Federal Direct Stafford Loan Program

Klamath Community College participates in the Federal Direct Stafford Loan Program and offers student loans through the federal government. There are two programs in the Direct Loan Program, the Subsidized Loan and Unsubsidized Loan.  It is important that you carefully consider your need to borrow since these loans must be repaid.

If you have been offered a Federal Direct Stafford Subsidized or Unsubsidized Loan, you must complete the following steps:
  • Complete the Master Promissory Note (MPN).
  • Complete the Direct Loan Entrance Counseling in person.
The Subsidized Loan
The Federal Direct Stafford Subsidized Loan is a need-based federal loan awarded to students who demonstrate financial need. The US Department of Education pays the interest*. Beginning with the 2013/2014 academic year there is a limit on the maximum period of time a new student borrower can receive the Direct Subsidized Loan.   
  • While you are in school at least half-time*
  • For the first six months after you leave school*
  • During a period of deferment (a postponement of loan payments*)
If eligible for the Direct Subsidized Loan, KCC will notify you via the award letter of the maximum amount you may borrow for the academic year that you are applying for.
For further information: visit Federal Direct Stafford Subsidized Loan (link is external)

https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
 
 Maximum eligibility period to receive Direct Subsidized Loans 
There is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. This is called your “maximum eligibility period”. You can usually find the published length of any program of study in your school’s catalog.
For example, if you are enrolled in a 4-year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Loans is 6 years (150% of 4 years = 6 years). If you are enrolled in a 2-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is 3 years (150% of 2 years = 3 years). 
Your maximum eligibility period is based on the published length of your current program. This means that your maximum eligibility period can change if you change programs. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count against your new maximum eligibility period.
 
 
The Unsubsidized Loan
The Federal Direct Stafford Unsubsidized Loan is a non-need based federal loan that cannot exceed the Student Budget minus other financial aid. Interest begins to accrue from the time the loan is disbursed until it is paid in full. Interest can be paid while enrolled (or during other periods of non-payment) or you may choose to allow interest to accrue. Allowing interest to accrue will increase the total amount you repay.
For further information: visit Federal Direct Stafford Unsubsidized Loan (link is external)

https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
 

How much can I borrow?

Your school determines the loan type(s), if any, and the actual loan amount you are eligible to receive each academic year.  However, there are limits on the amount in subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate and graduate study (aggregate loan limits). The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These limits vary depending on

  • what year you are in school and
  • whether you are a dependent or independent student.

If you are a dependent student whose parents are ineligible for a Direct PLUS Loan, you may be able to receive additional Direct Unsubsidized Loan funds.

The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans.

Year

Dependent Students (except students whose parents are unable to obtain PLUS Loans)

Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)

First-Year Undergraduate Annual Loan Limit

$5,500—No more than $3,500 of this amount may be in subsidized loans.

$9,500—No more than $3,500 of this amount may be in subsidized loans.

Second-Year Undergraduate Annual Loan Limit

$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.

Third-Year and Beyond  Undergraduate Annual Loan Limit

$7,500—No more than $5,500 of this amount may be in subsidized loans.

$12,500—No more than $5,500 of this amount may be in subsidized loans.

Graduate or Professional Students Annual Loan Limit

Not Applicable (all graduate and professional students are considered independent)

$20,500 (unsubsidized only)

Subsidized and Unsubsidized Aggregate Loan Limit

$31,000—No more than $23,000 of this amount may be in subsidized loans.

$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

 

Interest Rate


What is interest?
Interest is money paid to the lender in exchange for borrowing money. Interest is calculated as a percentage of the unpaid principal amount (loan amount) borrowed. 

How is interest calculated?
The amount of interest that accrues (accumulates) on your loan from month to month is determined by a simple daily interest formula. This formula consists of multiplying your loan balance by the number of days since the last payment times the interest rate factor.
Simple daily interest formula:
Outstanding principal balance
x number of days since last payment
x interest rate factor
= interest amount


What are the interest rates for federal student loans?
The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan. The table below provides interest rates for Direct Loans first disbursed on or after July 1, 2016.
Interest Rates for Direct Loans First Disbursed on or After July 1, 2016
Loan Type Borrower Type Loans first disbursed on or after 7/1/16 and before 7/1/17 Loans first disbursed on or after 7/1/17 and before 7/1/18
Direct Subsidized Loans Undergraduate 3.76% 4.45%
Direct Unsubsidized Loans Undergraduate 3.76% 4.45%
Direct PLUS Loans Parents and Graduate or Professional Students 6.84% 7%
All interest rates shown in the chart above are fixed rates for the life of the loan.
Note: The interest rates for federal student loans are determined by federal law. If there are future changes to federal law that affect federal student loan interest rates, we will update this page to reflect those changes.
View the interest rates on federal student loans first disbursed before July 1, 2014.
 

Other than interest, is there a charge for this loan?

Yes, there is a loan fee on all Direct Subsidized Loans and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed, as shown in the chart below.

