Tabor College has been selected to participate in the William D. Ford Federal Stafford Direct Loan Program. Under this program, students borrow money from the federal government to pay for their college costs. The U.S. Department of Education makes the loans, through the college, directly to the students. Tabor College will use the student’s direct loan to pay for college expenses and will give the student any remaining funds. Additional information on Federal direct loans is available from the Department of Education or (800) 848-0979.
Federal Loan Application Process
In order to receive a Federal loan, all students must complete the Free Application for Federal Student Aid (FAFSA) by using FAFSA on the web. Once the FAFSA has been completed and Tabor College has the results, the student loan application process consists of four basic steps:
- Step 1. Log in to www.studentloans.gov with your FSA ID and Password
- Step 2. Complete your Entrance Counseling Session
- Step 3. Complete and sign your electronic Master Promissory Note
- Step 4. Sign your Financial Aid award letter with the appropriate Stafford loan amount
IMPORTANT: Before beginning your electronic Master Promissory Note session:
- Be ready to provide two references (name, address, and telephone number). These should be people who have known you for at least one year (preferably relatives) who live at different addresses.
- Remember to always use your full legal name as it appears on your social security card.
To be eligible for a Federal Direct Loan a student must:
- be a U.S. citizen or permanent resident alien;
- be taking at least six credit hours and be matriculated in a degree or certificate program;
- not owe any refunds on a Pell Grant or other awards received and not be in default on repayment on any type of student loan.
Each new student loan recipient will be required to complete entrance counseling before a loan application is processed and attend an exit interview when graduating or terminating from school.
Federal regulations require that all student loan borrowers must have an exit interview/exit counseling during their final semester at the College. All borrowers should plan to attend exit counseling with the Financial Aid Office at this time. During the exit counseling, students are reminded of their rights and responsibilities as a student loan borrower. The Federal Direct Loan Exit Counseling Guide for Borrowers is the primary resource used. Topics include: when repayment starts, various repayment plans, deferments, loan consolidation, and consequences of default. All borrowers are requested to complete the Rights and Responsibilities Checklist and Borrower Information Form.
Students may access information about Exit Counseling. This provides access to the Exit Counseling Guide as well as the Borrower’s Information Form and the Borrower’s Rights and Responsibilities Form which must be completed in the exit interview process.
Students who have a pin number have the option of using the online Exit Counseling. This will satisfy all requirements for exit counseling and give the borrower up to date information on their student loan balances. This is the quickest and easiest way to satisfy the exit counseling requirement.
Subsidized and Unsubsidized Direct Loans are awarded on the budgeted annual cost of attending Tabor College. Students are limited in the amounts they can borrow through the Direct Loan program each year. The interest rate is variable from year to year but is capped at 8.25 percent. Students who use the Direct Loan program are not required to make payments on the principal of the loan until six months after they leave school or drop below half time.
A Subsidized Direct Loan is a need-based loan that is awarded to students who have financial need based on the information submitted to FAFSA. The interest on subsidized Stafford Loans is paid by the federal government while the student is in school at least half-time.
For unsubsidized Direct Loans, interest accrues while the student is still in school. The borrower has the option to pay the interest while in school. If they choose not to pay the interest, the interest is added to the principal of the loan.
First time borrowers must complete an Entrance counseling requirement and the master promissory note for the loan. Both requirements can be completed online before the loan funds can be disbursed to your student account.
The Parent Loan for Undergraduate Students (PLUS) is a loan that a parent applies for and repays on behalf of his or her dependent student’s education. The interest rate on the PLUS loan is fixed rate set each July 1, with a cap of 9.00 percent. It is currently below that rate. Contact the Office of Student Financial Assistance for information on the current year’s rate.
Private Education Loans help bridge the gap between the cost of an education and the other aid available. Private loans are offered by private lenders and eligibility generally is dependent on a credit score. Most traditional students require a co-signer. Tabor College does not recommend a private lender but does recommend you use a reputable bank and review the terms carefully.