Federal Direct Subsidized Loan—This type of loan is based on the student’s financial need. EMCC will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the amount you can borrow. You are not charged interest while you’re in school at least half-time (6 or more credits) and during grace and deferment periods. The interest rate is fixed at 3.4% for loans disbursed between 7/1/12-6/30/13.
Federal Direct Unsubsidized Loan—You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like subsidized loans, EMCC will determine the amount you can borrow based on your FAFSA. Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out. You can pay the interest while you are in school and during grace, deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount. The interest rate is fixed at 6.8% for all borrowers.
Federal Direct Plus Loans-Parents of dependent students may apply for a Direct PLUS Loan to help pay their child’s education expenses as long as certain eligibility requirements are met. The annual limit on a PLUS Loan is equal to the student’s cost of attendance minus any other financial aid the student receives.The parent will pay a fee of 4% of the loan amount, deducted proportionately each time a loan disbursement is made. The interest rate is fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.