counseling when they graduate or drop below half-time enrollment at Dalton State College. Exit counseling informs you of the seriousness and importance of your obligation to repay your loans and describes the likely consequences of default. During exit counseling, you are given information regarding loan indebtedness, repayment options, debt management techniques, and your lender’s phone number and address. Student records are put on a system-wide hold until Direct Loan Exit Counseling is completed.

When you graduate or don’t return at the end of a term, exit counseling is required. If you withdraw from Dalton State College, you are required to go through Direct Loan exit counseling in the Financial Aid Office as part of the withdrawal process. This requirement must be completed before the withdrawal is official and may take up to an hour to complete.

You are given a six month grace period after you graduate or drop below half-time enrollment before repayment begins on your Direct Loan. After the six month grace period ends, you go into repayment on your loan. However, if you wish to start paying early, there are no penalties for early payment.

Interest accrues on an Unsubsidized Federal Direct Loan from the time you receive the loan. try to pay interest quarterly to keep the total cost o the loan down. Any unpaid interest will be added to your loan balance, called capitalization, when you enter repayment. Estimated quarterly interest on a $1,000 Direct Loan at 6.8% interest is $17.00. Multiply $17 by the number of thousands you plan to borrow in Unsubsidized Direct Loans, to estimate the quarterly interest charge (i.e., if you’re borrowing a $4,000 Unsubsidized Loan, quarterly interest would be: 4 x $17 = $68.00).

Repayment Period: You have up to 10 years to repay a Federal Direct Loan. The minimum monthly payment is $50 per month. Use the following chart to estimate how much your monthly repayment will be.

Repayment Options: Contact your lender when you have questions about your Direct Loan or experience problems repaying your loan. It is in your best interest, as well as your lender’s best interest, to keep your loan in good standing. Some options that might be available to you during repayment are:

Deferment – No payments are due on your Direct Loan if you are granted a deferment. If you have borrowed Subsidized Direct Loans, no interest accrues on these loans during deferment periods. The most common deferment is for re-enrolling in college at last half-time. However, there are also deferments for inability to find full-time employment (for up to three years) and economic hardship (for up to three years). Check with your lender if you have questions regarding deferments or want to apply for a deferment.

Forbearance – If you can’t afford to make payments on your student loan, but don’t qualify for a deferment, contact your lender regarding forbearance. If approved, forbearance allows you to postpone repayment for a period of time. However, interest continues to accrue during periods of forbearance. Contact your lender if you have questions regarding forbearance or wish to request a period of forbearance.

Student Loan Consolidation – Consolidation allows you to combine all of your federal student loans into one consolidation loan. You may want to consider consolidation if you send in more than one monthly student loan payment, or want to lower your monthly payment. Consolidation lengthens your repayment period and reduces your monthly payment. However, as with any loan spread out over a longer repayment period, you may pay more interest if you take longer to repay the loan. You may also loose out on some of the benefits offered by your Direct Loan lender; contact the Financial Aid Office for more information on consolidation.

Consequences of Defaulting on your Federal Direct Loan:

Failure to repay your loan according to terms disclosed in your master Promissory Note (MPN) results in default. Student loans go into default when payments are 270 days past due. To avoid default, contact your lender if you’re having trouble making your monthly payment. They will give you options to keep from defaulting on your loan.

Consequences of defaulting on your federal Direct Loan are:

• You can be sued for the entire amount of your student loan.
• Your credit rating can be severely damaged, making it difficult to borrow money in the future.
• Your federal and state income tax refunds may be withheld.
• Your wages may be garnished.
• You cannot receive anymore federal or state financial aid unless you make satisfactory arrangements to repay your loan.
• You may be liable for the costs associated with collecting your loan, including court costs and attorney fees.
• YOU ARE STILL RESPONSIBLE FOR YOUR LOAN!