MSU-Northern Financial Aid: Loans

Types of Aid: Loans

Federal loans, except the Federal Direct PLUS (Parent) Loans, are available to students through the FAFSA.

Federal Perkins Loans are warded to students with exceptional need, must be of sophomore standing, and are awarded on a first come first serve basis. Students must complete a FAFSA to be eligible. Funds are limited. The Perkins loan interest rate is 5% and it has a 9 months grace period.

Federal Direct Stafford Loans are either subsidized or unsubsidized. With a subsidized loan, the Federal Government pays interest on the loan until you begin repayment and during authorized periods of deferment. If you receive an unsubsidized loan, you will be charged interest from the time the loan is disbursed until it is repaid in full. The undergraduate interest rate for the 2011-2012 school year will be fixed at 3.4% sub and 6.8% unsub. Graduate students will pay 6.8% for both sub and unsub for the 2011-2012 school year. The borrower must also pay a loan fee of .5% of the amount borrowed, which is deducted from each disbursement. Repayment begins after you graduate, leave school, or drop below half-time enrollment. You have six months before payments begin. This is called a “grace period”.

Federal Direct Stafford Loan Limits
Grade Level	Dependent Undergraduates Loan Limits	Independent Undergraduates Loan Limits
Freshman	$3500 Sub + $2000 Unsub = $5500 per annum	$3500 Sub + $6000 Unsub = $9500 per annum
Sophomore	$4500 Sub + $2000 Unsub = $6500 per annum	$4500 Sub + $6000 Unsub = $10500 per annum
Junior or Senior	$5500 Sub + $2000 Unsub = $7500 per annum	$5500 Sub + $7000 Unsub = $12500 per annum

Aggregate Dependent Undergraduate Loan Limits	$23,000 Sub + $8,500 Unsub = $31,500	Aggregate Independent Undergraduate Loan Limits	$23,000 Sub + $34,500 Unsub = $57,500
Graduate and Professional Students:		$8500 Sub + $12,000 Unsub = $20,500 per annum
Aggregate Graduate and Professional Loan Limits:		$65,000 Sub + $73,500 Unsub = $138,500

Direct Loan Questions and Answers

Federal Direct Parent Plus Loans: Federal Direct PLUS Loans enable parents with good credit histories to borrow to pay the Education expenses of their children. To be eligible, the child must be a dependent undergraduate student enrolled at least half time. The yearly borrowing limit on the Fedral Direct PLUS loan is equal to your cost of education minus any other financial aid you receive.

The interest rate is 7.9%. The borrower may also pay a loan fee of 2.5% of the amount borrowed, which is deducted from each disbursement. Repayment generally begins at 60 days after the final loan disbursement. There is no grace period. This means that the interest begins to accumulate at the time of the first disbursement and repayment of both interest and principal begins while the student is in school.

To apply for this loan parents must complete the Federal Direct Parent Plus loan application and return it to the Financial Aid Office. CLICK HERE FOR PLUS APPLICATION

If the parent is pre-approved for the Federal Direct Parent PLUS loan he or she must complete a PLUS Master Promissory note. CLICK HERE FOR PLUS MPN