Grants are a form of financial aid that do not have to be repaid! Loans, however, do.
How to Apply
You can apply for all federal, state, and some institutional financial aid programs by completing the Free Application for Federal Student Aid (FAFSA) online at:
For more information on completing the FAFSA, visit Apply for Financial Aid.
Federal Pell Grant
A Pell Grant is money the government provides to eligible students each year. This grant is based on financial need and full payment can be made if the student carries 12 or more credit hours per semester. A student carrying one to 11 hours can receive a proportionately reduced award.
Federal Supplemental Educational Opportunity Grant (FSEOG)
This is another federal grant provided to assist a student with exceptional financial need. Priority is given to those who are also Federal Pell Grant recipients. The amount awarded is therefore based on federal funding levels and college policy. A typical award at Southern State ranges from $200 to $300 per academic year.
How to Apply
To apply for student loans through the federal government you must first complete the Free Application for Federal Student Aid (FAFSA). The FAFSA results are received by the college and returned to you with the information on grants or free financial aid if you qualify. The initial FAFSA results will be mailed to your home address and will include documents required to complete the financial aid process in addition to borrowing student loans. Apply online at:
In an effort to reduce student borrowing, Southern State requires a Student Loan Request Form for all Federal Student Loans. Upon notification of your FAFSA awards from the Financial Aid Department you may complete the student loan request form. The loan request must be returned to the Office of Financial Aid. The student loan will be added to your financial aid package and a revised award letter will be mailed. If you are a first-time student loan borrower you must also complete the Required Counseling.
Federal Student Loans
Southern State understands the importance of managing the cost of education. In addition to grants, scholarships and federal work study, Southern State participates in the William D. Ford Federal Direct Student Loan Program. The loan program is designed to assist students with low-interest educational loans. The loan money comes from the federal government directly to Southern State. The loan proceeds are applied to the student account toward tuition, fees and other approved charges. If students borrow more than the direct charges (tuition, fees and books) the remaining money is mailed by check to the address that the student has on file with the college.
To obtain and determine eligibility for the loan students must complete the FAFSA (free application for federal student aid). This loan may be subsidized, unsubsidized or a combination of both. The loan is in the student’s name and is repaid by the student. Loan amounts are based on cost of attendance, the grade level, dependency status and other financial aid resources of the student. Students must be enrolled and attend at least half time (6 semester hours) to be eligible for a student loan.
Subsidized Loan – This is a need based loan. The government pays the interest while the student is in school at least half time.
Unsubsidized Loan – This is a non-need based loan. Students are responsible for the interest from the time of disbursement until the loan is paid in full. The student may pay the interest while in school or the interest may be capitalized (added) to the principle amount. Students are encouraged to pay the interest to the loan servicer while they are in school.
Loan Fees – Currently the U.S. Department of Education will charge 1% as a fee for processing the loan. This fee is deducted from each disbursement of the loan.
Interest Rates – The interest rate for student loans is determined by the time when it was disbursed not when it is in repayment. Therefore, from year to year interest rates may vary.
Subsidized loans have a declining fixed interest rate. Direct Loans first disbursed July 1, 2008 and after:
- July 2008 to June 2009: 6%
- July 2009 to June 2010: 5.6%
- July 2010 to June 2011: 4.5%
- July 2011 to June 2013: 3.4%
- June 2013 to July 2014: 3.86%
- July 2014 to June 30, 2015: 4.66%
Unsubsidized student loan interest rate 2014 is 4.66%.
Disbursements – The first disbursement of a loan for a first time borrower to Southern State must be delayed until 30 days into the first semester. Returning borrowers will receive loan funds the fifth week of the semester.
Promissory Note – All students who borrow a Federal Direct Loan are required to complete a Federal Direct Loan Master Promissory Note (MPN). The MPN can be completed online at studentloans.gov/myDirectLoan/index.action. This is a contract with the U.S. Department of Education and is the promise to repay student loans. The MPN is good for up to 10 years and additional loans may be obtained using the same MPN.
Repaying Student Loans
Student Loans must be repaid to the federal government beginning six months after graduation or dropping below half-time enrollment. This six months is called a grace period. This time can allow students to get financially settled to begin repayment. The federal government offers several repayment plans as well as deferments, forbearances and consolidation. Students may choose the repayment plan that best suits their financial situation. Repayment plans may be changed at any time after payments begin. The following list includes the different types of payment plans:
Standard Repayment Plan – This plan requires fixed monthly payments with repayment of the loan in full within 10 years (not including periods of deferment or forbearance) from the date repayment begins. Payments must be a minimum of $50 per month and can be significantly higher if necessary to repay the loan within the 10 years.
Graduated Repayment Plan – Under this plan, payments are lower at first, and gradually increase over time. Students will repay the loan in full within 10 years from the date the loan entered repayment.
Extended Repayment Plan – This plan will allow students to repay the loan within a period not to exceed 25 years from the loan date payment begins. Students are eligible for this repayment plan only if their outstanding loan balance with the Direct Loan Program is in excess of $30,000.
Income Contingent Repayment Plan – Under this plan monthly payment amounts will be based on annual income (and that of spouse if married), family size and the total amount of Direct Loan debt.
