Student Loans

If you apply for financial aid, you may be offered loans as part of your school’s financial aid offer. A loan is money you borrow and must pay back with interest.   

If you decide to take out a loan, make sure you understand who is making the loan and the terms and conditions of the loan. Student loans can come from the federal government or from private sources such as a bank or financial institution. Loans made by the federal government, called federal student loans, usually offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources. Learn more about the differences between federal and private student loans


To receive Federal Direct Subsidized and/or Unsubsidized Loan funds, you must complete a Direct Loan Master Promissory Note and Entrance Counseling.

To receive Federal Direct Parent PLUS Loan funds, your parent must complete an electronic Parent PLUS Loan Request. If your parent has not previously borrowed a Parent PLUS Loan for you, they must also complete a Direct PLUS Loan Master Promissory Note and Entrance Counseling.

Prior to accepting any loans, you should review Important Information You Should Consider before Borrowing a Student Loan and information on interest rates and fees so that you understand the responsibilities associated with borrowing.

Federal Subsidized and Unsubsidized Student Loans

Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans. (Some people refer to these loans as Stafford Loans or Direct Stafford Loans.)

                Federal Subsidized Student Loan

  • Direct Subsidized Loans are available to undergraduate students with financial need.
  • Hiwassee College determines the amount you can borrow, and the amount may not exceed your financial need.
  • The U.S. Department of Education pays the interest on a Direct Subsidized Loan
    • while you’re in school at least half-time,
    • for the first six months after you leave school (referred to as a grace period*), and
    • during a period of deferment (a postponement of loan payments).


Federal Unsubsidized Student Loan

  • Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need.
  • Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive.
  • You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. 
  • If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).

Federal Direct PLUS Loans

The U.S. Department of Education makes Direct PLUS Loans to eligible borrowers through schools participating in the Direct Loan Program. PLUS loans are federal loans that parents of dependent undergraduate students can use to help pay for college.

PLUS loans can help pay for education expenses not covered by other financial aid.

Here’s a quick overview of Direct PLUS Loans:

  • The U.S. Department of Education is your lender.
  • You must not have an adverse credit history.
  • The maximum loan amount is the cost of attendance (determined by Hiwassee College) minus any other financial aid received.