Loan Fees for Direct Subsidized Loans and Direct Unsubsidized Loans

First Disbursement Date

Loan Fee

On or after Dec. 1, 2016, and before Oct. 1, 2017

1.069%

On or after Oct. 1, 2017, and before Oct. 1, 2018

1.066%

Loans first disbursed prior to Dec. 1, 2016, have different loan fees.Klamath Community College participates in the Federal Direct Stafford Loan Program and offers student loans through the federal government. There are two programs in the Direct Loan Program, the Subsidized Loan and Unsubsidized Loan.  It is important that you carefully consider your need to borrow since these loans must be repaid.
If you have been offered a Federal Direct Stafford Subsidized or Unsubsidized Loan, you must complete the following steps:

  • Complete the Master Promissory Note (MPN).
  • Complete the Direct Loan Entrance Counseling in person.
The Subsidized Loan
The Federal Direct Stafford Subsidized Loan is a need-based federal loan awarded to students who demonstrate financial need. The US Department of Education pays the interest*. Beginning with the 2013/2014 academic year there is a limit on the maximum period of time a new student borrower can receive the Direct Subsidized Loan.   
  • While you are in school at least half-time*
  • For the first six months after you leave school*
  • During a period of deferment (a postponement of loan payments*)
If eligible for the Direct Subsidized Loan, KCC will notify you via the award letter of the maximum amount you may borrow for the academic year that you are applying for.
For further information: visit Federal Direct Stafford Subsidized Loan (link is external)

https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
 
 Maximum eligibility period to receive Direct Subsidized Loans 
There is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized Loans. In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. This is called your “maximum eligibility period”. You can usually find the published length of any program of study in your school’s catalog.
For example, if you are enrolled in a 4-year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Loans is 6 years (150% of 4 years = 6 years). If you are enrolled in a 2-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is 3 years (150% of 2 years = 3 years). 
Your maximum eligibility period is based on the published length of your current program. This means that your maximum eligibility period can change if you change programs. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count against your new maximum eligibility period.
 
 
The Unsubsidized Loan
The Federal Direct Stafford Unsubsidized Loan is a non-need based federal loan that cannot exceed the Student Budget minus other financial aid. Interest begins to accrue from the time the loan is disbursed until it is paid in full. Interest can be paid while enrolled (or during other periods of non-payment) or you may choose to allow interest to accrue. Allowing interest to accrue will increase the total amount you repay.
For further information: visit Federal Direct Stafford Unsubsidized Loan (link is external)

https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
 

How much can I borrow?

Your school determines the loan type(s), if any, and the actual loan amount you are eligible to receive each academic year.  However, there are limits on the amount in subsidized and unsubsidized loans that you may be eligible to receive each academic year (annual loan limits) and the total amounts that you may borrow for undergraduate and graduate study (aggregate loan limits). The actual loan amount you are eligible to receive each academic year may be less than the annual loan limit. These limits vary depending on

  • what year you are in school and
  • whether you are a dependent or independent student.

If you are a dependent student whose parents are ineligible for a Direct PLUS Loan, you may be able to receive additional Direct Unsubsidized Loan funds.

The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans.

Year

Dependent Students (except students whose parents are unable to obtain PLUS Loans)

Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)

First-Year Undergraduate Annual Loan Limit

$5,500—No more than $3,500 of this amount may be in subsidized loans.

$9,500—No more than $3,500 of this amount may be in subsidized loans.

Second-Year Undergraduate Annual Loan Limit

$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.

Third-Year and Beyond  Undergraduate Annual Loan Limit

$7,500—No more than $5,500 of this amount may be in subsidized loans.

$12,500—No more than $5,500 of this amount may be in subsidized loans.

Graduate or Professional Students Annual Loan Limit

Not Applicable (all graduate and professional students are considered independent)

$20,500 (unsubsidized only)

Subsidized and Unsubsidized Aggregate Loan Limit

$31,000—No more than $23,000 of this amount may be in subsidized loans.

$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

 

Interest Rate


What is interest?
Interest is money paid to the lender in exchange for borrowing money. Interest is calculated as a percentage of the unpaid principal amount (loan amount) borrowed. 

How is interest calculated?
The amount of interest that accrues (accumulates) on your loan from month to month is determined by a simple daily interest formula. This formula consists of multiplying your loan balance by the number of days since the last payment times the interest rate factor.
Simple daily interest formula:
Outstanding principal balance
x number of days since last payment
x interest rate factor
= interest amount


What are the interest rates for federal student loans?
The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan. The table below provides interest rates for Direct Loans first disbursed on or after July 1, 2016.
Interest Rates for Direct Loans First Disbursed on or After July 1, 2016
Loan Type Borrower Type Loans first disbursed on or after 7/1/16 and before 7/1/17 Loans first disbursed on or after 7/1/17 and before 7/1/18
Direct Subsidized Loans Undergraduate 3.76% 4.45%
Direct Unsubsidized Loans Undergraduate 3.76% 4.45%
Direct PLUS Loans Parents and Graduate or Professional Students 6.84% 7%
All interest rates shown in the chart above are fixed rates for the life of the loan.
Note: The interest rates for federal student loans are determined by federal law. If there are future changes to federal law that affect federal student loan interest rates, we will update this page to reflect those changes.
View the interest rates on federal student loans first disbursed before July 1, 2016.
 

Other than interest, is there a charge for this loan?

Yes, there is a loan fee on all Direct Subsidized Loans and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed, as shown in the chart below.

Loan Fees for Direct Subsidized Loans and Direct Unsubsidized Loans

First Disbursement Date

Loan Fee

On or after Dec. 1, 2016, and before Oct. 1, 2017

1.069%

On or after Oct. 1, 2017, and before Oct. 1, 2018

1.066%

Loans first disbursed prior to Dec. 1, 2016, have different loan fees.