Federal Direct Loans

Financial aid image collection students, galveston beach, and nursing students

Available Loans

Program Director/Program Coordinator

Meghann Nash


Title Director of Financial Aid
Room M-170
Program Area Financial Aid
Phone 409-944-1238
Email mnash@gc.edu
Financial Aid  Email finaid@gc.edu


Federal Direct Subsidized Stafford Loans

Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college. Subsidized loans are low-interest loans for financially needy undergraduate students. Interest does not accrue while the student is in school and during certain periods. You must have financial need to receive Direct Subsidized Loans.

Federal Direct Unsubsidized Stafford Loans


Direct Unsubsidized Loans are low-interest loans for undergraduate and graduate students. Students are responsible for the interest for the life of the loan, including when they are in school. Financial need is not a requirement to obtain a Direct Unsubsidized Loan.


Submitting an Application

Submitting an Application

First Step – Complete the Free Application for Federal Student Aid (FAFSA). Please note, you must complete a new FAFSA for each academic year. The academic year begins with the fall semester and ends with the summer semester at Galveston College.

***There are two FAFSA applications available***

2020-2021: This application is for the 2020-2021 academic year (Fall 2020, Spring & Summer 2021)

2021-2022: This application is for the 2021-2022 academic year (Fall 2021, Spring & Summer 2022)

Second Step – If you are requesting a Direct Subsidized or Unsubsidized Loan for the fall, spring or summer terms, please submit the Loan Request and Adjustment Form.

If you are requesting a PLUS loan, please log on to studentaid.gov and select “Apply for a PLUS Loan” under the “Apply for Aid” tab. Once your parent has received the confirmation please forward the email to finaid@gc.edu.


Third Step – Complete the Entrance Counseling by logging on to studentaid.gov and selecting “Complete Entrance Counseling” (Please choose undergraduate counseling type) under the “Complete Aid Process” tab.


Fourth Step – Submit the Loan Request and Adjustment Form and confirmation of your complete Loan Entrance Counseling to finaid@gc.edu. The forms, counseling confirmations, and status update request must come from your Galveston College Whitecaps email.


Fifth Step – Once your loan has been awarded, sign the Master Promissory Note (MPN) by logging on to studentaid.gov and selecting “Complete Master Promissory Note” (Please choose the subsidized/unsubsidized option.) under the “Complete Aid Process” tab. You are encouraged to download or print a copy of your MPN for your records. We recommend waiting until your loan award has been made before completing your MPN online.


**If you are having difficulty completing your MPN and Entrance Counseling, please call the government’s student helpline at 1-800-433-3243.


Student Eligibility Requirements

Must meet Title IV eligibility criteria as determined bycompleting the FAFSA
Must be enrolled in at least six (6) hours in an active eligibledegree program to be disbursed loan funds
First-time loan borrowers, per the federal government requirements, must have a 30-day delay hold from the first day of class before they are eligible to receive the first loan disbursement.


The loan disbursements will be issued as follows depending on the loan request:

Two equal disbursements in fall and spring
Two equal disbursements for fall only loan requests or spring only loans request
Two equal disbursements for summer. Each summer session is a separate semester for financial aid and requires an updated Loan Request and Adjustment Form.


Summer loans are the same as fall or spring, you must be enrolled at least six (6) credit hours in an active eligible degree program to be disbursed loan funds.


If you received the maximum loans during the Fall and Spring terms, additional loans are not available unless you advanced a grade level.


If you stop attending classes, if you drop below six (6) hours during any semester, if you do not complete six (6) hours at the end of the semester, or if you graduate, you will be required to complete the exit interview online at studentaid.gov.


Borrowers that must complete Exit Counseling 

Fall below half-time (6 credit hours)
Stop attending your classes
Have totally withdrawn from the institution, or have withdrawn and are now less than six (6) credit hours
Graduate from Galveston College

Complete the Exit Counseling by logging on to studentaid.govand selecting “Complete Exit Counseling” under the “Manage Loans” tab.


Responsible Borrowing

Before you take out a loan, it’s important to understand that a loan is a legal obligation that makes you responsible for repaying the amount you borrow with interest. Even though you don’t have to begin repaying your federal student loans right away, you shouldn’t wait to understand your responsibilities as a borrower.

