Federal Direct Loan Program
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If you are interested in the Federal Loan Program,
PLEASE READ THIS ENTIRE DOCUMENT CAREFULLY. |
School Code: 002057
WHAT IS A FEDERAL DIRECT LOAN?
Federal Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (the Department) rather than a bank or other financial institution.
The following Federal Direct Loans are made through the William D. Ford Federal Direct Loan (Direct Loan) Program, which is administered by the U.S. Department of Education:
Subsidized Loan - is awarded on the basis of need. If a borrower qualifies for a subsidized loan, the federal government pays interest on the loan ("subsidizes") until the student finishes college, ceases enrollment, and during authorized periods of deferment.
Unsubsidized Loan - is not awarded on the basis of need. If a borrower qualifies for an unsubsidized loan, interest is charged from the time the loan is disbursed until it is paid in full.
Federal Direct Loans may be processed as subsidized and/or unsubsidized depending on the borrower's eligibility and the amount requested.
Students have the right to cancel or change their requested loan amount at any time during the academic year. Click here to cancel or change your loan now.
WHAT ARE THE LOAN LIMITS?
Maximum Undergraduate Federal Direct Loans
Per Academic Year
| Grade Level |
BASE Limit
|
ADDITIONAL Limit
|
|
(Sub/Unsub)
|
(Unsub Only)
|
|
|
Freshman |
$3,500 + $2,000 Unsub |
$4,000 |
|
Sophomore |
$4,500 + $2,000 Unsub
|
$4,000
|
ACM can only certify loan eligibility through the sophomore level.
Federal Direct Loan funds may be subject up to a 1% origination fee with an upfront rebate of .5% withheld by the Department of Education prior to each disbursement.
Dependent Students (those required to use parental information) can only apply up to the BASE Limit amount plus $2,000 Unsubsidized. Dependent students with a Direct Plus Loan Denial may apply for ADDITIONAL amounts.
Independent Students (those not required to use parental information) can apply for the BASE plus $2,000 Unsubsidized and the ADDITIONAL amounts.
Students must take at least six credits per semester in order to have a Federal Direct Loan processed.
Average Loan Indebtedness at Allegany College of Maryland is currently $16,358 per graduate!
Please contact the Financial Aid Office at 301-784-5213 if you have any questions.
The following web site www.studentloans.gov is useful and offers beneficial information regarding Federal Direct Loans.
Electronic Signature (E-sign) is a convenient and fast way to sign a loan application on-line rather than printing a promissory note signature page, signing it, and sending it through the U. S. mail. E-sign is an electronic process or symbol that a student/parent uses to show intent to "sign" a legally binding document.
WHAT IS A MASTER PROMISSORY NOTE (MPN)?
The Master Promissory Note (MPN) is a legal document in which one promises to repay loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s). Students can borrow additional Federal Direct Loans on a single MPN for up to 10 years.
Parent borrowers approved to borrow a Direct PLUS loan must complete an MPN for each student for whom they are borrowing for.
The entire MPN process must be completed in a single session. Each MPN generally takes approximately 30 minutes to complete.
Click here to sign your MPN. |
ACM will disburse Federal Direct Loan money by crediting it to the student's account to pay tuition, fees, and other authorized charges. If the loan disbursement amount exceeds the student's school charges, ACM will pay the remaining balance of the disbursement directly by check.
The Federal Direct Loan will be disbursed in at least two payments; no payment may exceed one-half of the total loan amount.
NOTE: All First-year, First-time borrowers at Allegany College of Maryland will have the first disbursement held until 30 days from the first day of the semester.
STEPS IN APPLYING FOR A FEDERAL DIRECT LOAN
Students must complete the Free Application for Federal Student Aid (FAFSA) and have a complete financial aid file for the academic year before the Federal Direct Loan process will begin.
A completed file includes:
- FAFSA results
- Signed Federal tax returns for students and/or parents, as requested
- Non-tax filing statement, if applicable
- Verification Worksheet.
- High School transcript or copy of GED on file in the Admissions Office.
Once the student is registered for at least 6 credits and has a completed file, the Federal Direct Loan will be originated.
New/Transfer Borrowers:
- Cancel all loan(s) and other aid at prior institution that cover the same period of enrollment desired at Allegany College of Maryland.
- ACM will notify previous lender(s) and/or servicer of your current enrollment status through the National Student Clearinghouse as well as the new anticipated graduation date from Allegany College of Maryland.
All Federal Direct Loan borrowers at Allegany College of Maryland will be required to complete the on line Entrance Counseling Session and Quiz. ACM Financial Aid Office will be notified upon completion. When the Federal Direct Loan has been awarded, an Award Letter confirming the approved loan amount is mailed to the student.
NOTE: A school can refuse to certify a loan or can certify a loan for an amount less than requested if the school documents the reason in writing. The school's decision is final and cannot be appealed to the U.S. Department.
