Frequently Asked Questions on Loans

Q - What is a Stafford Loan?
A loan backed by the federal government awarded to a student.

Q - Do I have to pay back the Stafford Loan?
Yes. Your payments will start 6 months after you graduate or drop below 6 credit hours per semester.

Q - What is the difference between a subsidized loan and an unsubsidized loan?
A subsidized loan does not start accruing interest until you graduate or drop below 6 hours during the semester. An unsubsidized loan starts accruing interest immediately, but you will only have to make payment on the interest every 3 months. After you graduate or drop below 6 credit hours you will begin full repayment on the principal and interest.

Q - What is an "entrance interview"?
First-time borrowers will be required to complete the entrance interview online at: www.dlssonline.com/exitcounseling/ecec-main.asp. After you printout the required documentation from this web site, please sign it, date it, put your Tech ID Number (T#) on it, and turn it in to the Financial Aid Office.

Q - Do I have to go through the entrance interview each time I get a loan?
No. Entrance interviews are for first-time borrowers at Tennessee Tech University only.

Q - What if I reject my loan on my award letter but later decide I need the loan?
Just come into the Financial Aid Office or call the loan counselor listed below.

Q - What is the interest rate on student loans?
Interest rates are no longer variable but fixed. The interest rate for Stafford Loans is 6.8%. The interest rate for Perkins loans is 5%. The Parent Loans' interest rate is 8.5%.

Q - When will I go into repayment of my student loan?
Stafford Loans go into repayment 6 months after you graduate or drop below 6 credit hours. If you decide to go on co-op, you will begin using your grace period and will go into repayment in 6 months. Perkins Loans will go into repayment 9 months after you graduate or drop below 6 credit hours.

Q - What is a promissory note?
A legally binding document between you and the Department of Education. By signing the Promissory Note you are taking full responsibility for your loans. You must pay them back.

Q - Will I receive a promissory note each time I get a student loan?
Not for a Stafford Direct Loan. You should only sign one, the first time you begin borrowing Direct Loans. The Perkins Loans require a new promissory note each time you receive one.

Q - How many hours do I have to be registered for to get a student loan?
At least 6 credit hours.

Q - Can anyone get a student loan?
Yes, if you apply for it (FAFSA) and are not in default of a previous student loan. What type of loan you are offered will depend on your financial need.

Q - How do I apply for a student loan?
The first step is filing a FAFSA. Please see the section entitled Financial Aid 1010

Q - Does a Perkins Loan (NDSL) have to be repaid?
It depends on where you obtain employment after graduation. If you teach in a low income, rural area school you may not have to pay the loan back. Likewise, you may not be required to pay back the loan if you are a nurse or a person in certain areas of law enforcement (see Bursar's Office ). If this does not apply to you then you will begin repaying your Perkins Loan 9 months after you graduate or fall below 6 credit hours.

Q - What if I go into default on my student loan(s)?
You will be ineligible for further financial aid, the federal government will keep any tax refunds, and your wages can be garnished. It will be hard to obtain other loans such as mortgages, auto loans, etc. Don't default!

Q - How do I defer my student loan(s)?
Contact Direct Lending or the Financial Aid Office to see if you qualify. You will need to obtain the proper paperwork to complete then get the paperwork to our Records Office to finish their part, completing and Records will mail the forms in for you.

Q - I will graduate soon and I have had student loans, do I have to do anything special?
Yes. You need to do an "exit interview."

Q - What is an "exit interview" ?
This is a short session that explains to you that your loan is about to go into payment and what you need to do about it. You can complete the exit interview online at: www.dlssonline.com/exitcounseling/ecec-main.asp. After you printout the required documentation from this website please sign it, date it, put your Social Security Number on it, and hand it in to the Financial Aid Office.

Q - What happens if I have a student loan and then drop below 6 credit hours in a semester?
The Financial Aid Director will determine if any money is owed back to the school and you will be notified of the amount you must repay, if any.

Q - Do I need a co-signer?
No.

Q- How do I find out the status of my Parent PLUS or alternative student loan?

It is now easy to check on the status of your Parent Plus loan or your alternative student loan. We are now using ELM Resources, www.elmresources.com, to certify our loans electronically. You may access their site, and easily find out the status of your alternative or PLUS loan.

If you have any questions not addressed here please contact Kathy Hammons at 931-372-3923 or khammons@tntech.edu.

Important Links for Loan Questions

Entrance/Exit Counseling
Managing your educational expenses and understanding your rights and responsibilities

For Students - Borrower Account Link

Loan Locator - track student loans

Direct Loan Consolidation Web Site