Keep track of how much you’re borrowing. Think about how the amount of your loan(s)will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need for your school-related expenses.
Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can also use the U.S. Department of Labor’s Occupational Outlook Handbook or career search tool to research careers and salaries.
Understand the terms of your loan and keep copies of your loan documents. When you sign your promissory note, you are agreeing to repay the loan according to the terms of the note even if you don’t complete your education, can’t get a job after you complete the program, or you didn’t like the education you received.
Make payments on time. You are required to make payments on time even if you don’t receive a bill, repayment notice, or a reminder. You must pay the full amount required by your repayment plan, as partial payments do not fulfill your obligation to repay your student loan on time.
Keep in touch with your loan servicer. Notify your loan servicer when you graduate; withdraw from school; drop below half-time status; transfer to another school; or change your name, address, or Social Security number. You also should contact your servicer if you’re having trouble making your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing


Current Interest Rates

The interest rates for Direct Subsidized Loans and Direct Unsubsidized Loans are shown in the chart below.

Loan Type

Borrower Type

Interest rates for loans first disbursed on or after 7/1/20 and before 7/1/21

Direct Subsidized Loans and Direct Unsubsidized Loans



Direct Unsubsidized Loans

Graduate or Professional


Direct PLUS Loans



The interest rates shown above are fixed rates for the life of the loan.


Yearly and Lifetime Borrowing Limits


Dependent Students (except students whose parents are unable to obtain PLUS Loans)

Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)

First-Year Undergraduate Annual Loan Limit

$5,500—No more than $3,500 of this amount may be in subsidized loans.

$9,500—No more than $3,500 of this amount may be in subsidized loans.

Second-Year Undergraduate Annual Loan Limit

$6,500—No more than $4,500 of this amount may be in subsidized loans.

$10,500—No more than $4,500 of this amount may be in subsidized loans.

Third Year and Beyond  Undergraduate Annual Loan Limit

(Bachelor Degree Students Only)

$7,500—No more than $5,500 of this amount may be in subsidized loans.

$12,500—No more than $5,500 of this amount may be in subsidized loans.

Subsidized and Unsubsidized Aggregate Loan Limit

$31,000—No more than $23,000 of this amount may be in subsidized loans.

$57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.

Resources to Get Informed and Make a Plan

My Federal Student Aid

Borrowers can log in at studentaid.gov/login to view their federal student loan information, including loan balances, interest rates, and loan servicer contact information.

Loan Simulator

Borrowers can use the simulator tool at studentaid.gov to compare different monthly payment options based on their loan debt, income, and family size.

Student Loan Repayment

By visiting studentaid.gov borrowers can learn how to make payments on their loans; find the right repayment plan; figure out what to do if they can’t afford their payments; and see what circumstances might result in a loan being forgiven, canceled, or discharged.

Cohort Default Rate

A cohort default rate is the percentage of a school’s borrowers who enter repayment on Federal student loans during a federal fiscal year (October 1 to September 30) and default within the cohort default period. The United States Department of Education (ED) releases official cohort default rates once per year.

The Department of Education calculates the school’s cohort default rate by dividing the number of borrowers from the school entering repayment in a cohort year and default within a 3-year period divided by the number of borrowers from the school entering repayment in the cohort year.

Important Note: Some schools have a small number of borrowers entering repayment. Other schools have only a small portion of the student body taking out student loans. In such cases, the cohort default rate should be interpreted with caution as these rates may not be reflective of the entire school population.

Academic Year Cohort Official Cohort Default Rate

National Average

Official Cohort Default Rate

(Public Community College)

FY2017 13.3% 9.7%
FY2016 15.2% 10.1%
FY2015 16.7% 10.8%

** For more information go to Federal Student Aid for Official Cohort Default Rates for Schools.

Consequences of Default

Consequences of default for students can be severe. Outstanding interest on the loan is capitalized and collection fees may be added, often resulting in a balance that is higher than the amount initially borrowed. Defaulted loans are reported to credit bureaus, causing borrowers to sustain long-term damage to their credit rating. A defaulter may also face difficulty in securing a mortgages or car loan, may have their wages garnished, and their federal income tax refunds and other federal benefits seized. Until the default is resolved (i.e. through rehabilitation or garnishment), collection efforts continue, and the defaulter will be ineligible for additional federal student aid.