Federal Direct Loan Programs
Federal Direct Loan Programs (Subsidized and Unsubsidized): All student loans must be repaid with interest, starting six months after enrollment for fewer than 6 credits. The interest rate is set each June. To be eligible students must be enrolled or accepted for admission for at least six (6) credit hours and meet all other general eligibility requirements. Loans cannot exceed the student’s own cost of undergraduate education. For more information please click https://studentaid.ed.gov
All Direct (Stafford) Student Loan recipients are required to complete Loan Entrance counseling AND a Master Promissory Note at www.studentloans.gov. These will only need to be completed once while attending SUNY Westchester Community College.
Direct Subsidized Loans are need- based loans. The student is not charged interest on subsidized loans while in school at least half-time, grace or deferment status. The U.S. Department of Education is the lender.
Direct Unsubsidized Loans are NOT need-based loans. Unsubsidized loans DO accrue interest while student is in school. Interest on unsubsidized loans accrues from the date of disbursement and continues through the life of the loan. Students, however, do have the option to defer this interest payment which will be added unto the principal (capitalized). It is suggested that students pay the interest while enrolled or eligible for other deferments to reduce the overall cost of the loan. The U.S. Department of Education is the lender.
*Note: If you receive a Direct Subsidized Loan that is first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.
Annual Loan Amounts
| Dependent student | Independent student | |
| 1st-year* undergrad | $5,500 ($3,500 subsidized;$2,000 unsub) | $9,500 ($3,500 subsidized;$6,000 unsub) |
| 2nd-year** undergrad | $6,500 ($4,500 subsidized;$2,000 unsub) | $10,500 ($4,500 subsidized;$6,000 unsub) |
*First year students are defined as those who have fewer than 30 completed credit hours
**Second year students are defined as those who have 30 or more completed credit hours.
Aggregate Loan Limits
| Dependent student | Independent student and Dependent student whose parents can’t get Plus loan | |
| undergrad | $31,000(no more than $23,000 subsidized) | $57,500 (no more than $23,000 subsidized) |
*NEW* For first-time borrowers on or after July 1, 2013 there is a new limit on the maximum period of time that you can receive Direct Subsidized Loans. In general, you may not receive Subsidized Loans for more than 150% of the published length of your program. For example, if you are enrolled in a 2-year associate degree program then you are limited to a three year period for which you can receive subsidized loans. Please contact the Financial Aid office for more information regarding the new “150% Rule”.
The average loan indebtedness for students who graduated from Westchester Community College during the 2013-2014 academic year was $8,484.
Limiting Subsidized Loan Eligibility to 150% of Program Length: What You Need to Know
As of July 1, 2013, a first-time Federal Subsidized Student Loan borrower is no longer eligible for the Subsidized Student Loan program if he or she exceeds 150% of the published length necessary to graduate within an undergraduate degree program.
The 150 percent change means students in a four-year program will be eligible for subsidized student loans for the equivalent of six years , three years for students in a two-year program. The student who reaches this limitation could continue to receive unsubsidized Stafford loans if he or she is otherwise eligible (for example, has not run afoul of the school’s satisfactory academic progress requirements).
Once a borrower has reached the 150 percent limitation, his or her eligibility for an interest subsidy also ends for all outstanding subsidized loans that were disbursed on or after July 1, 2013. At that point, interest on those previously borrowed loans would begin to accrue and would be payable in the same manner as interest on unsubsidized loans.
Congress wants to encourage students to obtain undergraduate degrees within a reasonable time frame. Students who change majors multiple times or, drop classes excessively or retake classes excessively are most likely to be affected by this change.
Listed below are situations that will require you to start accruing interest on your Direct Stafford Subsidized Loan, such as:
- I am no longer eligible for Direct Stafford Subsidized Loans and I stay enrolled in my current program.
- I am no longer eligible for Direct Stafford Subsidized Loans, did not graduate from my prior program, and am enrolled in an undergraduate program that is the same length or shorter than my prior program.
