Federal Direct Student Loans are one form of student aid from the federal government. Under the Federal Direct Student Loan program students borrow money for school from the federal government. The Office of Financial Aid Administration encourages students to evaluate loan options carefully, borrow only what is really needed and remember that loans must be repaid.
Frequently Asked Questions about Federal Loans
How much can I borrow?
- $5,500 is the maximum annual amount a first-year student is eligible for, no more than $3,500 of which can be subsidized.
- $6,500 is the maximum annual amount a second-year student is eligible for, no more than $4,500 of which can be subsidized.
- $7,500 is the maximum annual amount a third- or fourth-year student is eligible for, no more than $5,500 of which can be subsidized.
- $20,500 is the maximum annual amount a graduate student is eligible to borrow in the form of a Stafford Loan.
- Independent students and students whose parent(s) are denied a Federal PLUS Loan qualify for additional unsubsidized loans.
What is the difference between a subsidized and an unsubsidized loan?
- You will not be charged interest until you begin repayment on subsidized loans.
- Repayment begins six months after you graduate or cease to be enrolled at least half-time (including leaves of absence).
- The interest rate for Federal Direct Subsidized Loans for undergraduate students disbursed on or after July 1, 2018 is 5.05%.
- Interest accrues and must be paid or capitalized while you are still in school and/or during periods of deferment.
- The interest rate for Federal Direct Unsubsidized Loans for undergraduate students disbursed on or after July 1, 2018 is 5.05%.
- The interest rate for Federal Direct Unsubsidized Loans for graduate students disbursed on or after July 1, 2018 is 6.60%.
What is the duration of eligibility?
All first-time borrowers are eligible to receive Direct Subsidized Loans for a period, not to exceed 150% of the length of the borrower’s educational program.
Are there any other federal loans available to graduate students?
The Federal Direct Graduate PLUS Loan is a federal loan available to graduate students. The maximum amount you will be eligible to borrow for the school year will be indicated on your Manhattan College’s award letter. Students often elect to limit the amount which they borrow to the difference between annual direct costs and other financial aid which you have received. Direct costs are those paid directly to Manhattan College including tuition, fees, and room and board for resident students. Indirect costs consist of all other expenses that relate to attendance at Manhattan College. The interest rate on Federal Direct Graduate PLUS Loans is 7.6%.
Are there any federal loans available to parents?
The Federal Direct PLUS Loan (parent loan for undergraduate, dependent students) is a loan from the U.S. Department of Education for parents of undergraduate students who complete a FAFSA and meet general eligibility requirements. Your parent(s) should evaluate whether or not there is a need to borrow in order to assist in the financing of your education. Parents often elect to limit the amount which they borrow to the difference between annual direct costs and other financial aid the student has received. Direct costs are those paid directly to Manhattan College including tuition, fees, and room and board for resident students. Indirect costs consist of all other expenses that relate to attendance at Manhattan College. The interest rate on PLUS loans is 7.6%.
What fees, if any, are associated with these loans?
For student loans, an origination fee of 1.062% of the total loan will be assessed. For PLUS loans, an origination fee of 4.248% will be assessed.
How do I apply for a Federal Direct Student Loan?
- First time Direct Loan borrowers only must complete a Federal Student Loan Entrance Counseling Session in accordance with federal regulations. Visit www.studentloans.gov and click on “Complete Entrance Counseling”.
- First time Direct Loan borrowers only must complete a Direct Loan Master Promissory Note (MPN) at www.studentloans.gov. Borrowers will need their FSA ID in order to complete the MPN. If you do not have a FSA ID or cannot recall it, you can request your FSA ID at fsaid.ed.gov
Where can a borrower go to get their loan information?
The U.S. Department of Education’s National Student Loan Data System (NSLDS) provides borrowers access to information on all student loans and/or federal grant amounts, including information on loan status, outstanding balances, and disbursements. Go to www.nslds.ed.gov.
A private education loan or alternative loan is a nonfederal loan issued by a lender such as a bank or a credit union for the purposes of financing postsecondary expenses. Private loans should be viewed as a loan of last resort since they traditionally do not offer the same benefits of federally funded student loans in terms of interest rates, fees and repayment options.
