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Student Loans

North Central Michigan College is a Federal Family Education Loan Program (FFELP) participant. This type of loan is also referred to as a Stafford Loan.

► The Free Application for Federal Student Aid (FAFSA) must be completed in order to
     receive a loan.

• All students applying for a Federal Stafford Loan and parents applying for a Federal PLUS loan must be U.S. citizens or eligible non-citizens.
  
• All students must be enrolled at least half-time (minimum of six credit hours per semester for undergraduates)
  to qualify for a Federal Stafford loan or to have their parents qualify for a Federal PLUS loan.
  
• Students must attend classes and maintain satisfactory academic progress to continue to be eligible for their loans.
  
• If students withdraw from classes before the end of the semester, they must still repay their loans.
  

► Stafford Loans enter repayment six months after the student graduates or ceases to be
     enrolled at least half-time. Standard repayment lasts ten years. Alternative payment
     plans are available.

Rights and Responsibilities

It is important to understand your rights and responsibilities in the loan process. By doing so, you will greatly diminish delays or problems you may otherwise encounter. Your rights and responsibilities include the following:

1. You are required to repay education loans even if you did not finish your academic program or if your academic program did not meet your expectations.
2. You are responsible for notifying your school and lender if you have received student loans from more than one lender.
3. You must use money received from student loans for education-related expenses only.
4. You must notify your lender in writing of:
   1. Name or address change
   2. Failure to enroll at least half-time
   3. Failure to enroll for the loan period certified
   4. Failure to enroll at North Central Michigan College
   5. Withdrawal from school or reduction of attendance to less-than-half-time
   6. Transfer from one school to another
   7. Graduation
5. If you meet the eligibility requirements, you have a right to repayment deferments which suspend principal and interest payments for a specified period of time. Deferments can be requested for a number of reasons, including returning to school on at least a half-time basis.
6. You have a right to consider the loan repayment alternative for which you qualify as you enter the repayment process. This includes loan consolidation alternatives.

Repaying Your Loan

You are required to begin repaying your Federal Stafford loan six months after you graduate, leave school or drop below half-time attendance. In most cases, your parents are required to begin repaying PLUS loans 60 days after the loans are fully disbursed. In both cases, borrowers generally have 10 years to repay these loans. Under a level repayment plan your monthly payment would be at least $50. For example, the monthly payment on a $6,000 Stafford loan with an interest rate of 8.25 percent would be $73.59 under a 10-year repayment plan. There are other repayment options:

1. Many lenders, including the ones listed in this document offer flexible repayment options that allow you to gradually increase your payments over time or tie the size of your monthly payment to your income. You can learn more about these options by asking your lender or using some of the repayment calculators at www.usagroup.com.
2. You can investigate consolidating all of your education loans so you have one monthly payment. This program also generally allows you to extend the repayment period beyond 10 years.
3. If you experience economic hardship or other circumstances that limit your ability to repay your loan, you might qualify for a deferment or forbearance. Deferment allows you to postpone repayments for certain approved reasons for as long as you are enrolled at least half-time in a postsecondary school, graduate fellowship or rehabilitation program (if you have disabilities). Deferments of up to three years are also available if you are unemployed. If you don’t qualify for a government approved deferment, you can request forbearance from your lender. Forbearance can delay or reduce your monthly payments. Usually, however, you must still pay the interest on your loan during the forbearance period.

Please Note: If you fail to repay your loan, you will be considered in default. If this occurs, your credit rating will be damaged and you may not be able to borrow in the future to pay for a car or home or even to continue your education. Your wages may be garnished and your federal and state income taxes may be withheld; your loan may be sent to a collection agency and you will be liable for collection fees.

Understanding Your Loan Choices

There are two types of Federal Stafford loans: subsidized and unsubsidized.

Subsidized	For students that meet certain financial need criteria, the federal government will pay the interest on the loan while the student attends school at least half-time or during times when the student qualifies for an authorized deferment.
Unsubsidized	Students that do not meet the financial need criteria for a subsidized loan may qualify for an unsubsidized student loan. The student is responsible to pay the interest on the loan while they are in school or they can choose to have the interest added to their principal balance.

Loan amounts and maximums are set by the government. All students must meet eligibility requirements. Loan limit information for students attending a two year community college is provided below.