All About Student Loans

Student Loan Cohort Default Rates

Fiscal Year (FY) 20 Official National Rate calculated on August 5, 2023, is 0.0%; which is a 100% decrease from Fiscal Year 19 Official of 2.3%

Oakland Community College - 3 Year Official Rate for 2020 is 0.0%

Borrow With Care 

Student loans are the least attractive form of financial aid, but they can provide the last piece in the puzzle when you’re gathering money for college.

Student loans are less appealing because you have to pay back the money with interest. That’s different than grants and scholarships – which you don’t have to pay back – and work-study, where you earn the money through a job.

The federal government and private lenders like banks and credit unions offer student loans. If you want a private loan you have to arrange it yourself, so we’ll stick here with federal student loans. They typically offer lower interest rates and more flexible payment terms than private loans. A federal student loan may be part of your financial aid award from OCC. You’re automatically considered for one when you submit your Free Application for Federal Student Aid.

Maximum eligibility period to receive Direct Subsidized Loans

Subsidized (Subsidy)

  • The Direct Subsidized Loans are available only to undergraduate students with financial need.
  • The subsidized loan is considered a need-based loan which means it is only awarded to those students who can demonstrate a financial need on the FAFSA.
  • The government pays the interest on the loan while you’re in school at least half-time, for the first six months after you leave school, and during certain other periods (postponement of loan payments.)

Unsubsidized (No Subsidy)

  • The unsubsidized loan is available to both undergraduates and graduate or professional degree students; there is no requirement to demonstrate financial need.
  • Student is responsible for paying the interest on Direct Unsubsidized Loans 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, the interest will be capitalized at the end of the grace, deferment, or forbearance period. That is, the unpaid interest will be added to the principal amount of your loan.

Loan Disbursement Information

Student loans must be accepted, rejected or modified (one time only) before being scheduled for disbursement.  Loans are processed based on expected or actual enrollment. Any changes in enrollment status may result in the reduction or cancellation of the loan. Students must be enrolled for at least 6 credits before the loan will disburse. Enrollment status will be verified before releasing funds. Receipt of other financial assistance unknown at the time of awarding may also affect the amount of the student loan.

The Notice of Loan Guarantee and Disclosure Statement, which comes from the federal government, will list the approximate dates of disbursement to the school.

Students may cancel or reduce the amount of loan(s) by submitting a written request to the campus SFRS before the disbursement date.

Students who want to choose the Federal Work-Study Program, student loans may be reduced or cancelled. Contact your campus SFRS office.

Title IV Credit Arrangements

Oakland Community College does not have a contractual agreement with financial services providers/third-party vendors to offer Tier One and/or Tier Two Arrangements.  Student refunds are processed as follows:

  • deposited into the student's banking account,
  • processed as a paper check and mailed to the address on file, or
  • credited back to the credit card used for payment.

National Student Loan Data Systems (NSLDS)

The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data. Student information is available at NSLDS.

Students must log in with their Federal Student Aid (FSA) ID.

Entrance Counseling

Entrance Loan Counseling and a Master Promissory Note (MPN) are required for new, first-time borrowers.  Loans will not disburse without these documents being completed.

Complete Direct Loan Entrance Counseling and /or the Direct Loan Master Promissory Note by going to Student Loans.

For video tutorials on Entrance Loan Counseling and the Master Promissory Note select the following links:

Entrance Loan Counseling
Master Promissory Note

Direct PLUS Loans (Parent Loans)

For parents of dependent undergraduate students and for graduate or professional students; borrower is responsible for all interest; student must be enrolled at least half-time; financial need is not required; visit Federal Student Aid  for current interest rates.

Private Education Loans (Alternative Loans)

Private student loans are offered through a variety of banks and other lenders. Students wanting private loan must apply separately from their financial aid application through an individual lender. The best rates on these loans are generally offered to borrowers with good credit and/or who have a cosigner with good credit. 

Preferred Lender Arrangements/Preferred Lender List

Oakland Community College does not recommend or endorse any bank or lender. Oakland Community College does not have a Preferred Lender Arrangement and/or a Preferred Lender List.   Oakland Community College does not provide assistance to students and families in their search for, or review of, private student loans.  Students and/or parents must conduct their research independently.

The loan amount will be limited to the Cost of Attendance minus student financial assistance offered during the loan period of the private loan application. Oakland Community College’s responsibility is to certify the loan.

Oakland Community College uses an electronic process administered by ELM Resources to process loans from any lender.   ELMNet is an internet-based system that helps schools and loan providers manage student data.  ELMNet offers an open and lender-neutral platform.  ELM is not affiliated with any lender.

Application Process

Students apply to the lender of their choice.  The lenders determine eligibility for a credit-worthy loan.  The lender can choose to:

  • Send student data to ELM who sends approved loan records to OCC to verify enrollment and eligibility, or
  • Send a paper application to OCC to verify and certify the loan


Loan Disbursements records are sent to ELM from lenders to be disbursed to Oakland Community College electronically.  Disbursements occur every other Thursday; these dates coincide with Oakland Community College disbursement dates.  Loan funds are deposited into the OCC account to be disbursed to recipients.

