Federal Loans for Students
Federal Direct Subsidized Loans
Federal Direct Subsidized Loans are awarded to undergraduate students with financial need as determined by the FAFSA. The current fixed interest rate for undergraduate subsidized loans disbursed on or after July 1, 2014, is 4.66%, with a loan fee of 1.073%. The interest rate is subject to change annually on July 1 when the rate is adjusted in accordance with the financial markets, so rate changes will impact loans disbursing after July 1, 2015. The federal government pays the interest on the loan while the student is enrolled in at least 6 credits in a degree-seeking program and during authorized periods of deferment.
150% Time Limit on Direct Subsidized Loan Eligibility for New Borrowers on or after July 1, 2013: If you are a new undergraduate borrower on or after July 1, 2013, please familiarize yourself with the new federal regulations regarding a limit on the maximum period of time that you can receive Direct Subsidized Loans. A new borrower is defined as a student having no subsidized or unsubsidized loan balances as of July 1, 2013, or on the date the borrower obtains a Direct Loan after July 1, 2013. In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program of study. For more information, please review the U.S. Department of Education's Federal Student Aid announcement concerning this time limitation.
Graduate and Professional students are not eligible for subsidized loans.
Federal Direct Unsubsidized Loans
Federal Direct Unsubsidized Loans are not need-based and have a fixed interest rate of 4.66% for undergraduates and 6.21% for graduate students, with an loan fee of 1.073%. The interest rate is subject to change annually on July 1 when the rate is adjusted in accordance with the financial markets, so rate changes will impact loans disbursing after July 1, 2015. Interest accrues beginning on the date the loan first disburses and until it is paid in full. Students may elect to pay the interest while enrolled in school or request to defer payment on the interest. If you defer the interest, it will be added (capitalized) to the principal.
Federal Direct Loan Yearly and Aggregate Limits
The chart below shows the federal maximum yearly amount of Direct Subsidized and Unsubsidized Loans and the total aggregate limit for these loans:
|DEPENDENT UNDERGRADUATES||SUBSIDIZED||TOTAL (SUB AND UNSUB)|
|Freshman (0-29 earned credits)||$3,500||$5,500|
|Sophomore (30-59 earned credits)||$4,500||$6,500|
|Junior (60-89 earned credits)||$5,500||$7,500|
|Senior (90+ earned credits)||$5,500||$7,500|
|Pre-Medical and Teaching Certificate Programs||$5,500||$7,500|
|INDEPENDENT UNDERGRADUATES (AND DEPENDENTS WHOSE PARENTS ARE UNABLE TO BORROW PLUS)||SUBSIDIZED||TOTAL (SUB AND UNSUB)|
|Freshman (0-29 earned credits)||$3,500||$9,500|
|Sophomore (30-59 earned credits)||$4,500||$10,500|
|Junior (60-89 earned credits)||$5,500||$12,500|
|Senior (90+ earned credits)||$5,500||$12,500|
|Pre-Medical and Teaching Certificate Programs||$5,500||$12,500|
|AGGREGATE LIMITS||SUBSIDIZED||TOTAL (SUB AND UNSUB)|
Federal Direct Graduate PLUS Loans are awarded to graduate students who are enrolled in at least six credits in a degree-seeking program. There is no annual loan limit for the Graduate PLUS Loans, but students cannot borrow in excess of their cost-of-attendance. Students who apply for Graduate PLUS Loans are subject to a credit check to evaluate creditworthiness. Before the Graduate PLUS Loan can be awarded, students must first apply for their maximum loan eligibility in Federal Direct Unsubsidized Loans. The interest rate for the Graduate PLUS Loan is fixed at 7.21%, with a 4.292% loan fee, for loans disbursed on or after July 1, 2014. Additionally, the interest rate is subject to change annually on July 1 when the rate is adjusted in accordance with the financial markets, so rate changes will impact loans disbursing after July 1, 2015. To apply for the Graduate PLUS Loan, go to www.StudentLoans.gov, use your FSA ID to sign in, and then click on the Request PLUS Loan link. You must also complete a Graduate PLUS Master Promissory Note (MPN) and Graduate PLUS Entrance Counseling at the same Website.
A Federal Perkins or a Nursing Student Loan is a fixed low-interest (5%) loan for students with exceptional financial need. MSU awards Federal Perkins and Nursing Student Loans primarily from funds generated from former students repaying these loans. As a Perkins Loan and/or Nursing Student Loan borrower, you are not charged a loan fee. If you accept a Nursing Student Loan and then withdraw from the Nursing Program, your Nursing Loan will be canceled and you will begin repayment immediately.
If you are a first-time Federal Perkins Loan borrower at MSU, you must sign a Perkins Master Promissory Note and complete a Loan Information Questionnaire and Statement of Responsibilities. These documents will be mailed to you the first time you accept a Perkins Loan. For students that accept a Nursing Student Loan, a Promissory Note and other loan documents will be mailed to you each year you accept a Nursing Student Loan.
You will have a nine month grace period after you graduate, withdraw, leave school, or drop below half-time enrollment (less than six credits), before repayment of your Federal Perkins Loan and/or Nursing Student Loan begins. At the end of your grace period, interest begins to accrue and you will have up to 10 years to repay the loan. There is never any penalty for prepaying on your loans. The total cost of borrowing a Perkins or Nursing Loan based on an annual loan amount of $2,000 with the fixed rate of 5% over a 10-year repayment period is $2,545. If you have any questions, please contact MSU's Perkins and Nursing Loan Service Center at 406-994-2702.
Alternative Loans are available from some private lenders and used as a last resort to fill unmet need between what you have received from financial aid sources and the Cost-of-Attendance. Alternative Loans are not federally funded. The terms and conditions on alternative loans vary widely. We strongly recommend you research the various rates, fees, and repayment options. We also recommend the following independent websites: (1) FinAid.org, which includes general information about private loans and comprehensive list of private lenders (2) Student Lending Analytics, which compares rates and other variables for your research before you pursue any alternative loan. Please note that while this site has not been updated since April 28, 2012, it does provide students with an idea of private student loan availability as well as items to consider in your loan decision-making process. More information can also be found on StudentAid.gov.