Loan Types

Loans are the only form of financial aid that must be repaid with interest. Although loans are an option for financing the cost of higher education, it is important to exhaust other financial aid options such as grants and scholarships before considering loans. It is also important to be an informed and responsible borrower.

West Georgia Technical College participates in the Federal Direct Loan Program, which provides assistance to all eligible students regardless of financial need and other private educational loans.

Federal Direct Loan Programs

The Federal Direct Loan is composed of two loan programs: direct subsidized and direct unsubsidized loans. These loan programs have the same interest rates, repayment and deferment options, but there are some differences.

 

Direct Subsidized Loans

These loans are available to undergraduate students with demonstrated financial need. The U.S. Department of Education pays the interest on a direct subsidized loan:

•  while you’re in school at least half-time,

•  for the first six months after you leave school (referred to as a grace period) and

• during a period of deferment (a postponement of loan payments).

 

Direct Unsubsidized Loans

These loans are available to undergraduate and graduate students without a requirement of demonstrated financial need.

•  You are responsible for paying the interest on a direct unsubsidized loan during all periods.

•  If you choose not to pay the interest while you are in school and during grace, deferment, or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).

 

Interest Rates

The interest rates on Federal Direct Loans are set every July 1. The current interest rate on a federal Direct Loan is 2.75 percent.  Beginning, July 1, 2021, the interest rate will increase to 3.73 percent.

 

How Much Can You Borrow?

There are limits on the amount in subsidized and unsubsidized loans that you may be eligible to borrow each academic year and over a lifetime from the Federal Direct Loan.  The actual  annual loan amount you are eligible to receive each academic year may be less than the annual loan limit based on your cost of attendance, dependency status and other financial aid.  The charts below reflect the annual and aggregate lifetime loan.

Annual Federal Direct Loan Limits
Dependency Status 

Class

Annual Limit Subsidized LoanAnnual Limit

Unsubsidized Loan

 

Total Annual Limit

DependentFreshman$3,500$2,000$5,500
 Sophomore$4,500$2,000$6,500
 
IndependentFreshman$3,500$6,000$9,500
 $4,500$6,000$10,500
 

 

Aggregate Lifetime Federal Direct Loan Limits

 

 

Dependency Status

 

Maximum Subsidized Loan

 

Maximum

Unsubsidized Loan

Combined Subsidized/Unsubsidized Lifetime Limit
 

Dependent

 

$23,000

 

$8,000

$31,000 (no more than $23,000 in subsidized loans)
 
 

Independent

 

$23,000

 

$34,500

$57,500 (no more than $23,000 in subsidized loans)

 

How Much Should I Borrow?

As a general rule, do not accumulate more student loan debt than your expected starting salary when you leave college.  You should aim for a student loan payment that does not exceed 10 percent of your monthly take-home pay.  To estimate how much you should borrow, use a student loan affordability calculator, such as this one on NerdWallet.

 

How to Apply for a Federal Direct Loan

To apply for a Federal Direct Loan, you must first complete the  Free Application for Federal Student Aid (FAFSA) and submit a Federal Direct Loan Request Form. The Financial Aid Office will use the information from your FAFSA to determine which loan programs (subsidized or unsubsidized) you are eligible to receive. You will need to complete loan entrance counseling, a Master Promissory Note (MPN), and the Annual Student Loan Acknowledgment before your loan funds are disbursed. These requirements are satisfied on the Federal Student Aid website.

 

Private/Alternative Loans

Private student loans are non-federal loans, made by a lender such as a bank, credit union, state agency, or a school. They are different from federal student loans in that they are not guaranteed by the federal government, require a credit check, often require a co-signer, have higher interest rates and have a separate repayment from federal loans. Terms and conditions on private loans vary by lender. West Georgia Technical College encourages students to exhaust lower-interest federal loans before considering private loan options. See a comparison between federal and private loans. Selecting a private education loan can be a daunting task. We suggest you research the loans and the lender to find the best interest rate and terms of your loan.

The Higher Education Opportunity Act (HEOA) of 2008 requires institutions to develop and comply with a code of conduct that prevent conflicts of interest by financial aid personnel and to ensure the actions of staff are in the best interest of students. To this end, West Georgia Technical College will certify any private loan from any lender chosen by the student. The Financial Aid Office will certify your eligibility upon receiving a lender certification request. Private loans are disbursed directly to West Georgia Technical College and will be applied directly to your student account. Refund of excess private loan funds will be made in the same manner as with other aid.

 

Student Access Loan

Student Access Loan (SAL) is a state-funded loan program administered by the Georgia Student Finance Authority (GSFA) for eligible students attending an eligible University System of Georgia (USG), Technical College System of Georgia (TCSG), or private postsecondary institution in Georgia. The Student Access Loan is a 1 percent fixed-rate loan designed to assist undergraduate and technical college students who have a gap in meeting their educational costs. Unlike Federal Direct and Private Educational Loan programs, Student Access Loan funding is limited, and there is an application deadline.  After the application deadline, potential recipients are randomly selected until funding is exhausted. Individual colleges/universities will certify their selected students’ eligibility.  Applying or being selected for a Student Access Loan does not guarantee your approval. For more information on SAL visit GAFutures.org.