Loan Processing - New & Transfer Students Spring 2010

This page includes information regarding federal loan processing for new and transfer students enrolling for the spring 2010 semester only. If you are a currently enrolled student and need information on federal student and/or parent loans, please visit the links under Financing Options on the left menu bar or contact the Financial Aid Office toll free at 866.582.4236.

This page is in the process of being updated with information and instructions on the Federal Direct Loan (DL) and Direct PLUS Loan programs.

Due to pending federal legislation, LVC will be participating in the DL program for new students only beginning with the spring 2010 semester. There will also be detailed loan processing information included in the financial award package mailed to students who have completed the aid application process. This includes completing the 2009-2010 FAFSA and LVC Institutional Data Form (IDF). You may access these forms online under Documents on the left menu bar. Award packages for spring will be mailed beginning in mid November and on a rolling basis as applications are complete.

The Federal Direct Loan - William D. Ford Federal Direct Loans are provided by the federal government. The loans are for undergraduate, graduate and professional degree students. You must complete the financial aid application process (FAFSA and IDF)  to be eligible and be enrolled a minimum of 6 credits per semester.

There are two types of Direct Loans: subsidized and unsubsidized. The federal government will pay the interest that accrues on subsidized Direct Loans during periods of enrollment. You are responsible for the interest that accrues on the unsubsidized Direct Loans. You have the option of making quarterly interest payments during enrollment or if you choose not to, the interest will be capitalized once at repayment.

If you are a dependent student and your parent is denied the Federal Direct PLUS Loan, you (the student) are eligible to borrow additional funds through the unsubsidized DL program ($4,000/year for freshmen and sophomores and $5,000/year for juniors and seniors). You must notify the Financial Aid Office in writing or via email of the amount you would like to borrow in additional DL funds after the PLUS Loan is denied. You may send an email to finaid@lvc.edu. No additional DL funds will be processed without a written request.

Interest Rates for Subsidized Direct Loans

Loans disbursed on or after July 1, 2009 Fixed 5.6%
Loans disbursed on or after July 1, 2010 Fixed 4.5%
Loans disbursed on or after July 1, 2011 Fixed 3.4%
Beginning July 1, 2012, rates revert to 6.8%  

*Unsubsidized Direct Loans remain at a 6.8% fixed interest rate

The subsidized DL is a need-based loan. If you do not demonstrate financial need, you are eligible to borrow through the unsubsidized DL. The Financial Aid Office will determine your eligibility based on the FAFSA.

For both subsidized and unsubsidized Direct Loans, a 1.5% origination fee is deducted by the government from each loan disbursement. As an incentive to encourage timely repayment of Direct Loans, a 1.0% rebate is offered at the time of disbursement. If you make all of the first 12 required monthly payments on time, you can keep the rebate for the life of the loan.

The following DL limits are based on cost of attendance and cumulative credits earned:

Undergraduate Students

Credits Earned Dependent Students - Subsidized Direct Dependent Students - Unsubsidized Direct Independent Students and Students whose Parents are denied the PLUS Loan - Additional Unsubsidized Direct
0 - 27 $3,500 $2,000 $4,000
28 - 55 $4,500 $2,000 $4,000
56 - 83 $5,500 $2,000 $5,000
>=84 $5,500 $2,000 $5,000

Graduate Students (graduate students are considered independent)

Subsidized Direct Additional Unsubsidized Direct
$8,500 $12,500

Application Instructions for First-time Direct Loan Borrowers

As a first-time DL borrower or a new transfer student who has previously borrowed a DL or Stafford Loan, you must complete Entrance Counseling. In addition, as a first-time federal borrower or a current borrower using the DL program for the first time, you must complete a Master Promissory Note (MPN).

You may access the online Entrance Counseling session on the Direct Loan website http://www.dl.ed.gov and complete the Master Promissory Note on the Direct Loan eMPN website http://dlenote.ed.gov. Our office will be notified electronically when you have completed these requirements. 

Please be aware if you are a first-time federal loan borrower, the first disbursement of your DL will be delayed until the end of the drop/add period.

Application Instructions for Current Direct Loan Borrowers

If you would like to borrow a DL for the spring 2010 semester, you must complete the Borrowing Intention Form (BIF) that will be included in your financial award package*. Packages will be prepared beginning in mid November and mailed on a rolling basis. You must list the amount you would like to borrow on the BIF, sign it and return it to the Financial Aid Office, 2nd Floor, Carnegie Building in order for the loan to be processed.

*PLEASE NOTE: You must complete the aid application process before you will receive a financial award package. You may access the forms under Documents on the left menu bar. Please contact our office if you are not planning to apply for financial aid, finaid@lvc.edu.

The Federal Direct PLUS Loan - This is an education loan for parents of undergraduate students. The Direct PLUS Loan has a fixed interest rate of 7.9%. There is also a 4% origination fee that is deducted by the government from each loan disbursement. As an incentive to encourage timely repayment of Direct PLUS Loans, a 1.5% rebate is offered at the time of disbursement. If a borrower makes all of the first 12 required monthly payments on time, the borrower can keep the rebate for the life of the loan. 

Application Instructions - The parent borrower should apply by completing the Consent to Obtain Credit Report Form included with the financial award package* and return it to the Financial Aid Office for processing. By waiting until the package is received, you'll know the total amount you need to borrow to cover the semester expenses. If you are a first-time borrower of the Direct PLUS Loan, you will also need to complete a Master Promissory Note (MPN). If approved, you will be instructed by the Department of Education on how to complete the MPN. If you have borrowed the Direct PLUS Loan previously and your loan has been approved, it will automatically be processed. There is no need to complete a new MPN; however, the parent borrower must still complete the Consent to Obtain Credit Reoprt Form and return it to the Financial Aid Office for processing.

*PLEASE NOTE: You must complete the aid application process before you will receive a financial award package. You may access the forms under Documents on the left menu bar. Please contact our office if you are not planning to apply for financial aid, finaid@lvc.edu.

Advantages of the Direct PLUS Loan include:

  • Qualifications are based solely on good credit, and there are no debt-to-income ratio or employment verification requirements.

  • The maximum amount you may borrow is equal to the cost of attendance minus other financial aid (Pease note: the cost of attendance includes the estimated expenses for books, transportation and personal, not just billable charges).

  • Flexible repayment terms with up to 10 years to repay the loan. For loans disbursed after July 1, 2009, parents may choose to defer payments until six months after the date the student ceases to be enrolled at least half time. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly. 
     
  • Interest may be tax deductible. 
     
  • No penalty for early repayment or payoff.
     
  • The student is eligible to borrow additional unsubsidized Direct Loan funds if the PLUS Loan is denied (more information below). 
     
  • Provides a built-in insurance for death and disability that applies to both the borrower and the student at no additional cost. 
     
  • You may opt to do a combination of both the Direct PLUS Loan and the HES payment plan.

If your parents are denied the Direct PLUS Loan, you (the student) are eligible to borrow additional funds through the unsubsidized Direct Loan program ($4,000/year for freshmen and sophomores and $5,000/year for juniors and seniors). You must notify the Financial Aid Office in writing or via email of the amount you would like to borrow in additional Direct Loan funds after the PLUS Loan is denied. You may send an email to finaid@lvc.edu. No additional Direct Loan funds will be processed without a written request.