FAQs on Loans
Q - What is a FEDERAL DIRECT Stafford Loan?
A loan backed by the federal government awarded to a student.
Q - Do I have to pay back the Federal direct Stafford Loan?
Yes. Your payments will start after you graduate or drop below 6 hours per semester once your 6 month grace period has been exhausted.
Q - What is the difference between a FEDERAL DIRECT subsidized loan and a FEDERAL DIRECT 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 the option to pay the interest every 3 months. After you graduate or drop below 6 credit hours, you will begin full repayment on the principal and interest once your 6 month grace period has been exhausted.
Q - What is "entrance COUNSELING"?
First-time borrowers will be required to complete the Entrance Counseling online at:
Q - What is financial awareness counseling?
First time borrowers will be asked to complete Financial Awareness Counseling. This provides very important tools and information to help you understand your Financial Aid and manage your finances to avoid delinquency and default with your student loans. This is separate and in addition to any REQUIRED Entrance or Exit Counseling. Financial Awareness Counseling does NOT replace the Entrance Counseling requirement. It can take 2 to 4 weeks for this requirement to show as completed on your student account. This will not delay the disbursement of your aid in any way. The Financial Awareness Counseling can be completed at:
Q - Do I have to go through the entrance COUNSELING each time I get a loan?
No. Entrance Counseling is for first-time borrowers at Tennessee Tech University only. If you previously completed one for another institution, it will be requested that you complete a new one for Tennessee Tech University.
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 email your request to firstname.lastname@example.org.
Q - What is the interest rate on student loans?
Interest rates are no longer variable but fixed. The interest rate for Federal Direct Stafford Loans: for Undergraduate Students it is 4.45% and for Graduate Students it is 6.00%. The interest rate for Perkins loans is 5%. The Parent PLUS and Grad PLUS Loans have an interest rate of 7.00%.
Q - When will I go into repayment of my student loan?
Federal Direct Stafford Loans go into repayment after you graduate or drop below 6 credit hours once your 6 month grace period has been exhausted. 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 MASTER promissory note?
A legally binding document between you and the Department of Education. By signing the Master Promissory Note you are taking full responsibility for your loans. You must pay them back - Access the Master Promissory Note by clicking here.
Q - Will I need to complete a master promissory note each time I accept a student loan?
Not for a Federal Direct Stafford Loan. You should only sign one, the first time you begin borrowing Direct Loans. The Perkins Loans require a new Master Promissory note each time you receive a loan.
Q - How many hours do I have to be registered for to receive a student loan?
At least 6 credit hours for undergraduates and 5 credit hours minimum for graduate students.
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. Graduate students are NOT eligible for Federal Direct Subsidized Stafford Loans.
Q - How do I apply for a student loan?
The first step is filing a FAFSA. Please see the section entitled Complete a FAFSA.
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 (get from bursar) ). 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 - Who is my loan servicer?
Federal Direct Loan borrowers may go to http://nslds.ed.gov to view details concerning who their loan servicer is, as well as, additional information on those loans.
Q - How do I defer my federal direct Stafford loan(s)?
You will need to contact your loan servicer and request an in-school deferment if you are unsure who your loan servicer is, this information is provided for you at http://nslds.ed.gov . Once you have contacted your loan servicer, they will provide you with an in-school deferment form and instruction on how to proceed. If enrollment verification is required by your loan servicer contact the Tennessee Tech Office of the Registrar. You may also refer your loan servicer to email@example.com if additional information is needed.
Q - I will graduate soon and I have had federal direct student loans, do I have to do anything special?
Yes. You need to complete Exit Counseling.
Q - What is exit counseling?
This is a short session that explains to you that your loan is about to go into re-payment and what you need to do about it. You can complete Exit Counseling online at http://www.studentloans.gov
Q - What happens if I have a federal direct 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. Next, you must complete Exit Counseling.
Q - Do I need a co-signer?
A co-signer is not required for Federal Direct Stafford Loans. One may be required for an Alternative Loan acquired through a private lender.
Q- How do I find out the status of my Parent PLUS or alternative student loan?
To check the status of alternative loans you can contact Geneva Phillips (firstname.lastname@example.org). To check the status of PLUS loans, check your Eagle Online account.
If you have any questions concerning Alternative, Federal Direct Stafford or PLUS loans, please contact Geneva Phillips at email@example.com.
If you have any questions about these topics: Entrance Counseling, Exit Counseling, Financial Awareness Counseling, Master Promissory Note or Direct Loan Consolidation - here is the link with all the information to assist you: https://www.studentloans.gov/myDirectLoan/index.action
To locate your Loan Servicer: