Loans are financial aid that must be repaid with interest at a future date. You must be attending at least half time (6 credits or more per semester) and be in good academic standing with financial aid to receive any loan.

Recent announcements made by the Federal Government:

Note from Federal Student Aid (FSA): Congress recently passed a law preventing further extensions of the payment pause. Student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October. We will notify borrowers well before payments restart. 

Here are six ways a borrower can prepare for Federal student loan repayment to begin again this fall.

Federal Direct Loans

The federal government’s Direct Loan program provides low-interest, long-term loans directly to students and parents. The lender (or guarantor) is the U.S. Department of Education (ED) rather than a bank. Loans guaranteed by the federal government have better interest rates and payback terms than private loans available through a bank.

Repayment of the loan usually begins six months after you graduate, withdraw from classes, or drop below six credit hours during the semester (less than half time).

Direct Subsidized Loan

These loans are available to students who demonstrate financial need on the FAFSA (Free Application for Federal Student Aid). The federal government pays the loan interest while you attend college and during your six-month grace period.

Direct Unsubsidized Loan

These loans are available to all students who are eligible for federal student aid through the FAFSA. Unlike subsidized loans, you do not have to demonstrate financial need to be eligible for it. The loan accrues interest as soon as it is disbursed and for the lifetime of the loan (until it is paid off).

Direct Parent PLUS Loan

These loans are available to parents of dependent students who enroll at least half time (six credit hours per semester) and are in good academic standing with the school. This loan cannot exceed the total cost of attendance minus any other financial aid awards. The parent is responsible for repaying the loan plus interest. The parent’s credit history will be checked by the U.S. Department of Education (ED).

If a parent is denied the Parent PLUS Loan by ED, the dependent student is able to borrow additional Direct Unsubsidized Loan amounts. Please be aware ED can require a parent to do PLUS Loan counseling if there is adverse credit history.

To apply for a Parent PLUS Loan: A FAFSA must be completed for the student, and the parent must complete the steps to request a Direct PLUS Loan on the Federal Student Aid website.

Interest Rates for Direct Loans

First disbursed on or after July 1, 2023, and before July 1, 2024. Learn more about federal interest rates and fees for direct loans.

Loan Type Borrower Type Fixed Interest Rate
Direct Subsidized Loans Undergraduate 5.50%
Direct Unsubsidized Loans Undergraduate 5.50%
Direct PLUS Loans Dependent Parents Only 8.05%

Maximum Loan Debt

The federal government sets yearly and lifetime maximum loan amounts. If you are unsure of your loan debt, you may check with the National Student Loan Data System (NSLDS). The NSLDS website will also list your loan servicer’s contact information, which is the entity that manages the billing and other services of your federal student loan(s). NSLDS will have the federal loans you have borrowed but not private loans.

How to get federal loans disbursed

  1. Complete ACC’s financial aid application steps.
  2. Register for at least 6 credits from an approved degree plan during the semester (half-time status).
  3. Maintain academic standards of progress for financial aid students.
  4. Not be in default on any federal student loan or owe a Federal Grant Overpayment.
  5. Complete online entrance counseling and a master promissory note. Follow these instructions for guidance.

Want to know when your loan funds will be disbursed? Check out the disbursement schedule.

If you need help with budgeting your funds, please contact ACC’s Student Money Management Office. They have a great semester budget template.

Cohort Default Rate

cohort default rate (CDR) is the percentage of a school’s borrowers who enter repayment during a federal fiscal year and then default or meet other specified conditions prior to the end of the third following fiscal year. Please refer to the Cohort Default Rate Guide for a detailed description of cohort default rates and how the rates are calculated.

Austin Community College District Cohort Default Rates (CDR)

  FY20 FY19 FY18
Default Rate 0 3.0 9.9
Number in Default 0 111 38
Number in Repay 3,768 3,615 3,858
Enrollment Figures 63,569 58,856 62,493
Percentage Calculation 5.93 6.14 6.17

ACC’s FY 2020 CDR is 0%. The national rate FY 2020 CDR is 0%. 

Median cumulative federal student loan debt ACC is $10,499. The average monthly loan payment is $111 per the standard 10-year loan repayment plan.

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