Learn more about federal loans.
What is a Federal Direct Loan?
The Direct Loan program offers three low interest loans to students and parents to help offset educational costs. They are:
- Direct Subsidized
- Direct Unsubsidized
- Direct PLUS.
All have fixed interest rates for one year (July 1-June 30) and students must meet general eligibility requirements, enrollment levels and satisfactory academic progress in order to be considered for each. The Financial Aid Office will determine the type and amount of loan you receive.
To qualify for Federal loans, students must complete the Free Application for Federal Student Aid (FAFSA) and meet other eligibility criteria outlined by the Department of Education. In addition, first time borrowers must complete Entrance Counseling (EC) and a Master Promissory Note (MPN). All HACC students who are awarded loans must finalize the amount they want to borrow by accepting, reducing or canceling their loans. Detailed instructions for EC, MPN and information about accepting, reducing or canceling loans can be found in the myHACC portal.
- Subsidized Loan
A loan for undergraduate students with financial need. The U.S. Department of Education pays the interest on a Direct Subsidized Loan while you're in school at least half-time, for the first six months after you leave school (referred to as a grace period), and during a period of deferment (a postponement of loan payments).
- Unsubsidized Loan A loan that is not based on financial need. With an unsubsidized loan, the student is responsible for the interest on the loan from the time the loan is disbursed until the loan is paid in full. Interest payments may be made while you are in school or can be deferred and capitalized when repayment begins. This means that the interest that accrues is added to the principle loan balance. Interest then begins accruing on the new principal loan balance.
- Direct PLUS (Parent) Loan Parents of a dependent undergraduate student are eligible to apply for a PLUS Loan. A credit check will be performed during the application process. If the borrower has an adverse credit history, they may still receive a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history or documenting to the U.S. Department of Education's satisfaction extenuating circumstances relating to their adverse credit history. If a parent is denied the PLUS loan, the student is permitted to receive additional Unsubsidized loan. To apply for a PLUS loan, students should access the "Parent PLUS request form" available in myHACC, have their parent complete the form and submit it to the Financial Aid Office.
How do you determine whether I receive a Subsidized or Unsubsidized loan?
You may receive a Subsidized, Unsubsidized, or combination of both. Your Cost of Attendance, Expected Family Contribution and other financial aid resources are all used to determine the type and amount of loan you receive. Dependency status and grade level are also factors used to determine your eligibility.