- I transferred into a shorter program and lost eligibility for Direct Stafford Subsidized Loans because I have received Direct Stafford Subsidized Loans for a period that equals or exceed my new, lower maximum eligibility period, which is based on the length of the new program
Questions and Answers
I previously borrowed a subsidized loan prior to July 1, 2013. Does this rule apply to me?
No. This rule is in effect for new (first-time) subsidized student loan borrowers who borrow on or after July 1, 2013. Students who previously borrowed a subsidized student loan prior to July 1, 2013 are not impacted by this policy.
Will I receive less federal student loan money if I am affected by this?
It depends. What you would have previously received in the subsidized student loan program, you may borrow in the unsubsidized loan program. This is assuming you have not reached your lifetime Federal student loan borrowing limits. More information about lifetime Federal student loan borrowing limits can be found on https://studentaid.ed.gov/sa/types/loans
Can I appeal the 150% rule if I have extenuating circumstances?
No. Federal law provides no provisions to appeal this rule.
For further information please view https://studentloans.gov/myDirectLoan/directSubsidizedLoanTimeLimitation.action
Interest Rates
On May 9, 2018, the Treasury Department held a 10-year Treasury note auction that resulted in a high yield of 2.995%. The chart below shows the interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2018 and before July 1, 2019.
| Interest Rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans First disbursed on or after July 1, 2018 and before July 1, 2019 |
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| Loan Type | 10-Year Treasury Note High Yield | Add-On | Fixed Interest Rate |
| Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students | 2.995% | 2.05% | 5.05% |
| Direct Unsubsidized Loans for Graduate and Professional Students | 2.995% | 3.60% | 6.60% |
| Direct PLUS Loans for Parents of Dependent Undergraduate Students and for Graduate or Professional Students | 2.995% | 4.60% | 7.60% |
Thank you for your continued support of the Federal student assistance programs.
Interest on subsidized loans is deferred while students are in school for at least 6 credits. The interest rate on subsidized loans is calculated each year based on the 10-year Treasury Bill rate plus 2.05 percent and is capped at 8.25%. For loans first disbursed on or after 7/1/18 and before 7/1/19, the interest rate is 5.05%.
Interest on unsubsidized loans is calculated each year based on the 10-year Treasury Bill rate plus 2.05 percent (undergraduate students) or 3.6 percent (graduate/professional students) and is capped at 8.25 % for undergraduate students and 9.5% for graduate/professional students. For loans first disbursed on or after 7/1/18 and before 7/1/19, the interest rate is 6.60% for undergraduate students and 7.6 % for graduate/professional student.
Is there a charge to take out a Direct Loan?
In addition to interest, you pay a loan fee that is a percentage of the principal amount of each loan. We deduct the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay. The current fees by loan type are available at StudentAid.gov/interest.
The chart below shows the loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Oct. 1, 2016.
| Loan Type | First Disbursement Date | Loan Fee |
| Direct Subsidized Loans and Direct Unsubsidized Loans | On or after 10/1/17 and before 10/1/18 | 1.066% |
| On or after 10/1/16 and before 10/1/17 | 1.069% | |
| Direct PLUS Loans | On or after 10/1/17 and before 10/1/18 | 4.264% |
| On or after 10/1/16 and before 10/1/17 | 4.276% |
Loans first disbursed prior to Oct. 1, 2016, have different loan fees.
Loan Repayment
Direct Loans have a six month grace period after you leave school (or drop below half-time). Repayment begins at the end of the grace period, however interest on subsidized loans first disbursed between July 1, 2012, and July 1, 2014 will begin to accrue interest during the grace period.
For information regarding loan repayment options including loan forgiveness programs, go to http://studentaid.ed.gov/repay-loans
Default Rate: Westchester Community College fiscal year (FY) 2012 3-year Cohort Default Rate (CDR) is 9%.