Income-Based Repayment Plan (effective July 1, 2009) – Under this plan, required monthly payments are capped at an amount that is intended to be affordable based on income and family size. To initially qualify for the plan students must have a partial financial hardship. To be considered to have a partial financial hardship the monthly amount students would be required to pay on eligible loans under a Standard Repayment Plan with a 10-year repayment plan is more than the monthly amount required under the Income Based Repayment Plan. If payments are made under this plan for 25 years and after meeting other requirements students still have an outstanding balance this debt may be forgiven.
Pay As You Earn Repayment Plan (effective December 2012) – Under this plan if student loan debt is high relative to income, and depending on when the student first borrowed a loan, borrowers may qualify for this plan. This plan helps keep the monthly payments affordable and usually has the lowest monthly payment of the plan options.
For additional information regarding the different payment plans and options visit studentaid.ed.gov/repay-loans.
Student loan debt awareness is critical to the success of students at Southern State. Unfortunately not every student qualifies for free or non-loan financial assistance. The Office of Financial Aid at Southern State strives to help students with debt awareness and borrowing wisely.
Borrow Only What You Need
Education is an investment in the future. Borrow only the amount of loan that is needed. Federal Subsidized and Unsubsidized Loans are offered to students at maximum levels to provide the full financial aid based on the cost of attendance at Southern State. Before accepting student loans on the award letter, students should determine what is needed to cover expenses. The award offer provides estimated expenses per semester in addition to all financial aid awards. The award letter will provide a breakdown of direct costs (money owed to the college) such as tuition and books, as well as indirect cost (money not charged directly to students) such as transportation.
Accepting loan money can be easy. Repayment can be more difficult. To determine potential salary and job information for the degree or major you are seeking visit mappingyourfuture.org. It is important to understand the comparison between what you are borrowing and the anticipated salary range for the job or career you choose. This information can help assist in budget preparation. Look at the total loan debt but also at the monthly payment associated with the loan. This will help to determine what students can reasonably expect to repay upon entering repayment of the student loan.
Before borrowing a student loan or continuing to borrow on student loans visit studentloans.gov and complete the Financial Awareness Counseling. To assist in completing the counseling have a copy of the student loan award letter that was sent by the Office of Financial Aid. The Awareness Counseling provides budgeting, repayment information and resources that are important to student success. This online tool provides students with their current loan obligation if any and repayment information.
Entrance Counseling – Prior to receiving student loan funds, new students to Southern State are required to participate in entrance counseling. The counseling is completed on campus at the Office of Financial Aid. First-time borrowers will receive information on dates and times to complete in person. First-time borrower’s loan funds are not disbursed until 30 days after the start of the term and attendance has been verified. After the first disbursement of the student loan the loan servicer will provide you with a welcome letter to their loan services. This information will be extremely important in establishing a relationship with the loan servicer. Immediately establish an online account or a line of communication with the servicer. The servicer is the point of contact regarding repayment.
Exit Counseling – Exit counseling at studentloans.gov is also a requirement any time a student borrower takes a break from enrollment or graduates. Immediately after ceasing enrollment students may complete the exit counseling at studentloans.gov. The Office of Financial Aid at Southern State will also notify students when the counseling is required. Exit Counseling pertains primarily to repayment of the loan debt.
The following is a list of some of the items reviewed in exit counseling:
- A current description of the loan, including the average monthly payment
- Tips to avoid delinquency and default
- Deferment and forbearance options (temporary postponements of the student loan)
- The amount of total debt (principal and estimated interest), current interest rate and the total interest charges on the loan
- An explanation of the fees that might be charged during the repayment period such as late charges
- A reminder of available options for loan consolidation and a reminder that students can prepay the loan without penalty at any time
- Repayment options, monthly payment amounts and advice about debt management
- Notification that borrowers must provide expected permanent address and the name and address of the expected employer
To access financial aid counseling at studentloans.gov, complete a master promissory note or obtain information from nslds.ed.gov (National Student Loan Data System). Students will need the 4-digit pin number assigned by the Department of Education (this is the electronic signature).
Know Your Current Student Loan Debt
As a student loan borrower students can check on how much in loans they have borrowed to-date by logging on to nslds.ed.gov. Tools within the website are designed to assist with understanding repayment amounts based on the size of student loan debt. Students who have prior student loan debt will receive a copy of their student loan history from the nslds website within the award package.
Parent Plus Loans
Parents may borrow a Parent Plus Loan for their dependent student. A parent may borrow for their child up to the cost of attendance. To be eligible to borrow a parent loan they must be the biological or adoptive parent (or in some cases stepparent) of the student for whom they are borrowing. The child must be a dependent student who is enrolled at least half-time (6 semester hours). Credit history will be checked to determine eligibility.
Repayment of the parent loan is made by the parent and can not be transferred to the student. The repayment period begins 60 days after the parent received the last installment of the loan for a school year. To request to postpone payments until after the student is graduated or withdrawn parent’s should contact the loan servicer.
To apply for a parent plus loan a parent must complete the Request for Direct Plus Loan at studentloans.gov. Southern State does not automatically package parent loans unless requested by the student or parent.
These are loans based upon the credit rating of the student or parents. Eligibility is determined by the lender. Southern State does not promote any particular vendor, but will certify any qualified candidate.