Loans
Federal Direct Loans
Federal Direct loans are a type of financial aid designed to help students pay for their education. Federal Direct loans may cover expenses such as tuition, fees, room and board, and other costs associated with attending school referred to as Cost of Attendance. Students have the option to apply for an educational loan which must be repaid with accrued interest based on the annual percentage rate (APR) at the time of the loan payment. Many students apply for federal government loans to assist with financing their educational path. Taking out a student loan is a significant financial investment and commitment, it’s important to understand the terms and conditions before borrowing.
Direct Student Loans are low-interest loans offered by the US Department of Education to help eligible students cover the cost of their education at a four-year college or university, community college or trade, career or technical school. Direct Student Loans and Parent Plus Loans have a lower interest rate than most Private Loans.
Before Federal Direct Loans, Consider Grants and Scholarships
- There are three main sources of eligible funding called grants that reduce the student's need to borrow loans and/or lessen the burden on other family financial sources. These grants are a type of funding that can come from Federal, State and Institutional opportunities.
- Navigate RTC’s additional resources by visiting our Paying for College website.
- School scholarships are financial awards given to students to help cover the cost
of their education. These scholarships can come from various sources and are typically
based on different criteria.
- Foundation (Internal): The RTC Foundation provides over 50 different scholarships for students in various programs. These scholarships are designed to help cover tuition and other educational expenses. Applications for Foundation scholarships open at different times throughout the year, including Winter, Spring, and Fall quarters.
- Library (External): The RTC Library offers resources and guidance for finding external scholarships. Students can access databases and tools like Sallie Mae's Wired Scholar, FastWeb, and the Washington Scholarship Coalition to search for scholarships based on their field of study and other criteria.
Different Types of Federal Direct Loans
- Subsidized: Subsidized loans are Federal loans that are offered to undergraduate students with financial need. The federal government pays the interest on the subsidized loan while the borrower is currently enrolled in school for 6 or more credits and during certain periods when borrowers are authorized to have the borrower’s loans deferred.
- Unsubsidized: Unsubsidized loans are offered to students regardless of their financial need. While borrowers are attending school, the unsubsidized loan accrues interest. Students have the option to pay the interest while attending school. Paying the interest while in school reduces the accumulated interest on the life time of the loan.
- Parent Loan for Undergraduate Students (PLUS): PLUS loan is a federal student loan program available to parents of dependent undergraduate students to help cover the costs of their child’s education. Unlike other federal loan student loans, the PLUS loan is taken out by the parent, not the student. Under the Direct Loan program, a parent and/or stepparent of the dependent undergraduate student can request this loan. Parents can borrow as much as is needed to cover the difference between the cost of attendance and the financial aid that had been offered to the student.
The maximum amount a student may request/receive each academic year depends on different factors, see chart below for amounts. Please refer to the Federal student aid guidelines to learn about annual undergraduate loan limit.
| Year in College | Dependent Maximums | Independent Maximums | ||||
|---|---|---|---|---|---|---|
| Type of Loan | Subsidized | Unsubsidized | Total | Subsidized | Unsubsidized | Total |
| First Year* | $3,500 | $2,000 | $5,500 | $3,500 | $6,000 | $9,500 |
| Second Year** | $4,500 | $2,000 | $6,500 | $4,500 | $6,000 | $10,500 |
| Third Year (BAS) | $5,500 | $2,000 | $7,500 | $5,500 | $7,000 | $12,500 |
| Pre-requisites | $2,625 | $2,625 | $2,625 | $6,000 | $8,865 | |
-
- *First Year is defined as any program with a published length of 4 quarters or less, or your first 4 quarters of core classes within a longer program.
- **Second Year is defined as any program with a published length of 5 or more quarters, and you are enrolled in your fifth quarter of core classes.
- Dependent Undergraduate Students are subject to an aggregate limit of $31,000 (maximum subsidized $23,000).
- Independent Undergraduate Students are subject to an aggregate limit of $57,500 (maximum subsidized $23,000).
- RTC does not accepted Graduate or Professional Direct PLUS Loan’s since RTC does not offer Graduate or Master Degree’s. Those who are interested in transferring to a University can inquire about Graduate or Professional Direct PLUS Loan via the Studentaid.gov website.
- Private Student Loans: A private or alternate student loan can help students pay for school if federal loans and other resources of financial aid fall short of covering college costs or when students have maxed out their financial aid eligibility. These loans come from banks, credit unions or online lenders. Interest rates tend to be higher than regular federal student loans. Disbursement of private student loans is determined by the lender after RTC Financial Aid Office verifies enrollment.
RTC encourages students to actively explore and utilize all institutional resources, as well as external funding opportunities available to support their academic and professional goals.
How to Apply for Direct Student Loan
Please login to your Federal Student Aid account and complete the following modules
- Entrance Counseling: Entrance loan counseling is a mandatory process for students who are taking out federal student loans for the first time. Its purpose is to provide you with important information about your rights and responsibilities as a borrower before you begin receiving loan funds. This helps ensure that you understand how to manage your loans responsibly from the outset.
