Kalamazoo Valley Community College

Stafford Loan Facts William D. Ford Federal Direct Stafford Loans

William D. Ford Federal Direct Stafford Loans (Direct Loans) are low-interest, educational loans. Funds are provided by the federal government.  These loans help students finance their educational expenses.  We urge you to borrow conservatively.  Don’t borrow more than you need!  The interest rate on these loans are generally less than commercial rates and repayment begins after you leave school or drop below half-time enrollment.

Federal Stafford Loans are available for undergraduate, graduate and professional degree students.  You must be enrolled at least half-time (6 or more credits at KVCC) and be pursuing a certificate or degree program. Certificate of Achievement, Post Associate Certificate, and Unclassified Programs are not considered eligible programs for federal or state financial aid. 

If you are a first-time student, first-time borrower, your loan proceeds will not be disbursed to your student account until after 30 days have elapsed from the beginning date of the loan period.

Types of Direct Loans
Direct Subsidized Stafford Loan: Eligibility for this need-based loan is determined by the Financial Aid Office based on your FAFSA results.  Interest is paid by the federal government while you are enrolled at least half-time (minimum six credit hours a semester.)

Direct Unsubsidized Stafford Loan: This non-need based loan is identical to the Subsidized Direct Stafford Loan except that the student is responsible for the interest while in school.  The student has the option of paying the interest or having it capitalized which means the lender may add the accrued interest to the principal you owe.

Borrowing Limits for Direct Stafford Loans: The amounts listed are the federal limits for an academic year.  Grants, work-study and scholarships may have an impact on your loan eligibility.

Grade Level Dependent Independent

Freshman
(0-23 credits)

$3,500 + $2,000* $3,500+ $6,000*

Sophomore
(24 credits or more)

$4,500 + $2,000* $4,500 + $6,000*

  *Denotes additional Unsubsidized Stafford Loan

Processing Fees
All Federal Direct Subsidized and Unsubsidized Stafford Loans are subject to a 1% origination fee.  For example, if you borrow $3,500, you will receive $3482.50. ($3,500 x 0.5% (1.0% origination fee – 0.5 % rebate) = $17.5, $3,500 - $17.5 = $3,482.50).

Loan Disbursement

If you are a first-time student, first-time borrower, your loan proceeds will not be disbursed to your account until after 30 days have elapsed from the beginning of your loan period. 

Your loan will be disbursed in two installments, usually at the beginning of each semester.  You will be notified by email (KVCC will use your KVCC email address) when each disbursement arrives.  Your loan funds will be sent to KVCC and applied directly to your student account.  Your loan funds may be included in your book and supply authorization and/or credit balance/refund.  Refer to appropriate class schedule for initial credit balance/refund release dates.  Credit balance/refunds are processed weekly; however, it may take up to 14 days from the date your loan has disbursed to your account before you receive your credit balance/refund.

Loan Counseling (Important)
All new borrowers at KVCC are required to complete Entrance Counseling. Entrance Counseling must be completed before your loan is certified.  All borrowers at KVCC must complete Exit Loan Counseling. Exit Counseling is required prior to completion of your program at KVCC.

For information on State Grant Assistance in your state of residence, please refer to the U.S. Department of Education website at http://wdcrobcolp01.ed.gov/Programs/EROD/org_list.cfm?category_ID=SHE