Types of Aid - Loans

Federal Direct Student Loans can be either Subsidized or Unsubsidized or a combination of both. 
The main difference is that with the Federal Subsidized Direct Student Loan, the Federal
Government pays all interest during the in-school and grace periods. 
With the Federal Unsubsidized Direct Student Loan the student is responsible
for the interest.  However, students taking unsubsidized loans can allow the interest
to accrue while in school.

Features and benefits of the Federal Direct Loans

How much you can borrow per year

You can qualify for subsidized and unsubsidized loans:

Dependent Students

       Year 1: $5,500 (no more than $3,500 can be subsidized)

       Year 2: $6,500 (no more than $4,500 can be subsidized)

       Years 3-5: $7,500 per year (no more than $5,500 can be subsidized)

Independent Students (and dependents whose parents are unable to borrow the Federal PLUS Loan)

       Year 1: $9,500 (no more than $3,500 can be subsidized)

       Year 2: $10,500 (no more than $4,500 can be subsidized)

       Years 3-5: $12,500 per year (no more than $5,500 can be subsidized)

Interest rates

For loans guaranteed between July 1, 2010-June 30, 2011:

Subsidized Loans             Fixed rate if 5.6%

Unsubsidized Loans         Fixed rate of 6.8%        

Fees

Fees vary according

Repayment

Repayment begins 6 months after the student is no longer attending at least half-time (6 credits)

The maximum repayment term is usually 10 years

The minimum repayment starts at $50 depending on how much you borrowed

Federal Direct Loans are processed electronically. Loan proceeds are electronically sent from the bank that you have chosen to the college's Business Office. The Business Office will then credit your account with the loan proceeds. After tuition, fees, books, housing, and other charges are deducted, the Business Office will prepare a check for you for the remaining amount, if any. Student Loans are normally disbursed on the 10th day of each term. The exception is for first-time, first-year borrowers. Their first check will not be disbursed until the 31st day of the semester.

In addition there are other important facts to remember about Federal Direct Student Loans:

  • Your eligibility for the academic year that you are attending is on your award letter
  • You do not have to borrow the full amount
  • The minimum amount you can borrow is $300
  • You should borrow for both fall and spring semesters at one time
  • One half of the loan will be available for fall and one half for spring
  • If you borrow for only one semester, one half of the loan cannot be disbursed until mid-point of the semester
  • If you are a first-year, first-time borrower, you will not receive any loan funds until the 31st day of the semester
  • You must be registered for at least 6 credits for the term (1/2 time)
  • You must maintain Satisfactory Academic Progress to be eligible for loan funds
  • All Federal Direct Loans must be repaid
  • Additional loan funds may be available by reviewing your needs with the Financial Aid Office

For first-time borrowers at Mesabi Range Community and Technical College: Loan Entrance Counseling is mandatory. Your loan application will not be processed until you have completed Entrance Loan Counseling.

Please also note that first-time borrowers are defined as those students who have not taken out a student loan at Mesabi Range Community and Technical College. If you have taken out a loan while attending another college, you still must do Entrance Loan Counseling.

DIRECT loan applications are available on the college financial aid website.

Federal PLUS Loans

The Federal Parent Loan (PLUS) Program is a loan program where the student's parents are able to borrow money to help the student meet their educational costs. As with the other loan programs, the student must be enrolled at least 1/2 time.

There are no annual or aggregate limits in the PLUS loan program; however the annual loan limit may not exceed the Cost of Attendance minus the Estimated Financial Assistance. The PLUS loan applicant (parent) is required to undergo a credit evaluation based on criteria set by the U. S. Department of Education and the lending institution.

Federal Parent PLUS Loan are received electronically.   Upon receipt of the disbursement, the school verifies enrollment and Satisfactory Academic Progress of the student. The funds will be used to pay for tuition and fees, room and board, and other allowable expenses. If there is money remaining, the Business Office issues a check to the student.  First-time, first-year borrowers of PLUS loans do not have to wait for the 31st day of the first term. Funds are normally disbursed on the 10th day of the semester.

Repayment of the PLUS loan begins 30 days after the loan is fully disbursed.  Unlike other student loans, PLUS loans become payable while the student is still enrolled.  Minimum monthly payments are $50.00.  Some lenders offer deferment of payment while the student is in school.   Talk to your lender

PLUS loan applications are available on the college financial aid website.

Perkins Loans

The Perkins Loan Program is a Federal Student Loan Program where eligible students can borrow additional funds to meet their educational costs. Students with high unmet need will be packaged for Perkins Loans. The Perkins Loan Fund is limited and students will be taken on a first come first served basis. There is a separate application for the Perkins Loan which can be obtained from the Financial Aid Office.