LOAN FAQs
What's the difference between subsidized and unsubsidized loans?
How can I apply for a loan and when do I receive my money?
How much can I borrow?
What’s the interest rate?
How do I know if I’m eligible?
How do I choose a lender?
How and when do I begin repaying back my loan?
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What's the difference between subsidized and unsubsidized loans?
SUBSIDIZED loans are for students who show a financial need. Students who have a subsidized loan do not pay the interest on their loans while attending college.
UNSUBSIDIZED loans are for students who do NOT show a financial need. Students with Unsubsidized Loans are responsible for paying interest while attending college. Interest is either paid quarterly or can be deferred and rolled into the principle making overall cost of the loan substantially higher.
How can I apply for a loan and when do I receive my money?
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Click here to view the loan application process
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Loan application periods are as follows:
- Fall 2008 Application period
September 8, 2008 - November 14, 2008
- Spring 2009 Application Period
February 2, 2009- April 17, 2009
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Loan checks are disbursed as follows:
- Fall 2008 semester applicants:
- disbursement date will be on or after September 20, 2008 (depending on date of application)
- second checks for borrowers who applied in the fall will be requested for February 9, 2009
- Spring 2009 semester applicants:
- disbursement date will be on or after February 16, 2009 for first time spring borrowers at LPC (depending on date of spring application)
- second disbursement checks scheduled for March 2, 2009
Students in short term courses must have at least 6 units of courses whose start dates have passed before a check can be released. Enrollment in late-start courses may affect the timing of a student becoming eligible to receive their check depending on the number of units which began prior to the check receipt date. The financial aid office reserves the right to verify student’s actual attendance and progress in a course prior to check release.Checks will be held until at least 6 units of coursework has begun. Poor attendance or progress may be a basis for cancellation of a loan disbursement.
How much can I borrow?
The maximum amount you can apply for is $3,500 in
subsidized loans for first year students (<30 semester units)
and $4,500 for subsidized loans for second year students (>30 units).
In addition, DEPENDENT students may borrow up to $2,000 in
additional unsubsidized loans. INDEPENDENT students
may borrow up to $6,000 in additional unsubsidized
loans.
An individual’s maximum loan eligibility is determined by the cost of attendance less financial aid awarded and any other financial resources. A student may never borrow greater than this amount. The maximum cumulative undergraduate student loan debt a dependent student may incur is $31,500. The maximum for an independent student is $57,500; of this amount no more than $ 23,000 can be subsidized.
What’s the interest rate?
July 1, 2006, Stafford loan interest rates changed from a variable interest rate to a fixed rate of 6.8%. As a result of this change, students who have previous loans may end up with a combination of loans, some with a variable rate (disbursed prior to 7/1/06) and others with fixed rates (disbursed on/after 7/1/06).
Note: the Federal Government is lowering interest rates on subsidized loans in the coming years. This reduction in interest rates does not affect unsubsidized loans (which will remain at the current fixed interest rate of 6.8%) Please see chart below for changes in rates.
| 1st disbursement of loan made on or after | 1st disbursement of loan made before | interest rate on the unpaid balance |
|---|---|---|
July 1, 2008 |
July 1, 2009 |
6.0 % |
July 1, 2009 |
July 1, 2010 |
5.6 % |
July 1, 2010 |
July 1, 2011 |
4.5 % |
July 1, 2011 |
July 1, 2012 |
3.4 % |
How do I know if I’m eligible?
Eligibility requirements are the same as those required for other sources of Title IV federal financial aid, including meeting satisfactory academic progress requirements. Additionally, a loan student must always maintain enrollment in a minimum of 6 units each semester. Students who do not complete 6 units will be disqualified from receiving their loans.
How do I choose a lender?
The following is our preferred lender list for federal Stafford loans.
EFSI - www.efsi.net
SOUTHWEST – www.sssc.com
BANK of AMERICA - www.bankofamerica.com/studentbanking
WELLS FARGO - www.wellsfargo.com/student/
After carefully reviewing the features offered by a wide range of lenders, we have chosen these lenders because:
1) They offer a superior combination of savings, customer service, and loan processing reliability.
2) We have maintained a close working relationship with these lenders and we maintain critical personnel contacts, which enables us to expedite problem resolution on behalf of the student.
Borrowers have the right to choose lenders other than those on our preferred lender list. If you wish to borrow from a lender who is not on our preferred list, please contact the financial aid office. Any lender who participates with EdFund as a guarantee agency can be selected, but loan delivery time may be delayed slightly due to system set-up.
How and when do I begin repaying back my loan?
Repayment begins six months after you either graduate OR drop below six (6) units. Payments average $50.00 per month or more, depending on the cumulative amount borrowed.
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