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Loans

Loan FAQs

Due to regulation changes, Stafford loans approved after July 1, 2010, come under the Direct Loan program.  With Direct Loan, the US Department of Education is the lender, not a bank.  There are two types of Stafford Loans:  subsidized and unsubsidized (neither requires a credit check).  Both types demand that students are enrolled in at least six credit hours and making satisfactory academic progress in a degree or certificate program.  Subsidized Stafford Loans setup after July 1, 2012, have an interest rate of 6.8% and are for students whose FAFSA results show financial need.  No interest is charged while the student is enrolled in at least 6 credit hours.  Unsubsidized Stafford Loans have an interest rate of 6.8% and are for students who meet eligibility requirements but do not qualify, at least in part, for a subsidized loan.  They are not based on financial need and interest on the loan accumulates regardless of the circumstances.

All of these steps must be completed before we will process a loan:

  • Complete your financial aid file, including the FAFSA and all requested paperwork
  • Complete an OC Stafford Loan Request Form and return it to our office
  • Make sure that your current major and correct address are on record in the Registrar’s Office
  • Make sure that all transcripts from all other colleges attended are on file and evaluated for transfer credit by the Registrar’s Office
  • Complete both a Master Promissory Note (MPN) and Entrance Counseling.

Student loans should be considered only after exhausting all other aid sources. Loans are serious financial obligations that must be repaid with interest. Loans should be used only to pay for direct college expenses such as tuition and fees, books and supplies, and housing charges, as well as indirect educational expenses such as transportation or increased child care costs. “Applying for Direct Loans” includes both a budget calculator and a repayment calculator to help you estimate your educational expenses and future monthly loan payments. Please remember that an upfront loan origination fee of approximately 1.0% is deducted from each federal loan disbursement.
 
Your grade level in your current program of study, dependency status, enrollment level, and cost of attendance determine the maximum amount you may borrow during an academic year (not to exceed your cost of attendance). Dependency status is determined from the information provided on your FAFSA. Your grade level is determined according to the scale below.

 

Undergraduate Loan Limits
Year in School Hours Earned / Transferred 
 Dependent Independent
    Subsidized Unsubsidized Subsidized Unsubsidized
First Year 0-29 $3500 $2000 $3500 $6000
Second Year 30-59 $4500 $2000 $4500 $6000
Independent students may borrow the maximum amount available in both subsidized and unsubsidized loans as long as the total amount does not exceed the cost of attendance. For example, an independent second-year student may borrow up to $10,500 if otherwise eligible.
 
Dependent students may not receive additional unsubsidized loan eligibility unless a parent first applies for and is denied a Federal Direct Parent PLUS Loan. Due to federal regulations, the school may not be able to certify the full amount requested, and we cannot certify loans for more than the amount requested by the student.

The federal One Big Beautiful Bill Act (OB3), signed into law in 2025, includes several changes to federal student aid programs that are scheduled to begin July 1, 2026. Current undergraduate annual Direct Loan limits remain unchanged; however, additional regulations may affect borrowing eligibility and repayment options beginning with the 2026–2027 academic year. 

 
Key OB3 changes include:
 
  • Federal Direct Loans for undergraduate students will continue under current annual borrowing limits. 
  • Students enrolled less than full-time may have federal loan eligibility prorated based on enrollment intensity. Students enrolled in fewer than 6 credit hours remain ineligible for Federal Direct Loans. 
  • Parent PLUS Loans for new borrowers will be limited to $20,000 per year per dependent student, with a lifetime aggregate limit of $65,000 per student. 
  • Existing borrowers who received a federal loan before July 1, 2026, may qualify for “legacy” provisions allowing continued borrowing under current rules for up to three additional academic years or the remainder of their program, whichever is less. (
  • Federal repayment plan options will change beginning July 1, 2026, with borrowers generally limited to a Standard Repayment Plan or a new income-based Repayment Assistance Plan (RAP). 
Federal guidance regarding implementation of OB3 continues to evolve, and additional changes may occur as the U.S. Department of Education releases final regulations and guidance. 

All loans will be divided into two disbursements per semester, one is at the beginning and another at the mid-point of the semester (mid-October for Fall & mid-March for Spring, Summer dates vary depending on enrollment).  Students who are both first-time borrowers and new in their major may not receive loan funds until 30 days after the first class day.   You will receive a disclosure statement listing your loan amounts, fees deducted, interest rates and disbursement dates.  We will disburse your loan by crediting your school account to pay tuition and fees, dorm charges and other authorized charges. Any remaining funds with be refunded back to the student within 14 days. Via direct deposit or by mail.

Notify both OC and Direct Loan Servicing Center:

  • If you change your name, address or phone number
  • If you change schools
  • If you stop attending or drop below 6 credit hours at the school that certified the loan
  • If you graduate.

You are required to do exit counseling from the studentloans.gov website.  You will receive a 6 month grace period from the date you stopped attending and then begin repayment of your loans.  You will typically have from 10 to 25 years to repay your loan depending on the repayment plan that you choose.   The Direct Loan Servicing Center will notify you of the date your first payment is due and give you the option to set up an automatic draft which reduces your interest rate by .25%. 

Don’t stop making your payments and contact the Direct Loan Servicing Center right away.  They can help you change your repayment plan, get a deferment or set up a period of forbearance.  For more information about any of these options, check out the Department of Education Direct Loans site for students.  If you quit making payments and default on the loan you could face:

  • Being sued for the unpaid balance, court costs and attorney’s fees
  • Having your wages and/or your tax refunds garnished
  • Charged for collection fees
  • Being denied a professional license
  • Being denied other federal aid
  • Having your credit score lowered which could impact buying a home or car
  • Losing all of the loan repayment benefits and having the entire loan note called

The federal parent loan, called PLUS, is available for parents or step-parents of dependent students to cover school costs, less any other aid.  Applicants must have satisfactory credit and complete an OC PLUS Loan Request Form.  The interest rate is variable.  Parents may choose to start repaying the loan 60 days after the date of the last disbursement or they can defer payments until six months after the student ceases to be enrolled at least half-time. In addition, the interest that accrues can either be paid by the parent monthly, quarterly, or be capitalized quarterly.  A complete financial aid file including, but not limited to, the submission of a completed FAFSA is required by the student.  The parent must complete the OC PLUS loan request form and the MPN at www.studentloans.gov.  The parent signs the MPN with the Department of Education PIN used on the FAFSA.  The entrance counseling and the 30 day delay of the Stafford do not apply to the PLUS.  Additional Unsubsidized loans may be awarded to independent students or to dependant students whose parents were denied a PLUS loan.

Students and their families may also apply for a loan through a private lender of their choice.  A credit check is required and some lenders ask the school to approve the loan amount and set the disbursement dates.  We recommend that students explore Stafford loans and the FACTS payment plan first as interest rates and repayment options are usually better, but private loans can be used to pay for non-school expenses or delinquent balances owed to the college. 

Go to the National Student Loan Data System website to see the status of all of your federal loans. You will need your FAFSA pin number to login.

OC Student Financial Services adheres to the National Association of Student Financial Aid Administrators ethical principles and code of conduct.

Odessa College’s six-digit OPE ID is 359600.