Private loans like all loans must be repaid. Manhattan College does not recommend any one specific lender and encourages all students and their families to carefully consider all available financing options first before considering a private loan.
Obtaining a Private Loan
The Higher Education Act of 2008 sought to protect student loan consumers and amended the Truth in Lending Act (TILA) and established disclosure requirements for private education loans.
As a result of this change all private lenders are required to collect from an applicant a self-certification form before a private loan can be processed. The form is designed to remind students about other sources of financial assistance and federal loan options. The form seeks to collect from the student their cost of attendance and expected financial assistance at Manhattan College. This information will be used by the lender as part of the eligibility determination process.
Private Loan Process
Step 1: Select a Lender
Students need to research lenders to see what lender offers them the best options in terms of interest rates, fees, repayment options and disbursement options (check or EFT).
It is important to note that some lenders require students to immediately go into repayment and untimely payments can affect future disbursements. This means that loans disbursed in the fall for which monthly timely payments are not made can jeopardize a spring disbursement of that loan regardless of original approval.
Step 2: Download and complete self-certification form
A self-certification form is usually completed electronically with your private lender of choice. You may download a separate copy online if needed. To complete Section II of this form:
- A: Please refer to your hard copy award letter (new students) or the appropriate cost worksheet to find your cost of attendance.
- B: Your total estimated amount of offered financial aid for this academic year can be found on your award letter, whether hard copy or on Self-Service.
- Calculate A minus B.
The cost of attendance information provided is based on standard enrollments:
- full-time for undergraduate students
- part-time for graduate students based on current classification in school
If you know you will be attending school part time or full time, you must calculate and adjust your cost of attendance using the budget information provided. Students who plan on filing a FAFSA should do so before applying for a private loan so that they have an estimate of their financial assistance.
Step 3: Complete the Application Process
Complete the application, submit self-certification form and any other required paper work to lender, authorize a credit check and if approved, sign a promissory note.
Keep the following in mind when applying for your private loan:
- Carefully consider the loan period. Students should select a period that corresponds to the schools academic year. Since eligibility is tied to a credit check if a loan is needed for the full year it is advisable to apply for the loan for the full academic year rather than apply for a loan for the fall and then reapply for a loan for the spring. Remember the spring portion, if not needed, can be cancelled or returned.
- The loan amount you are certified for will be divided equally among the terms for which your private loan was applied for and approved.
- Maximum eligibility is your Cost of Attendance, which includes tuition, fees, and living expenses minus the other financial aid you are receiving.
- Manhattan College will only deduct private loans from a student’s bill when they are “approved”, meaning that the credit is acceptable or “ready for school certification”, promissory note has been signed, and any documentation required by the lender and college has been submitted. The lender will notify Manhattan College when the loan is approved.
Step 4: School Certification
Once the loan has been approved, Manhattan College will receive notification directly from the lender that the loan has been approved and that school certification is requested. Since these loans are designed by the lenders for educational purposes they require certification that the student is enrolled in a postsecondary institution. Traditionally they also require the school to certify the class level and credit enrollment and anticipated graduation date of the borrower.
Step 5: Disbursement of Loan
Loans will be disbursed according to the disclosure statement from lender.
If you choose a lender that does not disburse funds via Electronic Funds Transfer ( EFT), then a paper check will be issued to Manhattan College and the student. The paper check will require endorsement from the borrower before funds will be credited to the student’s account. The Office of Financial Aid Administration will notify students if they need to endorse a paper check.
We encourage students to ask their lender about having their loan disbursed EFT since this expedites the payment process. Most disbursement dates are timed to reflect the start dates of each semester.
About Direct to Consumer Loans
Manhattan College does not encourage students to apply for Direct to Consumer Loans because the terms tend to be less favorable than private loans certified by the school. The loan amount is not automatically deducted from your bill nor can a temporary credit be placed on the account for the amount of the loan. The loan amount will be posted to your account once payment is received. Please keep in mind that Direct to Consumer Loans are counted as a financial resource and must be disclosed by the student to Manhattan College.