Federal Direct Loans

There are two types of federal loans that will be addressed in the following information:

  • Stafford Loan
  • Perkins Loan

This page includes information regarding federal loan processing for new transfer students only who have previously borrowed through the Federal Direct Loan program, and who are enrolling for the Fall 2010 semester. 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.

LVC will be participating in the DL program for new transfer students only who have previously borrowed  through this program. 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 2010-2011 FAFSA and LVC Institutional Data Form (IDF). You may access these forms online under Documents on the left menu bar. Award packages for fall will be mailed beginning March 1st and on a rolling basis thereafter 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, 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. 

Application Instructions for Current Direct Loan Borrowers

If you would like to borrow a DL for the 2010-2011 academic year, you must complete the Borrowing Intentions Form (BIF) that will be included in your financial award package*. Packages will be prepared beginning March 1st and on a rolling basis thereafter as applications are complete. 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 Perkins Loan

The Perkins Loan is a need-based loan awarded to fulltime undergraduates. More specifically, at LVC these funds are distributed primarily to freshmen demonstrating the highest financial need.

  • Freshmen - $2,000 per year
  • Perkins loans are awarded from a limited source of funding which is why the dollars are targeted to the students who are not eligible to borrow as much through the Federal Stafford Loan program (freshmen). Here is some general information about the Perkins Loan:
  • 5% fixed interest rate
  • 9 month grace period prior to repayment
  • Eligibility and award amounts can vary among institutions

At LVC, if you are awarded both the Federal Stafford Loan and the Federal Perkins Loan and you decide that you only need to borrow through one loan program, you must forfeit the Perkins and borrow the subsidized and unsubsidized Stafford Loan. The Perkins is then re-awarded to other students in need.

First-time Perkins borrowers are required to complete entrance counseling and sign the MPN during the first week of classes of the fall semester. The Financial Aid Office will contact you regarding completing these requirements.

Current Perkins borrowers do not need to complete entrance counseling or sign another MPN; however, you must indicate your desire to borrow by completing the BIF and returning it to the Financial Aid Office, 2nd Floor, Carnegie Building, in order for the loan to be processed. As a reminder, the BIF will be included in the Financial Award package mailed in early July.