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 Direct Stafford Loan Program (Direct Loans). Federal Direct Stafford Loans allow the student to borrow money from the U.S. Department of Education via the Direct Loan Program to help pay for education costs. Under this program, Direct Loans will make a loan directly to you through the school. The Federal Direct Stafford Loan Program includes subsidized loans and unsubsidized loans.
To apply for a Federal Direct Stafford Loan you must complete the following steps:
Online Student Loan Counseling
Stafford Loan Master Promissory Note (MPN)
Student Loan Request Form
This federal program provides low interest loan(s) to the student from the federal government via the Direct Loan Program.
Grade Level One: 0 - 44.99 completed credit hours
$5,500 - Dependent Student (Maximum Subsidized Stafford is $3,500)
$9,500 - Independent Student (Maximum Subsidized Stafford is $3,500)
Grade Level Two: 45+ completed credit hours
$6,500 - Dependent Student (Maximum Subsidized Stafford is $4,500)
$10,500 - Independent Student (Maximum Subsidized Stafford is $4,500)
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 (MPN) 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.
- A Subsidized Federal Direct 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. The maximum amount a student may borrow in Subsidized Stafford Loans at Grade Level One is $3,500 and at Grade Level Two is $4,500.
- An Unsubsidized Federal Direct 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. After your financial aid eligibility has been determined, you can complete a Master Promissory Note (MPN) for a Federal Direct Stafford Loan, Loan Entrance Counseling, and a Student Loan Request Form.
For all unsubsidized Stafford loans first disbursed on or after July 1, 2006, the interest rate is fixed at 6.8 percent. The interest rate for subsidized Stafford loans first disbursed on or after July 1, 2010 is fixed at 4.50 percent. This change from a variable to a fixed interest rate does not affect a borrower's variable interest rate on loans made before July 1, 2006.
All Federal Direct Loans are assessed a loan fee by the federal government. This fee helps reduce the cost of making these low-interest loans. The federal government will deduct the fee from the loan before the borrower receives any loan money; therefore, the loan funds received by the borrower may be less than the amount they will repay.
For loans originated after July 1, 2010, the loan up-front rebate is 1%.
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 (MPN)
- Be enrolled in an eligible degree or certificate program
- Be attending at least half-time (6 credit hours per quarter) for the entire loan period
- Not be in default on any type of federal student loan
- Not owe a repayment on a federal grant
- Be in compliance with the College's Financial Aid Standards of Progress
- Complete Loan Entrance Counseling
Federal regulations require that you be counseled with regard to your Federal student loan.
Counseling is available online by clicking the links below.
Complete loan entrance counseling
Complete loan exit counseling
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.
- Read carefully the instruction included with the promissory note.
- Complete the Student Loan Request Form. Be sure to indicate the loan amount for which you are applying. (The actual loan amount is determined by our office.)
- Complete the Stafford Loan Master Promissory Note (MPN) online.
- Submit the completed Student Loan Request Form to any campus Financial Aid office.
- Your loan application will processed and you will be notified of the approved loan amount.
- You must complete Loan Entrance Counseling.
- Once your loan disbursement has been transmitted to your MCC student account the Student Accounts Office will issue a refund check after all charges have been paid.
To apply for a PLUS Loan you must complete the following steps:
Complete the Federal Direct PLUS Loan Request Form
Complete the Direct PLUS Loan Master Promissory Note (MPN)
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 registered for a minimum of six (6) credit hours for the entire loan period in order for a parent to be eligible for a PLUS loan. Metro requires the student’s Federal Pell Grant eligibility be determined prior to processing this application for the student and parent.
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.
Students must first complete a FAFSA so that their eligibility for federal student aid can be determined. If a student is not eligible for federal student aid then their application for an alternative loan will be considered.