Federal Student Loans

Federal Versus Private Loans


PVCC participates in the Federal Direct Student Loan Program. Federal student loans may be a way to address a shortfall between the funds that you have and the funds that you will need. There is always a cost to borrowing money but federal student loans may offer benefits, such as flexible repayment plans, that aren't available with other loans. It is important to know and understand everything involved with applying for a loan. Outlined below are the required steps along with the Direct Loan Request Form. Please review everything carefully and contact us if you have any questions.

Step1: Complete the Free Application for Federal Student Aid (FAFSA)

To establish eligibility for the Federal Direct Loan you must complete and submit a FAFSA form for the applicable award year. Be sure to include PVCC (School Code: 009928) on your FAFSA. PVCC will not certify your loan without first obtaining the processed results from your FAFSA application. FAFSA and any additional requested paperwork must be completed before a loan can be processed.

Step 2: Complete Entrance Counseling

This counseling will help you learn more about the necessity of repaying your student loan, planning for repayment, and your rights and responsibilities as a borrower.

  1. Go to www.studentaid.gov/entrance-counseling
  2. Log in using your FSA ID
  3. Complete the Undergraduate Entrance Counseling
Step 3: Complete the Master Promissory Note (MPN)

The Master Promissory Note (MPN) is a legal document in which you promise to repay your loans and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loans.

  1. Go to www.studentaid.gov/mpn
  2. Log in using your FSA ID
  3. Complete the Undergraduate MPN
Step 4: Complete the PVCC Loan Application Form

PVCC Loan Application

This collects the information necessary for PVCC to electronically transmit student loan data to the Department of Education. They will send the loan funds to PVCC and PVCC will credit the account when the funds are received.

Step 5: Certification by PVCC

The Financial Aid Office will create a loan record for you and electronically transmit the record to the Department of Education. To be eligible to receive a Federal Direct Student Loan you must:

Step 6: Disbursement of Funds

Financial Aid Disbursements & Refunds

Funds will not be disbursed until Entrance Counseling, MPN, and financial aid requirements are completed. The Department of Education will send funds to PVCC. If the loan amount exceeds your applicable charges, a refund will be issued to the authorized bank or prepaid account on file. Refunds will be issued within 14 days from the date the refund is posted to your student account. Federal Direct Loans will not be disbursed to your PVCC account until after the last day to drop with a refund for all classes you are enrolled in each semester. Disbursements will begin no earlier than mid-semester. No aid is directly available at the beginning of the semester.

Understanding the Loan Program

Borrowing student loans is a serious responsibility–borrow conservatively. Review the following information carefully and contact
our office if you have any questions. For more detailed information, visit studentaid.gov and nslds.ed.gov

Loan Type Qualifications Limits How Interest Works Credit Check?
Subsidized Must have financial need Lower loan limits (see table below) U.S. Department of Education pays interest while student is enrolled No
Unsubsidized Not required to have financial need Higher loan limits (see table below) Student is responsible for paying interest for the entire life of the loan No

Interest Rates

The interest rate for subsidized and unsubsidized loans is a fixed interest rate for the life of the loan. The interest rate for the 21-22
Academic Year is 3.73%.

Annual Loan Limits

Dependent Students* Base Sub. Amount Additional Unsub. Amount Total
Freshman (1-30 Credits) $3,500 $2,000 $5,500
Sophomore (31+ Credits) $4,500 $2,000 $6,500
Independent Students** Base Sub. Amount Additional Unsub. Amount Total
Freshman (1-30 Credits) $3,500 $6,000 $9,500
Sophomore (31+ Credits) $4,500 $6,000 $10,500

* Excludes students whose parents cannot borrow PLUS
** Includes students whose parents cannot borrow PLUS

Lifetime Loan Limits

Student Status Sub Amount Total
Dependent Undergraduate $23,000 $31,000
Independent Undergraduate* $23,000 $57,500

* Includes additional Undergraduate degree or post-baccalaureate

Fees

The loan fee is deducted proportionately from each loan disbursement you receive while enrolled in school. This means the money you receive will be less than the amount you actually borrow. You're responsible for repaying the entire amount you borrowed and not just the amount you received. The loan origination fee is 1.057% for the 21-22 Academic Year.

Default

The default is a failure to pay your loan back according to the terms disclosed in your master promissory note. You are in default on your Direct Loan if your payments are more than 270 days past due or if you fail to comply with all other terms of the loan. When this happens, any or all of the following may occur: the default will be reported to national credit bureaus, recorded on your permanent credit record, and can significantly and adversely affect your credit history; you may be subjected to legal action by the holder of the loan; your wages may be garnished; you will be unable to get additional federal or state financial aid—including student loans.

Loan Denial

Under federal regulations 34 CFR 685.301(a) (8), PVCC has the right on a case-by-case basis to deny loans. Loan approval may be denied for the following circumstances:

  • Students with insufficient loan eligibility remaining to complete their program of study.
  • Students with a previous default and student loan debt from all sources of equal to or greater than half the maximum aggregate limit in either Subsidized or Unsubsidized Loans for the student's status as a dependent or independent student.
  • PLUS Loans: when the parent's or student's loan debt exceeds combines Subsidized/Unsubsidized aggregate undergraduate loan limits.
  • Other circumstances that strongly indicate an unwillingness to repay or abuse of loan programs.
  • Any denial will be explained to the student in writing.
  • Student and parent borrowers cannot be denied based on race, gender, color, religion, national origin, age disability status, or income.

Return of Title IV Aid

If a recipient of Title IV Aid resigns from college during a period of enrollment, the school must calculate the amount of aid the student earned up through the date of last attendance. Unearned aid (including loans) must be returned to the Title IV programs. Title IV Aid includes Pell Grants, SEOG, and Federal Direct and Federal PLUS loan programs. When a student resigns from college before completing 60% of the period of enrollment for the semester, a calculation of the return of funds will be performed. When it is necessary to return loan funds, PVCC is required to return the money that was disbursed to the student and the student will be required to reimburse PVCC for the repayment amount.

Creating Your In-School Budget

Establish a budget each school year before you take out a loan. This will help you monitor your spending and determine whether or not your financial resources will cover your education costs. You may find that you don't need to take out a loan each school year or that you don't need to borrow all the money your school has offered you.

     Budget Worksheet

Parent PLUS Loans

Parents of undergraduate dependent students can borrow a PLUS Loan in their name for their student's education expenses, up to the Cost of Attendance. Must be biological, adoptive or stepparent. Parents can borrow in addition to the student borrowing Federal Direct Stafford Subsidized or Unsubsidized Loans or instead of the student borrowing.

  • The U.S. Department of Education is your lender.
  • Credit check required, no adverse credit.
  • Repayment begins after the last disbursement. Parents can apply for a deferment with the lender until the student graduates, withdraws or drops below six credit hours, plus a six-month grace period.
  • The maximum loan amount is the cost of attendance minus any other financial aid received. 
  • Direct PLUS Loans Basics for Parents

PVCC Parent Plus Loan App.