Federal Student Loans

Federal loans are borrowed funds that you must repay with interest. A federal student loan allows students and their parents to borrow money to help pay for college through loan programs supported by the federal government. They have low-interest rates and offer flexible repayment terms, benefits, and options.

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, may be found at studentaid.gov.

LVC’s 2019 Federal Cohort Default Rate (CDR) is 0.8%. The 2019 CDR is the percentage of a school’s borrowers who enter repayment on their federal student loans between Oct. 1, 2018, to Sept. 30, 2019, and defaulted in 2019, 2020, 2021.

The Federal Direct Loan

Federal Direct 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 for a minimum of 6 credits per semester.

There are two types of Direct Loans (DL): 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 per year for first-year students and sophomores and $5,000 per year for juniors and seniors). The additional loan will be added to your financial aid offer after we are notified of the PLUS Loan denial. You will be notified by email to accept/reduce/decline this loan.


Interest Rates for Subsidized and Unsubsidized Direct Loans disbursed on or after July 1, 2023:

  • Undergraduate Students (subsidized and unsubsidized) – Fixed Interest Rate of 5.49%
  • Graduate/Professional Students (only eligible for unsubsidized) – Fixed Interest Rate of 7.05%

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 1.057% 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 the cost of attendance and cumulative credits earned:


Undergraduate Students

Credits Earned Subsidized Direct Loan Unsubsidized Direct Loan Students whose parents are denied the PLUS Loan-
Additional Unsubsidized Direct Loan
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

Unsubsidized Direct Loan: $20,500*

*Graduate students are considered independent and are only eligible to receive the Federal Direct Unsubsidized Loan.


Aggregate Maximum

Subsidized Total (Subsidized & Unsubsidized)
Dependent Undergraduate $23,000 $31,000
Independent Undergraduate & Dependent Students whose parents are denied the PLUS Loan $23,000 $57,500
Graduate and Professional Students N/A $138,500 (includes undergraduate and graduate borrowing)
Application Instructions for First-time Direct Loan Borrowers

As a first-time DL borrower, you must accept/reduce/decline your loan eligibility by logging into AccessLVC.

You may complete the online Entrance Counseling session and complete the MPN at studentaid.gov. Our office will be notified electronically upon completion.

Application Instructions for Current Direct Loan Borrowers

As a returning student borrower, you must accept/reduce/decline your loan eligibility by logging into AccessLVC. Aid offers for current students will be prepared during the month of June and released the first week in July. You will be notified by email when your aid offer is available.

*You must file the FAFSA before you will receive a financial aid offer. Please contact our office if you will not file, finaid@lvc.edu, and we will prepare an aid offer that includes financial aid that does not require the FAFSA.

Exit Counseling

Student borrowers of Direct Loans who are graduating, leaving school, or dropping below half-time enrollment are required by law to complete exit counseling. 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 studentaid.gov.

During exit counseling, students must submit information regarding the names, addresses, email addresses, and phone numbers for their next of kin, references who live in the United States, and their employer or future employer (if known).