Federal Loans
Students planning to borrow student loans must first complete the Free Application for Federal Student Aid (FAFSA). To receive federal loans, students must be enrolled at least half-time and are subject to annual and aggregate maximums. The loans carry a federal guarantee which means that an overwhelming majority of students who apply for these loans receive them - even when they are unable to receive other, conventional loans. Note that student borrowers should carefully read how to keep your aid in the Southwestern College Financial Aid Handbook.
There are three loan programs currently authorized by Title IV legislation.
FEDERAL DIRECT LOANS
Federal Direct Stafford Loan (Subsidized) - a guaranteed student loan available to undergraduate students who demonstrate financial need. Loan interest is subsidized by the taxpayer for borrowers enrolled at least half-time and for a six (6) month grace period after the borrower ceases at least half-time enrollment. The interest rate on loans disbursed on or after July 1 is fixed at 4.99%. Loan fees apply. Terms and Conditions.
Federal Direct Stafford Loan (Unsubsidized) - a guaranteed student loan available to graduate and undergraduate students regardless of financial need. Loan interest is paid by the borrower throughout the life of the loan. Optional interest only payments may be made by the borrower while enrolled in school. The interest rate on new loans disbursed on or after July 1 is fixed at 4.99% for undergraduates and 6.54 for graduates. Loan fees apply. Terms and Conditions.
How to Apply - The first step in applying for a loan at Southwestern College is to officially accept the offer of the loan by replying to the annual award letter. In the response, the student should write that they accept the loans as offered or indicate which loans they are declining or adjusting. (Examples: "I would like to accept all loans as offered." or "I would like to accept the subsidized loan and decline the unsubsidized loan."). The response must come from the student's email address - preferably @sckans.edu.
If this is the first time the student has accepted a Federal Direct Loan, the student must also complete the following steps:
- Complete an online Master Promissory Note (MPN): When logging in, have the student's FSA User ID, password and the names and information of at least 3 references who live at different addresses ready. Make sure that the MPN option for Federal Direct Loan MPN for students is selected. The MPN is valid for 10 years. This step is waived for students who have an active MPN on file with the Department of Education.
- Complete Entrance Counseling. This step is required for every first-time borrower and waived for students who have received a Federal Direct Loan within the past year. When logging in, have the student's FSA User ID ready. Make sure that the PLUS Entrance Counseling marked "required" is selected.
National Student Loan Data System (NSLDS) - Once a student has properly applied for a loan, the loan will be submitted to NSLDS, and will be accessible to guaranty agencies, lenders, and schools who are determined to be authorized users of the data system. Borrowers may also use the www.studentaid.gov portal to track their loans through repayment.
FEDERAL PLUS LOANS
Federal PLUS loan for Undergraduates - available to parents wishing to finance the difference between a student's financial aid and the remainder of the Southwestern College balance. The loan may also be used to finance travel abroad experiences and qualified living expenses. PLUS loans do not carry a federal guarantee and are therefore subject to an adverse credit evaluation and approval. This evaluation is performed before the MPN is signed and before funds are released to the student's account. The interest rate on new loans disbursed on or after July 1 is fixed at 7.54%. Loan fees apply. Terms and Conditions.
Federal PLUS loan for Graduates - available to graduate students wishing to finance the difference between their financial aid and the remainder of the Southwestern College balance. This loan may also be used for travel abroad experiences and qualified living expenses. Application for this loan is subject to an adverse credit history check. The interest rate on new loans disbursed on or after July 1 is fixed at 7.54%. Loan fees apply. Terms and Conditions.
How to Apply - application processes for these loans vary depending on if you are a parent of an undergraduate or graduate student.
Parents: Parents who wish to borrow a PLUS loan must annually inform Southwestern of the amount requested and apply for the loan at studentloans.gov. Applications each academic year are available on May 1. IMPORTANT: This process of applying will check the borrower's ability to receive a parent loan. Because of that, the person who will ultimately be completing the promissory note should be the person who completes the application as the borrower. The parent borrower will need to log in using their own FSA User ID and password. (If the borrower does not have an FSA User ID and password, a link to create one exists in the log in area.)
- If this is the first time the borrower has accepted a Federal PLUS loan offer, the individual will need to complete the online Master Promissory Note (MPN). When you log in, have your parent FSA User ID, password, and the names and information for 3 references who live at different addresses. The MPN is valid for 10 years. This step is waived for parents who already have an established MPN for the enrolled student on file with the Department of Education.
In some circumstances, a borrower is not approved for a PLUS loan due to adverse credit. When this happens, there are two options available to the family:
- The denied parent may apply with the aid of an endorser (co-signer), appeal and submitting additional entrance counseling specifically designated for the PLUS loan. Make sure the PLUS counseling option marked "required" is selected.
- The Office of Financial Aid can increase the student's eligibility with an additional Federal Direct Unsubsidized Loan (subject to the annual and aggregate maximums for independent students.)
Graduates: Graduates who wish to borrow a PLUS must email or visit the Office of Financial aid to discuss their eligibility for this loan. Loan amounts are subject to federal limits that vary according to the student's financial aid package and the current cost of attendance.
- If this is the first time the borrower has accepted a Federal PLUS loan, the individual will need to complete a Master Promissory Note (MPN) and Entrance Counseling. Make sure you select the options for graduate students and required PLUS counseling. When you log in, have your FSA User ID, password and names and information for 3 references who live at different addresses. The MPN is valid for 10 years. These requirements are waived for students who have borrowed a Federal PLUS loan within the last year.
National Student Loan Data System (NSLDS) - Once a student or parent has properly applied for a loan, the loan will be submitted to NSLDS, and will be accessible to guaranty agencies, lenders, and schools who are determined to be authorized users of the data system. Borrowers may also use the www.studentaid.gov portal to track their loans through repayment.
FEDERAL PERKINS LOAN
Federal Perkins Loan - This loan was discontinued by Congress on October 1, 2017 and is no longer awarded - although many still are in repayment. Interest on the loan is subisidzed by the taxpayer while the borrower is in school at least half-time and for 9 months after the borrower ceases half-time enrollment. The loan did not carry loan fees and the interest rate on these loans was fixed at 5%. Terms and Conditions.
- Loan Repayment Details (Department of Education)
- Repayment Estimator
- Federal Aid Portal for Students and Families (studentaid.gov)
