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A Federal Direct Student Loan is a low-interest loan provided by a private lending organization (i.e. bank). Repayment of the loan can be deferred until a student graduates, leaves school, or drops below half-time enrollment. There are two types of Direct Loans:

Subsidized loans are based on need and the federal government pays the interest while you are in school.

Unsubsidized loans are not need based, so they are available to students regardless of need. Students must pay the interest or "capitalize" it (i.e., add it to the principle) while they are in school.

Loan Eligibility Checklist:

  1. Must have already earned a minimum of 6 college level credits for eligibility to borrow a loan.
  2. Enrolled at least half-time (6 or more credit hours) at the time of loan disbursement.
  3. Enrolled in an eligible degree program at East Central College.
  4. Not currently in default on a prior student loan.
  5. Completed the FAFSA and submitted verification documents (if required).
  6. Maintain Satisfactory Academic Progress.

Loan Application Process:

  1. Meet with student loan advisor to discuss loan process and borrowing eligibility.
  2. Complete Direct Master Promissory Note.
  3. Complete Entrance Counseling

Loan Approval Process:

  1. Loan application is reviewed by the financial aid office.
  2. Loan is approved (certified) by the financial aid office if student meets criteria listed above in the Loan Eligibility Checklist.
  3. Certified loan application is sent to the lender and guarantee agency for approval.
  4. Approved loan funds are disbursed in two equal disbursements during the loan period.

Note: Students borrowing to assist with living expenses should have other resources available to assist them during the first month of the semester. Loan funds are generally not available to students until the 5th week of the semester.

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