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Carroll Community College to offer direct loans starting this fall

Carroll Community College will begin offering loans for the first time to its students starting in the 2013-14 school year.
The college will now participate in providing direct loans to students and parents through the William D. Ford Federal Direct Loan Program and will begin awarding the loans for the fall semester, according to John Gay, Director of Financial Aid at Carroll Community.
The financial aid will be provided through loans the government allows schools to administer and will be based on information filled out by students each year in the Free Application for Federal Student Aid, known as a FAFSA, he said. Those loans include federal subsidized and unsubsidized Stafford loans.
Parents can also take out a loan on behalf of their student, called the Federal Direct Parent Plus loan. Approval for that loan is based on the parents' credit history.
"The main purpose of this loan program is to provide additional options for students," Gay said. "It's another option that we feel as though students should have at their disposal."
The loan amounts will be based on how many credits a student has earned, if they are an independent or a dependent student, and what they think their enrollment will be for the upcoming fall and spring semester.
These student loans have repayment flexibility and often lower interest rates than loans received elsewhere, such as from a bank, Gay said.
A student is reevaluated for financial aid every school year. Each year they will file a FAFSA online to see which loans they qualify for. There are loan limits for dependent and independent students.
Loans taken out by students do not go into repayment until six months after graduation or six months after a student drops below a half-time enrollment status as a student at any level, Gay said.
The Stafford loans are currently at a 6.8 percent interest rate, but Congress could decide to drop that rate back down to around 3.4 percent.
All Carroll students fill out a student information sheet before they go online to start the loan process and receive entrance counseling, Gay said.
Before being approved to provide the loans, Carroll was just one of three community colleges in the state out of 16 colleges that didn't participate in direct loans, according to Jody Kallis, legislative liaison with the Maryland Association of Community Colleges.
The other schools are Chesapeake Community College and Baltimore City Community College, but Chesapeake Community College does offer Perkins loans to students, she said.
Carroll Community President Faye Pappalardo said starting a loan program at the school has been discussed for a couple of years. The college didn't want to start the program until they believed it was necessary, she said, but the state of the economy persuaded the college to add the loan program.
"We wanted to give it a lot of thought," she said. "Last year, we thought seriously that it was time."
Carroll is hoping it will give students every opportunity to have a college education if that is their goal, Pappalardo said.
"If they don't have the money and the only way they could go to college is to take out a loan, then it would affect them positively," she said.
The school cannot yet judge how many people will end up utilizing the loan program, Pappalardo said. The school tries to make sure there is need before the students and parents take out the loans.
As an institution, it is a good business practice to have these kind of options available to students and parents, Gay said.
Approximately 85 students and two or three parents have already looked into applying for loans at Carroll.
"That number's definitely going to increase from now until school starts," he said.

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