Federal Student Loans
There are two types of federal loans that will be addressed in the following information:
- Direct Stafford Loan (DL)
- Perkins Loan
You are responsible for repaying these funds according to the information contained in the promissory note. More information about repayment options including loan consolidation, interest rates, monthly payments, deferment, forbearance, and cancellation or to defer repayment of loans for service, and may be found on the U.S. Department of Education’s website.
The Federal Direct Stafford Loan - William D. Ford Federal Direct Stafford Loans are provided by the federal government. The loans are for undergraduate as well as graduate and professional degree students. You must complete the financial aid application process (FAFSA) to be eligible and be enrolled a minimum of 6 credits per semester.
There are two types of Direct Stafford Loans: Subsidized and Unsubsidized. The federal government will pay the interest that accrues on a subsidized DL during periods of enrollment. You are responsible for the interest that accrues on an unsubsidized DL. 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 would like to make interest payments while enrolled, you should contact your servicer for information on their in-school interest billing processes.
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 complete the Borrowing Intention Form (BIF) and return it to the Financial Aid Office if you would like to borrow additional DL funds after the PLUS Loan is denied. No additional DL funds will be processed without a completed BIF on file.
*NEW* Interest Rates for Subsidized and Unsubsidized Direct Stafford Loans disbursed on or after July 1, 2015:
- Undergraduate Students (subsidized and unsubsidized) - Fixed Interest Rate of 4.29%
- Graduate/Professional Students (only eligible for unsubsidized) - Fixed Interest Rate of 5.84%
The Consolidated Appropriations Act, 2012, made changes to temporarily eliminate the interest subsidy provided on Subsidized Direct Stafford Loans during the six month grace period provided to students when they are no longer enrolled on at least a half-time basis. This change will be effective for new loans with the first disbursement on or after July 1, 2012, and before July 1, 2014.
The subsidized DL is a need-based loan. If you do not demonstrate financial need, you are eligible to borrow the unsubsidized DL. The Financial Aid Office will determine your eligibility based on the FAFSA.
For both subsidized and unsubsidized loans, a 1.073% origination fee is deducted by the government from each loan disbursement. This means for a loan in the amount of $3,500, the net amount that will disburse to LVC is $3,462 (3,500 x .9893). This amount is equally disbursed for the fall and spring semesters.
The following DL limits are based on cost of attendance and cumulative credits earned:
||Dependent & Independent Students - Subsidized Direct Stafford
||Dependent & Independent Students - Unsubsidized Direct Stafford
||Independent Students and Dependent Students whose Parents are denied the PLUS Loan - Additional Unsubsidized Direct Stafford
|0 - 27
|28 - 55
|56 - 83
Graduate Students (graduate students are considered independent)
|Unsubsidized Direct Stafford
*Effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012, graduate students are no longer eligible to receive Federal Direct Subsidized Loans. Total annual borrowing eligibility remains unchanged at $20,500, but will be all unsubsidized Direct Stafford Loan.
Aggregate Maximums--total maximum eligibility for undergraduate and graduate degrees.
|| Total (Subsidized & Unsubsidized)
| Independent Undergraduates & Dependent Students whose parents can't get PLUS
| Graduate & Professional Students
Application Instructions for First-time Direct Stafford Loan Borrowers
As a first-time DL borrower, you must complete the Borrowing Intention Form (BIF - included with the financial award letter), Entrance Counseling and the Master Promissory Note (MPN).
You may access the online Entrance Counseling session and complete the MPN at the Direct Loan website. Our office will be notified electronically when you have completed these requirements.
Application Instructions for Current Direct Stafford Loan Borrowers
If you would like to borrow a DL for the 2015-2016 academic year, you must complete the Borrowing Intention Form (BIF) that will be included in your financial award package*. Packages for current students will be prepared during the month of June and mailed the first week in July. You must list the amount you would like to borrow on the BIF, sign it and return it to the Financial Aid Office 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 Applications on the left menu bar. Please contact our office if you are NOT planning to apply for financial aid, email@example.com.
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.
*NEW* The U.S. Department of Education is phasing out the Perkins Loan program beginning with the 2015-2016 academic year. Under section 461(b)(1) of the Higher Education Act of 1965, as amended (the HEA), the authority for schools to make a Federal Perkins Loan ended on September 30, 2014, with an automatic one-year extension pursuant to section 422(a) of the General Education Provisions Act (GEPA). Thus, absent Congressional action, schools may not make Federal Perkins Loans to new borrowers after September 30, 2015. If prior to October 1, 2015, a school makes the first disbursement of a Federal Perkins Loan to a student for the 2015-2016 award year, the school may make any remaining disbursements of that 2015-2016 loan after September 30, 2015.
- Freshmen - $2,500 per year
- Limited funds available for 2015-2016 to previous borrowers who meet the "grandfather" provisions. Awards of $1000-$2,000 will be made to eligible students.
- 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 Direct Stafford Loan program (freshmen).
Here is some general information about the Perkins Loan:
- 5.0% 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 Direct 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 few weeks of the fall semester. The deadline is September 30, 2015. The Financial Aid Office will contact eligible students regarding completing these requirements. Failure to complete these requirements by September 30, 2015, will result in the loss of loan eligibility.
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 Borrowing Intentions Form (BIF-only if Perkins is listed) and returning it to the Financial Aid Office by September 30, 2015. As a reminder, the BIF will be included in the Financial Award package mailed in early July. Failure to return the BIF by September 30, 2015, will result in the loss of loan eligibility.
Student borrowers of Direct Loans or FFEL Program and Perkins loans who are graduating, leaving school or dropping below half-time enrollment are required by law to complete exit counseling. This is an online process that is done atwww.studentloans.gov. Exit counseling provides important information students will need as they prepare to repay their federal student loan(s). The Financial Aid Office will also provide students with a summary of their borrowing history while at Lebanon Valley College. For additional details regarding federal student loans, students may also visit the National Student Loan Data System (NSLDS) at https://www.nslds.ed.gov/nslds_SA/ which is a central database that houses federal student loan information.
During exit counseling, students must submit information regarding the names, addresses, e-mail addresses and phone numbers for their next of kin, references who live in the United States, and their employer or future employer (if known).