- Master Promissory Note: A Master Promissory Note is a legal document that contains the Borrower’s Rights and Responsibilities and Terms and Conditions for repayment. Direct PLUS and Direct Subsidized and Unsubsidized loans have different MPNs. An MPN can also be good for up to 10 years if certain enrollment requirements are met. Therefore, if you leave school and return, you may be able to receive additional loans without signing a new MPN.
- Complete our Student Loan Request and Revision Form: The estimated processing time for a Federal Direct Student Loan application is approximately three to six weeks. Delays may occur if the borrower has not completed both Entrance Counseling and the Master Promissory Note at the time of submitting the Student Loan Request and Revision Form. Additional delays may also result if the student does not meet federal eligibility requirements, including enrollment in an eligible Title IV program and maintaining the required enrollment level (6+ credits) at RTC.
Grace Period
For certain types of federal student loans, a period (generally six months) after you graduate or drop below half–time enrollment during which you are not required to make payments. The repayment period for your loan begins after the end of the grace period.
Federal student loan borrowers are required to complete Exit Counseling when any of the circumstances outlined above apply. Exit Counseling provides essential information to help you prepare for loan repayment. During this process, you will review the terms and conditions of your federal student loans, explore available repayment options, and understand the importance of staying in good standing to avoid default.
*Parent PLUS Loan borrowers are not required to complete Exit Counseling.
What happens if I return to school?
If you return to school on at least a half-time basis before the end of your six-month grace period, your loans will return to in-school status. You won’t have to make payments until six months after you graduate, leave school, or drop below half- time enrollment.
If you return to school on at least a half-time basis after your six-month grace period has ended, you’ll qualify for an in-school deferment and won’t have to make payments while you remain enrolled at least half-time. However, when you graduate, leave school, or drop below half-time enrollment, your in-school deferment will end, and you’ll be required to begin making payments right away.
Strategies for Avoiding Delinquency and Default
Finish your program and graduate:
When you graduate, you are more likely to increase your employability, career options, and potential income. However, making smart choices about your occupation and career path can also ensure you have the resources to meet your federal student loan obligations.
Pay on time:
It is very important that you make your federal student loan payments on time. Contact your loan servicer if you think you will have trouble making your payments or won’t be able to pay on time.
Stay in touch with your loan servicer:
Visiting your servicer’s website using their online payment options and signing up for electronic correspondence can help ensure that you never miss a letter or bill. Open all your mail and read everything about your federal student loan(s). Contact your loan servicer before you miss a payment on your federal student loan(s). Your loan servicer can explain your repayment options so you can avoid missing a payment. If you are not sure of your loan servicer or need other information about your loans, please log in to your account at StudentAid.gov.
Have questions about how to start your current Federal Direct Loan repayment? Are your current Federal Direct Loans in Default, Deferment or Forbearance? Call our partners at Student Connections: 866-311-9450.
Our school has teamed up with Student Connections to help you with your student loans! Student Connections helps students manage their federal student loans. This service is completely free for you.
Contact Student Connections to:
- Find your loan balance and monthly payment amount
- Discuss available repayment plans
- Explore options to reduce or delay your payments
Visit My.StudentConnections.com or talk to a Borrower Advocate for free at (866) 311-9450.
About Student Connections
Student Connections is passionate about helping students. They partner with schools to provide support for borrowers throughout the student loan repayment process. With more than 60 years of experience in counseling student loan borrowers, their primary goal is to help you find the repayment plan that best fits your needs.
While you are in student loan repayment, Student Connections may contact you through emails, text messages and phone calls to:
- Help you understand your loan obligations and responsibilities.
- Discuss available options for an affordable repayment plan.
- Ensure you are aware of repayment options during financial hardships.
Note: Due to Federal privacy regulations, when Student Connections calls they will ask you to verify up to two pieces of personally identifiable information to ensure they are speaking with the correct person.
Cohort Default Rate (CDR) Update to 2019-2021:
|
|
FY 2019 |
FY 2020 |
FY 2021 |
|
No. in Default |
4 |
0 |
0 |
|
No. in Repayment |
247 |
188 |
176 |
|
Enrollment Figures* |
9356 |
8855 |
7559 |
*Enrollment Figures collected from RTC’s Institution Research and Effectiveness Head Count & FTE Overview Report
****For comparison to the national average cohort default rate - Partner Eligibility and Oversight Group FY 2017 Official Cohort Default Rates
OPEID:010434Note: Financial Aid terms including limits, eligibility, interest rates and repayment options, are regulated by the U.S. Department of Education and are subject to change. For the most recent information and updates, consult the Federal Student Aid Office of the U.S. Department of Education website. Our content is for informational purposes only and is not intended as legal, tax or financial advice.