Common Loan Questions
What does it mean to accept a student loan?
An educational loan is a serious commitment. Student loans must be paid back with interest and borrowers must make payments until the loan is repaid in full. The longer you take to pay off a loan, the more interest you will pay. If you borrow, make sure you do so with your eyes open.
What options should I consider before borrowing a student loan?
1) Check out scholarships, grants, and work-study programs;
2) Consider working part-time or full-time to cover your school expenses;
3) Consider borrowing less student loan money.
What kind of student loans are available?
For student borrowers at Palomar College, loans are available through the William D. Ford Federal Direct Loan Program. The loan program offers subsidized and unsubsidized Stafford loans.
A subsidized loan is certified on the basis of financial need determined by the Financial Aid Office. If you are eligible and have demonstrated financial need for a subsidized loan, the federal government pays the interest on the loan ("subsidizes" the loan) until you begin repayment and authorized periods of deferment.
An unsubsidized loan is not awarded on the basis of financial need. If you are eligible for an unsubsidized loan, you will be charged interest from the time the loan is disbursed until it is paid in full. You can choose to pay the interest or to allow it to accumulate (capitalize - that is, the interest will be added to the principal amount of your loan and will increase the amount you have to repay). If you pay the interest as it accumulates, you will repay less in the long run.
Student loan applicants at Palomar College can borrow the amounts listed below based on a full school year (i.e., Fall & Spring).
|
Subsidized/Unsubsidized |
|
| 1st year (under 30 units completed) |
$2,625.00 |
| 2nd year (over 30 units completed) |
$3,500.00 |
|
Special Additional Unsubsidized |
|
| 1st/2nd year |
$4,000.00 |
Note: See Financial Aid Office for additional information on borrowing the Special Additional Unsubsidized loan.
What is the interest rate on these loans?
For student loan borrowers whose loans were first disbursed on or after July1, 1994, the interest rate is variable, but will never exceed 8.25%. From June 30, 1999 through July 1, 2000, the interest for new student loans in repayment is 6.92%.
Is there a charge for these loans?
You will pay a fee of 3 percent, deducted from each disbursement of your loan.
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