Loan Types & Policies
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 option such as grants and scholarships before considering loans. It is also important to be an informed borrower and borrow responsibly.
West Georgia Technical College participates in the Federal Direct Loan Program, which provides assistance to all eligible students regardless of financial need and 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 periods and 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).
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.
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. The actual 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.
|Freshman||$5,500—No more than $3,500 of this amount may be in subsidized loans||$9,500—No more than $3500 of this amount may be in subsidized loans|
|Sophomore||$6,500—No more than $4,500 of this amount may be in subsidized loans||$10,500—No more than $4,500 of this amount may be 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 Loan
To apply for a Federal Direct Loan, you must first complete the Free Application for Federal Student Aid (FAFSA) and submit a loan request form. The Financial Aid Office will use the information from your FAFSA to determine which loan program (subsidized or unsubsidized) you are eligible to receive. You will need to complete loan entrance counseling, a master promissory note, and the Annual Student Loan Acknowledgment before your loan funds are disbursed. These requirements are satisfied on the Federal Student Aid website.
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.
West Georgia Technical College will certify any private loans from any lender chosen by the student. The Office of Financial Aid will certify your eligibility upon receiving a lenders certification request. Private loans are disbursed directly to West Georgia Technical College and will be applied directly to the student’s accounts. Refund of excess funds will be made in the same manner as with other aid.