For paper applications, disbursements from the banks are sent via paper checks co-payable to OCC and the student. 

Code of Conduct for Student Loans

Oakland Community College adheres to a Code of Conduct for Student Loans that prohibits inducements or incentives by private lenders. 

Loan Consolidation

Allows you to combine loans so that you make only one monthly payment. You can consolidate any or all of your loans — you choose. There is no cost to you to consolidate. You can lower the interest rate on your Loans if you consolidate during your grace period. The Loan Servicer will assist you with the loan consolidation process.

Managing Your Loan Repayments

Basics of managing your loan repayments once you leave OCC:

Exit Counseling

Students who withdraw, graduate or enroll for less than six (6) credits must complete an exit counseling as required federal regulations.

The purpose of exit counseling is to provide students with the information needed to manage  student loan debt.  Exit Counseling is available for online completion at Federal Student Aid.   To access the online counseling, students will need an FSA ID. The counseling session should take about 30 minutes to complete. When asked to select a school be sure to choose Oakland Community College.

Exit Loan Counseling Tutorial

If you have any questions regarding your Exit Loan Counseling requirement, please contact the Student Financial Resources and Scholarships Office at any campus.

Your Grace Period (Before You Repay Your Loan)

The grace period begins when you graduate, drop to below half-time or withdraw from the College. It will last for 6 consecutive months. If you do not use the full 6 months and return to school, you can regain your entire grace period if you immediately file a deferment form at your new school. The next time you complete a program or stop attending school, you will have the full 6-month grace period available to you. Once you use the entire 6 consecutive months of your grace period, it is gone forever. If you begin repayment and return to school, you can obtain deferment of principal payments by filing a deferment form. However, when you complete your next academic program or cease attendance, you will not have a grace period and repayment will begin immediately.

The Basics of Federal Student Loans

Federal student loans have one huge advantage over other types of financial aid: Virtually everyone qualifies for some type of loan, no matter their financial circumstances. To be eligible, you must be registered for at least six credits in an eligible program, make Satisfactory Academic Progress, and meet a few other eligibility requirements.

Some key features of federal loans include:

  • If you’re awarded a federal student loan, you must sign a legal contract called a promissory note and undergo entrance counseling to learn about your obligations.
  • You don’t have to start paying back federal loans until six months after you graduate, drop below six credits in a semester, or leave school.
  • You can choose from a variety of repayment plans, including income-based plans.
  • They have fixed interest rates that are usually lower than those available with private loans.
  • You generally have 10 to 25 years to pay off the loans.

While these features are appealing, they come with a big caution: Only take out a loan for the amount of money you absolutely need for school. Why? Because you have to pay the money back with interest – even if you don’t graduate. This can be a big drain on your financial well-being after you finish school. If your financial aid award from OCC includes a loan with more money than you really need, you can accept a lower amount.

Types of Federal Student Loans

The federal government provides four kinds of student loans:

  • Direct Subsidized Loans: These loans are for students who demonstrate financial need on their Free Application for Federal Student Aid. The federal government pays the interest while you’re in school.
  • Direct Unsubsidized Loans: You don’t have to demonstrate financial need to qualify for these loans, but you pay all the interest charges. You can choose to defer those interest charges while you’re in school, but the accumulated interest is added to your loan’s principal.
  • Direct Parent PLUS Loans: Parents can apply for these loans to help pay for their child’s college education. This is the only type of loan where the government checks your credit. If you have an adverse credit history, you must meet additional requirements to qualify for a loan.
  • Direct Consolidation Loans: Student or parent borrowers can combine all their loans into one with these loans.

What is a Federal Direct Student Loan?

Federal Direct Student Loan Limits (*Includes Grad)

Avoid Loan Scams

If you take out a federal student loan, companies may contact you promising to reduce your debt for a fee. They may claim to have “insider information” to lower or even wipe out your debt – but you must act now. Don’t fall for this.

“You don’t have to pay for help with your student loans,” says the Federal Trade Commission. “There’s nothing a company can do for you that you cannot do yourself for free.” Some companies even use the U.S. Department of Education seal, but this doesn’t mean they’re legit. “Scammers use official-looking names and logos and say they have special access to certain federal programs,” says the FTC. “They don’t.”

The Department of Education does hire private companies to handle the billing and other services on your federal student loans. You can check a list of trusted companies that work with the department if you’re not sure about a company that contacts you.

For more information about how to spot scams, see Avoiding Student Aid Scams from the Department of Education.

If you have questions about your loan, the best source of help is the company that services it. They’ll work with you to change your repayment plan, consolidate your loans, lower your monthly payment, postpone payments while you’re going to school or are unemployed, or see if you qualify for any loan forgiveness programs. 

How to Learn More

Publications from the U.S. Department of Education offer a wealth of information about federal student loans: