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Loans can be a crucial part of a student’s financial aid award. Unlike grants and scholarships, student loans need to be repaid with interest. Students should only borrow as much as they need to cover their educational expenses.

Types of Loans

There are two types of loans: Federal Direct Loans and alternative loans.

Federal Direct Loans are issued by the U.S. Department of Education rather than a bank or other financial institution. They include Subsidized Loans, which do not accrue interest during your education, and Unsubsidized Loans, which begin accruing interest immediately. Federal Direct Loans are low-interest loans and can bridge the gap between how much you receive in grants and scholarships and the total cost of your education.

Alternative loans can help pay the remaining costs of college when all other types of financial aid (grants, loans and work programs) are not enough. Alternative loans are a last resort and should be utilized only after all other financial aid resources have been exhausted. HACC does not promote any specific lender recommendations. We encourage you to research interest rates, customer service, borrower benefits and repayment incentives for various lenders.

Loan Limits

There are limits on how much a student can borrow under the Federal Direct Loan programs. Please see this webpage for details.

Important Reminders about Loans
  • For most borrowers, a student loan is a long-term commitment. Do not borrow more than you need or can reasonably repay.
  • Be realistic about how much you need to cover your educational expenses.
  • The more you borrow, the more you will owe. Higher payments may make it difficult to pay off your loan, which can lead to default.
  • Research starting salaries for recent graduates in your field of study and make sure your potential earnings will support your anticipated expenses, including your loan repayments.
  • Unlike other personal debt, student loan debt is not generally forgiven in cases of bankruptcy.
  • Direct Loans have aggregate limits, in addition to their annual limits. If you plan to transfer to a four-year school or attend college on a part-time basis after HACC, plan your borrowing so you have enough funds to complete your HACC credential and your next degree.