A student loan is money you borrow for educational purposes that you must pay back with interest.

The specific sum of money you borrow is called the principal. Interest is a percentage of the principal which you pay as a fee for borrowing. When it comes time to pay back the principal and interest you usually pay in monthly installments. If you fail to repay (or default) the government may penalize you.

All qualified financial aid students may borrow through the Federal Family Education Loan Program (FFELP which includes the Federal Stafford loan and the Federal PLUS loan). Federal Stafford Loans allow the student to borrow money from a private lender to help pay for education costs. Under this program, the lender will make a loan directly to you through the school. The Federal Stafford Loan Program includes Subsidized loans and Unsubsidized loans.

Federal Stafford Student Loan

To apply for a Stafford Student Loan you must complete both of the following steps:

1. Complete the Stafford Loan Master Promissory Note (MPN)

AND

2. Complete the MCC Student Information Form

This federal program provides low interest loan(s) to the student from lenders such as banks, credit unions, or savings and loan associations.

Maximum Loan Amounts
Grade Level One: 0 - 44.99 completed credit hours
$5,500 (Dependent Student)
$9,500 (Independent Student)

Grade Level Two: 45+ completed credit hours
$6,500 (Dependent Student)
$10,500 (Independent Student)

The student enrolled in a certificate program is not eligible for $6,500.

The student must be registered for a minimum of six (6) credits for the entire loan period to be eligible for either type of loan and his/her eligibility for a Federal Pell Grant must be determined prior to submitting a loan application. A separate Master Promissory Note must be completed by the student after Federal Pell Grant eligibility is determined. Repayment of the loan begins at the end of a six-month grace period after the student either graduates, stops attending, or is registered for fewer than six (6) credits per quarter.

What is the Difference between the two types of Federal Stafford Loans

• A subsidized Federal Stafford Loan is based on financial need. "Need" is determined by subtracting the Expected Family Contribution (determined by federal formula) and all other forms of aid from the Cost of Attendance (COA). The federal government pays the interest for you while you are enrolled in school at least half time; during the six-month grace period after you stop attending school at least half-time; and during periods of authorized deferment.
• An unsubsidized Federal Stafford Loan is not based on financial need and is available to you regardless of income. Because this loan is not subsidized by the government, you are responsible for all interest which accrues during in-school, grace and deferment periods. You may choose to make periodic interest payments to the lender or opt to have the accrued interest capitalized (added on to) the principal loan amount.

To apply for a student loan you must have a completed financial aid file and be in compliance with the Educational Assessment and Student Loan Policy (see the Financial Aid office). After your financial aid eligibility has been determined, you can complete a Master Promissory note for a Federal Stafford Loan. Applications are available from the Financial Aid & Veteran Services Offices.

The interest rate is fixed at 6.0% for subsidized loans made after July 1, 2008. The interest rate is fixed at 6.8% for unsubsidized loans made after July 1, 2008.

There are two fees associated with receiving subsidized and unsubsidized Federal Stafford loans. An origination fee, is paid to the federal government and currently equals 1% of the loan amount. The second, a default fee, may be charged by the guarantor of the loan and can equal up to 1% of the loan amount. Your Promissory note lists the amount you will receive after the fees are assessed. You will still be required to repay the total amount of the loan.

You must have a completed financial aid file and be in compliance with the Educational Assessment and Student Loan Policy (see the financial aid office). After your financial aid eligibility has been determined, you can complete a Master Promissory note for a Federal Stafford Loan. Applications are available from the Financial Aid & Veteran Services Offices.

To be eligible for these loans you must:

• Have a completed Financial Aid file including determination of Pell Grant eligibility.
• Complete and return a valid Master Promissory note
• Be enrolled in a degree program or certificate program
• Be attending at least half-time for the entire loan period
• Not be in default on any type of student loan
• Not owe a repayment on a federal student grant
• Be in compliance with the College's Financial Aid Standards of Progress
• Attend an Entrance Loan Counseling session (first time borrowers at Metro and every 3 years thereafter).

LENDER SELECTION

You have the right to select any lender of your choice. Selecting a lender is an important decision, as you may be dealing with that lender for the life of your loan. You should choose a lender in which you have confidence or from whom you have borrowed student loans previously. If you select one of the following lenders, please insert the information about that lender on the loan application/promissory note (borrower section, items 8 and 9).

If you select a lender not on this list, contact that lender for the lender code and mailing address, also confirm that the lender participates in the Federal Family Education Loan Program (FFELP). MCC will process all applications properly submitted.

If you have questions, contact a campus a Financial Aid Office.

LOAN COUNSELING

Federal regulations require that you be counseled with regard to your Federal student loan.

Counseling is available in person or on-line. You must complete the entire loan application process before entrance counseling can be completed.

Complete loan entrance counseling

Complete loan exit counseling

Completing the Stafford Student Loan Master Promissory Note/Application

A Federal Stafford loan is a loan, not a grant. You must repay the money you borrow, any fees associated with the loan, and any interest that accrues on the loan.

LOAN PROCESSING STEPS

• Read carefully the instruction pages attached to the promissory note.
• Complete the entire application (including items #8, #9, and #10). Keep all pages together. Use black ink and press hard, if you print. An incomplete application will be returned to you and will delay processing.
• Complete the Student Information Form. Be sure to indicate the loan amount for which you are applying.  (The actual loan amount is determined by our office.)
• Submit the completed promissory note and the Student Information Form to any campus Financial Aid office.
• If you choose an Electronic Lender, your loan application will processed within 5 working days, forwarded to your lender and you will be notified of the approved loan amount.
• If you choose a Non-Electronic Lender, our office will process your application in 8-10 working days and return it to you to forward to your lender.
• If you have not previously attended a loan counseling session at Metro, or if it has been 3 or more years since you have attended a session, you must attend one before you may receive your loan check. (You will be notified of the times and places for these sessions.)
• After Student Accounts receives your check, you will be notified, by mail, that it has arrived. Included will be an attendance verification form that must be signed and dated by each of your instructors. (The signatures must be dated within 8 working days of the time you pick-up the loan.) This form must be brought (or mailed) to Student Accounts and turned in before you will be able to receive your check.
• ANY CHARGES OWED THE COLLEGE AT THE TIME YOU PICKUP THE LOAN CHECK WILL BE DEDUCTED FROM THE LOAN REGARDLESS OF ANY OTHER PENDING FUNDS (PELL, JTPA, etc.)

FEDERAL PLUS LOAN

To apply for a PLUS Loan you must complete both of the following steps:

1. Complete the PLUS Loan Master Promissory Note (MPN)

AND

2. Complete the PLUS Student Information Forms

This loan program is designed to assist the parent(s) who wants to borrow money to help pay for the educational expenses for each child who is a dependent undergraduate student.

The student must be enrolled for at least six (6) credit hours. Metro requires the student’s Federal Pell Grant eligibility be determined prior to processing this application for the student and parent.

ALTERNATIVE/private LOAN

Alternative loans are private loans through a lending institution and are not part of the federal government programs. Alternative loans are more expensive than federal government guaranteed loans and should only be used when all other options have been exhausted. Research all possibilities for scholarships, grants, Work Study, and federal loan programs before borrowing from an alternative loan program.