Loans

​​​​​​​​​​Student loans are available to students and parents to cover educational expenses. When all other forms of aid have been exhausted, student loans can be a good option. However, it is important to remember that student loans are intended to finance education and not lifestyle. Student loans are real money that must be repaid, with interest, so students should borrow only what they need.

William D. Ford Federal Direct Loan Program

Federal student loans usually offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources. Repayment of the loan begins six months after you graduate from college or stop attending at least half-time. The interest rate for undergraduate students receiving Direct Federal Subsidized or Unsubsidized Loans first disbursed on or after July 1, 2023 and prior to July 1, 2024 is 5.50%. You can view your loan history online at the National Student Loan Data System (NSLDS) website.

To receive a Federal Direct Loan you must:

• Complete the FAFSA and other documents your school request
• Enrolled and attending on at least a halftime basis (six credit hours during the Fall and Spring terms, and in at least four credit hours during the Summer)
  
• Complete Entrance Counseling
• Sign a Master Promissory Note

Annual Loan Limits

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Estimating Loan Repayment and Repayment Options

Federal vs. Private (Alternative) Loan Options

Loan Deferment or Forbearance Options (Having Trouble Making Payments)​

Federal Direct Subsidized Loan

This Direct Subsidized Loan is available to students with financial need. The loans are funded by the U.S. Department of Education and administered by Des Moines Area Community College. Eligibility is determined by the FAFSA. Students must be enrolled in at least a half-time status. The interest for a subsidized loan first disbursed on or after July 1, 2023 and prior to July 1, 2024 is 5.50% and is paid by the government while the student remains enrolled in at least half-time as well as during the first six months after the student leaves school. Students need to start repaying this loan six months after graduation, or if the student drops below half-time enrollment. More information regarding eligibility can be found at: Federal Student Aid: Low Interest Loans

Federal Direct Unsubsidized Loan

Federal Direct Loans are student loans that are funded by the US Department of Education and administered by Des Moines Area Community College. Eligibility is determined by the FAFSA, and students must be enrolled in at least a half-time status. The interest rate of the unsubsidized loan first disbursed on or after July 1, 2023 and prior to July 1, 2024 is 5.50% and the interest is NOT paid by the federal government while the student is enrolled. The interest accrues from the time the loan is disbursed until it is paid-in-full. Students can pay the interest while in school, or it will be added to the principal balance of the loan when entering repayment. Repayment begins six months after graduation, or after the student drops below half-time enrollment. More information regarding eligibility can be found at: Federal Student Aid: Low Interest Loans

Federal Direct PLUS (Parent Loan)

The Federal Direct PLUS Loan is for parents of dependent students and is subject to a credit check. A parent may borrow up to the amount of the student’s cost of attendance less any other financial aid. Filing the FAFSA is required for this loan.

• Interest rate for Direct PLUS Loans first disbursed on or after July 1, 2023 and prior to July 1, 2024 is 8.05​​%
• Interest accrues from the time the loan is disbursed until the loan is paid-in-full
• Parent borrowers may start repayment once the loan is disbursed or request a deferment

More information regarding eligibility can be found at: Federal Student Aid: Direct PLUS Loans

Alternative Loans

Private loans are offered by outside lenders to supplement the federal loan programs, and are available after Federal Direct Loans are depleted. Private loans are not affiliated with the federal student loan program. These loans require a separate application, which is submitted directly to the lender. The student must meet the lender’s credit criteria to qualify. The interest rates and repayment terms are also available through the lender. All students are strongly encouraged to complete the FAFSA before applying for private loans.  More information regarding Alternative Loans

Cohort Default Rate

Federal student loans are borrowed funds that must be repaid with interest. Failure to repay a loan can result in default for an individual student. Schools are also held accountable for how many students are repaying versus defaulting on loans. A cohort default rate (CDR) is the percentage of a school’s borrowers who enter repayment of federal student loans during a fiscal year and default within the cohort default period.

The Department of Education calculates the school’s CDR 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.

Students should investigate and inquire about a school’s Cohort Default Rate (CDR) before taking on loan debt the same as they would graduation rate or job placement rate.

Official Cohort Default Rates are updated annually by the federal government and posted publicly. DMACC’s current CDR is posted below. If you have questions please contact our Office. You can research and compare other Cohort Default Rates at StudentAid.gov​. They have links to more information and searchable databases on the most recent Cohort Default Rates for all colleges.​

DMACC 3-Year Default Rate​​​