Types of Loans

The following is a list of the available loans, both Federal and State, which students can apply for.

Federal Direct Loan Program (Subsidized and Unsubsidized)
Federal Parent Loan for Undergraduate Students (PLUS)
Texas B-On-Time Loan Program (BOT)

Federal Direct Loan Program (Subsidized and Unsubsidized)

There are two types of loans in the Stafford program: subsidized and unsubsidized. The difference is that the subsidized loan is a need based program and the Federal government pays the interest during in-school status, grace periods and authorized deferment periods. As a result, subsidized loans are advantageous because they don't cost as much to repay. The unsubsidized is not need based and the borrower is responsible for paying the interest during these loan periods, although payments of principal are not due until after the close of the borrower's grace period. Both programs provide low interest deferred payment loans to students to assist with their educational expenses.

Purpose of the Program

The Federal Stafford Loan program federally guarantees repayment through the State Guarantee Agency, Texas Guaranteed Student Loan Corporation (TGSLC) to the lending institution should the student borrower default. This ability to borrow helps students meet the cost of post-secondary education. This program is administered by the institution and the Department of Education. Stafford Loan recipients must be enrolled at least half-time.

Determining Eligibility

In order to determine eligibility for any Federal Financial Aid program, students must file a Free Application for Federal Student Aid (FAFSA) and/or the Texas Application for Student Financial Aid (TASFA) and have the results sent to CC. The FAO must have an official EFC before eligibility for any fund may be determined. In addition, the student must have supplied any other requested documentation to the FAO and his or her application must be validated. A Stafford Loan is awarded to a student, once the student completes a student loan request, and after the student's eligibility for Federal Pell Grant and other Financial Aid has been evaluated.
Students are notified of the amount of their Stafford Loan eligibility and disbursement date by receiving notification that their loan has been certified.

Certification of Loan Applications

Loan certification will not be completed until:

1. Data from the National Student Loan Data System (NSLDS) is received.
2. Documentation of dependency status is on file.
3. Verification is complete.
4. All other financial assistance is reported.
5. Financial Aid application has been processed and is complete.

Stafford loans will not be awarded after the last day to receive a "W" for any semester. These dates are published in each semester's class schedule.

The CC FAO uses a standard academic year (Fall through Spring) with Summer as a trailer when certifying loans. The minimum loan period is a single academic semester. A loan period can not exceed a 12 month period. However, a student can have more than one loan in an academic year up to the annual loan limit.

Clarendon College does not automatically initiate loan awards. Student or parent borrowers must apply through Department of Education Direct Loan system at https://studentloans.gov.

Returning Funds to Department of Education

The FAO is responsible for returning funds to the Department of Education if the student is not registered, if the institution cannot document student's attendance in any class, or if the disbursement is received after student has ceased to maintain eligibility.

Maximum Awards

For loan purposes, a student's classification will be determined by the number of hours completed towards his or her selected degree or certificate. A student's classification will not be re-evaluated until the beginning of the next academic year (Fall through Summer). Once the student has reached the annual loan limit, he or she cannot receive another loan until he or she begins another academic year.

A student can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as the annual loan limits are not exceeded.

A dependent undergraduate student (excluding students whose parents cannot borrow PLUS Loans [a parent loan]), each year can borrow up to:

• $5,500 (for loans first disbursed on or after July 1, 2010) if a first-year student enrolled in a program of study that is at least a full academic year. No more than $3,500 of this amount can be in subsidized loans.
• $6,500 (for loans first disbursed on or after July 1, 2010) if completed the first year of study and the remainder of the program is at least a full academic year. No more than $4,500 of this amount can be in subsidized loans.

An independent undergraduate student (and dependent students whose parents have applied for but were unable to get a PLUS Loan [a parent loan]), each year can borrow up to:

• $9,500 (for loans first disbursed on or after July 1, 2010) if a first-year student enrolled in a program of study that is at least a full academic year. No more than $3,500 of this amount may be in subsidized loans.
• $10,500 (for loans first disbursed on or after July 1, 2010) if completed the first year of study and the remainder of the program is at least a full academic year. No more than $4,500 of this amount may be in subsidized loans.

Disbursement Procedures

Stafford Loan proceeds are released in multiple disbursements. Stafford Loan funds will be sent to CC via electronic funds transfer (EFT) and applied to the student's account. Once a student's account is credited and if there is a refund, the business office will mail a refund check to the student, or credit the student's debit card.

Pre-loan Counseling (Entrance Counseling)

Borrowers must complete entrance loan counseling and testing before receiving a loan each academic year. Rights and responsibilities are addressed. Students will be directed to complete this Federal requirement at https://studentloans.gov through the Department of Education website. Students may forward questions, comments and/or concerns to Financial Aid personnel who will answer and/or reply.

Exit Loan Counseling

Exit loan counseling and testing is required before the student ceases at least-half-time-enrollment. Students who fail to meet this requirement will be contacted by mail. Exit counseling is available online at www.mapping-your-future.org.

Report to Lender

The Financial Aid Office electronically submits the Student Status Confirmation Report (SSCR) through the National Student Loan Clearinghouse.


Parent Loan for Undergraduate Students (PLUS)

The Federal PLUS is a fixed interest loan created by the Federal government to help creditworthy parents pay for their dependent student's education beyond high school. Federal PLUS loans are not restricted to a student's financial need. The Department of Education will perform a standard credit check with a national credit bureau before approving the loan. If approved, the parent is responsible for paying the principal amount of the loan and all interest that accrues from the date of disbursement until the loan is paid in full. Repayment begins within 60 days after the loan is fully disbursed. The loan amount may not exceed the dependent student's cost of attendance minus other Financial Aid awarded for the loan period. If a student's parents cannot obtain a PLUS loan, the student is allowed to borrow additional unsubsidized Stafford money. The student must be enrolled at least half-time to receive a PLUS loan. To determine a student's eligibility for a PLUS loan, the student must complete a FAFSA. In addition a complete Financial Aid file is required before a PLUS loan will be certified. Interested students must complete a PLUS certification/authorization and PLUS request forms.


Texas B-On-Time Loan Program (BOT)

Purpose of the Program

The purpose of the Texas B-On-Time Loan program is to provide eligible Texas students no-interest loans to attend colleges and universities in Texas. If the student meets specified goals, the entire loan amount can be forgiven upon graduation.

Determining Eligibility

Complete the Free Application for Federal Student Aid (FAFSA). The financial aid office at the college or university the student applied to will notify the student if he/she is eligible. The BOT Loan is available to individuals who are:

a. Texas residents,
b. Graduated 2002-2003 academic year or later under the recommended high school program from public or accredited private high school in Texas or received an associate's degree from an eligible institution no earlier than May 1, 2005
c. Has not earned a bachelor's degree,
d. Enrolled full time in an undergraduate degree or certificate program at an eligible institution,

To maintain eligibility for future disbursements, the student must:

In the 1st Academic Year - make satisfactory academic progress toward a degree or certificate as determined by the institution.

In the 2nd and Subsequent Academic Years - complete at least 75 % of the semester credit hours attempted in the most recent academic year and have a cumulative GPA of at least a 2.5 on a 4.0 scale (or the equivalent) on all course work previously attempted at institutions of higher education.

A student who receives a Texas B-On-Time Loan in one academic year is not guaranteed he or she will receive a new BOT loan in the following year or in subsequent years. A student may not receive B-On-Time loans for more than 150 hours.


As funding for the Texas B-On-Time Loan Program is limited, priority will be given to students who are eligible for TEXAS Grants but are not receiving a TEXAS Grant due to a shortage of funding in that program.