Federal Student Loans
There are two types of federal loans that will be addressed in the following information:
- Direct Stafford Loan (DL)
- Perkins Loan
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 after July 1, 2013:
- Undergraduate Students (subsidized and unsubsidized) - Fixed Interest Rate of 3.86%
- Graduate/Professional Students (only eligible for unsubsidized) - Fixed Interest Rate of 5.41%
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 1.072% 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).
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 2014-2015 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, 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 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.
- Freshmen - $2,000 per year
- Eligible current students - $500-$2,000
- 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 Financial Aid Office will contact eligible students 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 (only if Perkins is listed on 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.