For some HACC students, loans are part of their financial aid award and necessary to help pay for their education. Please keep in mind that loans are borrowed monies which are repaid with interest. Although the educational loans provided by the Federal government are low interest and provide generous repayment options, we always caution our students to borrow only what they need to cover their educational expenses.
How much should I borrow?
For most borrowers, a student loan is a long term commitment. Do not borrow more than you will need or more than you can reasonably repay. Keep the following points in mind when determining how much you need to borrow.
- Excessive borrowing results in higher monthly payments. As a result, you may have trouble making your payments. Educate yourself on starting salaries for recent graduates in your field of study and make sure your earnings can support all your expenses including the loans you will need to repay.
- Bankruptcy may not forgive student loans, unlike other personal debt. Although not impossible, it is difficult to have student loans discharged under bankruptcy.
- You may exhaust your student loans before you graduate. If you plan to transfer to a four-year school or attend college on a part time basis, it is imperative that you plan your borrowing so you have enough funds to complete your degree.
- Take control and manage your loan debt now by finding out how much you will owe.
What are the types of loans available?
There are two basic types of loans:
Federal Direct Loans--The lender of a Federal Direct Loan is the U.S. Department of Education rather than a bank or other financial institution. These are low-interest loans for students and parents to help pay for the cost of a student's education. These include Direct Subsidized Loan, Direct Unsubsidized Loan and Direct Parent PLUS loan.
Alternative Loans--these loans are designed to assist students in paying for remaining costs when other types of financial aid (grants, loans and work programs) are not enough to cover charges. Alternative loans should be considered as a last resort and only after all other low-cost financial aid resources have been exhausted. Students may choose any lender they wish if they pursue an alternative loan. HACC does not promote any specific lender; and we encourage you to research interest rates, customer service, borrower benefits, and repayment incentives.
Are there limits on how much I can borrow?
Yes, there are limits (annually and aggregate) on how much a student can borrow under the Direct Loan programs. Since HACC is a two year institution, students will not go above sophomore status and can not receive loans at the junior and senior level. The chart below shows the maximum yearly amounts and total aggregate you can borrow in both subsidized and unsubsidized loans:
|Year in College||Dependent Undergrad||Independent Undergrad and Dependent students whose parents are denied a PLUS loan||Graduate and Professional degree students|
Freshman (0-29 credits) AND Diploma Program Students
|$5500 (no more than $3500 may be subsidized)||$9500 (no more than $3500 may be subsidized)|
$20,500 (no more than $8500 may be subsidized).
Effective July 1, 2012, graduate and professional students are not eligible to receive Direct Subsidized Loans.
|Sophomore (30+ credits)||$6500 (no more than $4500 may be subsidized)||$10500 (no more than $4500 may be subsidized)|
|Junior and Senior||$7500 (no more than $5500 may be subsidized)||$12500 (no more than $5500 may be subsidized)|
Maximum Total Allowed in loan debt (Aggregate Loan Limits)
$31,000 (No more than $23,000 may be subsidized loans)
|$57,500 (no more than $23,000 may be subsidized)||$138,000 (includes loans received for undergraduate study)|
Are there exceptions to the amount I can borrow?
Yes. Following Federal regulations, some students may not be eligible for the full annual amount of direct loans due to their program of study or amount of time they need to complete their degree, certificate or diploma. We adjust loans for:
- Graduates who are attending only one term of an academic year. This is most common for students who will graduate after the Fall term.
- Students enrolled in diploma programs that are less than 24 credits.
- Non credit programs (LPN, Massage Therapy, Police Academy)