Riverland Community College

Federal Direct Subsidized and Unsubsidized Loans are federal student loans offered by the US Department of Education (DoE), under Title IV of the Higher Education Act to help eligible students cover the cost of higher education.

Subsidized loans are available to students who demonstrate Financial Need (FN).  The student is not charged interest on these loans while they are attending school at least half-time, (half-time is at least six credits), the DoE is subsidizing the interest. 

Unsubsidized loans do not have a Financial Need (FN) component, but still require at least half-time enrollment.  Interest begins being charged to the student as soon as the loan is fully disbursed.  It is optional for the student to make payments on the interest while they are still in school.

Additional information on Direct Loans such as borrowing limits, eligibility and interest rates is available here, https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized. For full terms and conditions, review the master promissory note.

Repayment of Federal Direct Loans begin six months after you graduate, withdraw, or drop below half-time enrollment.  This six-month span is referred to as the grace period.  The DoE will assign your loans to a loan servicer.  You will establish a payment plan through the servicer and make the monthly payments to them.  Once a servicer is assigned to you, it will be listed in the loan details on your studentaid.gov profile. 

Additional information on repayment plans is available at https://studentaid.gov/manage-loans/repayment/plans.

Once a Federal Direct Loan has entered repayment, it can be deferred for various reasons specified by law.  Borrowers may defer payments for the following reasons:

• Enrolled in school at least half-time
• Unemployment
• Economic hardship

The deferment would be requested through the loan servicer.

It is important to contact your loan servicer immediately if you are having trouble making payments to discuss options available to you.  When you miss a payment, your loan will become delinquent.  Additional missed payments may cause your loan to go into default.  For additional information on delinquency and default, please visit https://studentaid.gov/manage-loans/default.

The DoE monitors default rates of borrowers by school based on three-year cohorts.  Riverland’s most recent (2019) three-year cohort default rate was 3.1. For more information about the national average Cohort Default rate, as well as specifics by institution type, visit Federal Student Aid's default management site.