Student Loans


Quick steps for a Direct Loan

  1. Complete the FAFSA for the appropriate aid year (2012-2013 for Summer 2013)
  2. Sign a Master Promissory Note (MPN) for Direct Loans using your Federal Student Aid PIN at StudentLoans.gov
  3. Complete Entrance Counseling for Direct Loans at StudentLoans.gov

General Direct Loan Information

How to Apply for a Direct Loan

How will I receive my Direct Loan?

What happens when I graduate or drop below half-time attendance?

How do I repay my Federal Direct Loan?

General Direct Loan Information

Federal Direct Loans are low-interest student loans that must be repaid after you graduate or drop below half-time enrollment. Direct Loans are a form of federal financial aid, and may only be received by students who are:

The Subsidized Direct Loan interest rate is a fixed rate of 3.4% for loans disbursed on between July 1, 2011 and June 30, 2013. Unsubsidized Direct Loans have a fixed interest rate of 6.8% for loans disbursed on or after July 1, 2006. Repayment begins six months after you graduate or drop below half-time enrollment. This six month grace period is to allow you time to find a job before repayment begins on your Direct Loan.

The Office of Student Financial Aid determines your eligibility for the Direct Loan based on the results of your FAFSA (Free Application for Federal Student Aid), cost of attendance, and other financial aid received. This includes agency payments such as Vocational Rehabilitation, Workforce Investment Act (WIA), Trade Assistance Act (TAA), and Veteran's Benefit's. It is the student's responsibility to notify the Financial Aid Office of any outside scholarships or agency payments.

Subsidized Direct Loan: You must have financial need (based on FAFSA results) to qualify for the Subsidized Direct Loan. You don't pay interest on a Subsidized Direct Loan while in school or during grace or deferment periods - the government pays it for you. Subsidized Direct Loans disbursed after July 1, 2009 have a 5.6% fixed interest rate.

Unsubsidized Direct Loan: This version of the Federal Direct Loan is not based on financial need. The borrower is responsible for all interest charges on an Unsubsidized Direct Loan from the time the loan is received. While you are not required to make payments while you're in school or during grace or deferment periods, we recommend that you pay interest quarterly. Any accrued interest that is not paid will be added (capitalized) to the loan balance when you enter repayment. Unsubsidized Direct Loans have a fixed interest rate of 6.8% for loans disbursed on or after July 1, 2006.

Annual Loan Limits:

Dalton State offers the base amounts for student loans. Students wishing to borrow more should complete the Loan Request Form. Federal Direct Loans for a 12-month period (Fall-Spring-Summer) are:

  • $3500 for freshmen
  • $4500 for sophomores
  • $5500 for students seeking a Bachelor's degree at the junior or senior level.

Grade level is determined by hours earned and not hours attempted; students in one year programs are considered freshmen regardless of attempted hours; students in two year programs may not exceed sophomore level regardless of attempted hours. Independent students may be eligible to borrow additional Unsubsidized Direct Loans of up to $6,000 per year at the freshman or sophomore level and up to $7,000 per year at the junior or senior level. Dependent students may be eligible to borrow $2,000 per year in additional Unsubsidized Direct Loan funds.

How to Apply for a Direct Loan

Step 1: FAFSA - Complete the Free Application for Federal Student Aid (FAFSA) and have the results sent to Dalton State College (school code 003956). You may complete the FAFSA online at www.fafsa.ed.gov. Indicate on the FAFSA that you wish to be considered for student loans. Dalton State must have the results of your FAFSA and your application must be complete before we will process a loan application.

Step 2: Complete Entrance Counseling for first-time borrowers at Dalton State College

  1. Direct Loan Entrance Counseling must be completed online at www.StudentLoans.gov. Staff members in the Office of Student Financial Aid are available to answer questions after entrance counseling is complete. Students are encouraged to ask questions to ensure full understanding of the Federal Direct Loan program.
  2. Disbursement delay for first-time freshmen - First-time freshmen loan proceeds are disbursed no earlier than 30 days after the first day of classes.

Step 3: Master Promissory Note (MPN) online- All students borrowing student loans must complete a Master Promissory Note for Direct Loans. The Master Promissory Note can be completed online at www.StudentLoans.gov.

If you have previously borrowed a Student Loan at Dalton State College and have been offered a Student Loan on your current award letter, indicate on your DSConnect on-line award letter if you wish to accept or decline the loan. If you wish to make changes to the loan amount or if your current award letter does not have a Student Loan offer please complete the Student Loan Request Form. PDF

If you wish to use a paper application to apply for a Direct Loan, please contact the Office of Student Financial Aid at (706) 272-4545 or (800) 829-4436. The paper application process may take an additional 2-4 weeks in processing time.

After you have completed your part of the process, the office of Student Financial Aid calculates your eligibility for the Federal Direct Loan based on your FAFSA results, cost of attendance, and other financial aid received. The office of Student Financial Aid electronically transmits your Direct Loan eligibility. Once we have received confirmation of your eligibility for the loan, your loan funds are sent electronically to Dalton State.

How will I receive my Direct Loan?

Federal regulations require Direct Loans to be split into at least two equal payments. If your loan is a two-semester loan, this simply means that the first half of the loan will be sent during the first term, and the second disbursement will be sent at the beginning of the second term. One-semester loans are also split into two payments: 1st half of the loan at the beginning of the term (or 30 days after the term begins for freshmen borrowers) and the 2nd half at the midpoint of the semester. Your loan disbursements will be reduced by an origination fee of up to 1% and a default fee of up to 1%.

Before Direct Loans are applied to your Dalton State account, the Office of Student Financial Aid must verify that you are 1) enrolled at least half-time, 2) attending classes, and 3) making Financial Aid Satisfactory Academic Progress.

Any balance due Dalton State College for tuition, fees. bookstore. or housing charges must be paid out of your loan proceeds. If there is a remaining balance after Dalton State College charges are paid, the earliest a refund may be received is during the second week of classes. Financial aid refunds for Dalton State students will be issued through Higher One, Inc., a one-card banking and electronic funds disbursement system. New students will be mailed a DSOne card (Higher One-issued debit card) and returning students should already have a DSOne card (formerly called Higher One card). If you are a returning student and have misplaced your DSOne card, contact the Business Office at 706-272-4435.

Students are allowed to choose the method of refund at www.DaltonStateOne.com from the following choices: 1) Refund balance placed into your DSOne account. You may use your debit card to withdraw funds at an ATM machine on campus or compatible off-campus ATMs (limit of $500 per day), or as a debit card at merchants that accept MasterCard; or 2) Direct deposit into an existing checking or savings account.

What happens when I graduate or drop below half-time attendance?

One of your responsibilities as a Direct Loan borrower is to notify your lender when you graduate or drop below half-time enrollment. You are also responsible for notifying your lender when you change address, phone number, or name. Your lender will notify you of repayment terms, including the date of your first payment, monthly payment amount, and repayment options.

Dalton State College reports student enrollment status to lenders through the National Student Loan Clearinghouse once a month.

Students are required to go through Direct Loan Exit Counseling when they graduate or drop below half-time enrollment at Dalton State College. Exit counseling informs you of the seriousness and importance of your obligation to repay your loans and describes the likely consequences of default. During exit counseling, you are given information regarding loan indebtedness, repayment options, debt management techniques, and your lender's phone number and address. Student records are put on a system-wide hold until Direct Loan Exit Counseling is completed.

When you graduate or don't return at the end of a term, exit counseling is required. If you withdraw from Dalton State College, you are required to go through Direct Loan exit counseling in the Financial Aid Office as part of the withdrawal process. This requirement must be completed before the withdrawal is official and may take up to an hour to complete.

How do I repay my Federal Direct Loan?

You are given a six month grace period after you graduate or drop below half-time enrollment before repayment begins on your Direct Loan. After the six month grace period ends, you go into repayment on your loan. However, if you wish to start paying early, there are no penalties for early payment.

Interest accrues on an Unsubsidized Federal Direct Loan from the time you receive the loan. try to pay interest quarterly to keep the total cost o the loan down. Any unpaid interest will be added to your loan balance, called capitalization, when you enter repayment. Estimated quarterly interest on a $1,000 Direct Loan at 6.8% interest is $17.00. Multiply $17 by the number of thousands you plan to borrow in Unsubsidized Direct Loans, to estimate the quarterly interest charge (i.e., if you're borrowing a $4,000 Unsubsidized Loan, quarterly interest would be: 4 x $17 = $68.00).

Repayment Period: You have up to 10 years to repay a Federal Direct Loan. The minimum monthly payment is $50 per month. Use the following chart to estimate how much your monthly repayment will be.

Amount Borrowed # of Payments at 6.8% fixed interest rate
$3,500 95 $50.00
$5,500 120 $67.46
$7,500 120 $91.99
$10,000 120 $122.65
$15,000 120 $183.98
$20,000 120 $245.31
$25,000 120 $306.63
$30,000 120 $367.96
$40,000 120 $490.61

Repayment Options: Contact your lender when you have questions about your Direct Loan or experience problems repaying your loan. It is in your best interest, as well as your lender's best interest, to keep your loan in good standing. Some options that might be available to you during repayment are:

Deferment - No payments are due on your Direct Loan if you are granted a deferment. If you have borrowed Subsidized Direct Loans, no interest accrues on these loans during deferment periods. The most common deferment is for re-enrolling in college at last half-time. However, there are also deferments for inability to find full-time employment (for up to three years) and economic hardship (for up to three years). Check with your lender if you have questions regarding deferments or want to apply for a deferment.

Forbearance - If you can't afford to make payments on your student loan, but don't qualify for a deferment, contact your lender regarding forbearance. If approved, forbearance allows you to postpone repayment for a period of time. However, interest continues to accrue during periods of forbearance. Contact your lender if you have questions regarding forbearance or wish to request a period of forbearance.

Student Loan Consolidation - Consolidation allows you to combine all of your federal student loans into one consolidation loan. You may want to consider consolidation if you send in more than one monthly student loan payment, or want to lower your monthly payment. Consolidation lengthens your repayment period and reduces your monthly payment. However, as with any loan spread out over a longer repayment period, you may pay more interest if you take longer to repay the loan. You may also loose out on some of the benefits offered by your Direct Loan lender; contact the Financial Aid Office for more information on consolidation.

Consequences of Defaulting on your Federal Direct Loan:

Failure to repay your loan according to terms disclosed in your master Promissory Note (MPN) results in default. Student loans go into default when payments are 270 days past due. To avoid default, contact your lender if you're having trouble making your monthly payment. They will give you options to keep from defaulting on your loan.

Consequences of defaulting on your federal Direct Loan are:

  • You can be sued for the entire amount of your student loan.
  • Your credit rating can be severely damaged, making it difficult to borrow money in the future.
  • Your federal and state income tax refunds may be withheld.
  • Your wages may be garnished.
  • You cannot receive anymore federal or state financial aid unless you make satisfactory arrangements to repay your loan.
  • You may be liable for the costs associated with collecting your loan, including court costs and attorney fees.
  • YOU ARE STILL RESPONSIBLE FOR YOUR LOAN!
Dalton State, 650 College Drive, Dalton, GA 30720
706.272.4436 • 1.800.829.4436 • www.daltonstate.edu