Previously, MCU processed federal loans through the Federal Family Education Loan Program (FFELP).  Under this program, students borrow from the bank, credit union, or other lender of their choice that participates in the program.  On March 25, 2010, the US House of Representatives and the U.S. Senate passed The Health Care and Education Affordability Reconciliation Act of 2010.  This bill mandates that, effective July 1, 2010, all federal student loans (Stafford, Plus and Grad Plus) be processed through the Federal Direct Loan Program.  The FFELP program as explained above is eliminated, effective June 30, 2010.

The Direct Loan Program provides financial assistance through lenders to expand higher education opportunities for undergraduate, graduate, and professional students attending post-secondary schools on at least a half-time basis.

Students must show financial need to qualify for the subsidized loan. The federal government, on behalf of the borrower, pays the interest that accrues while the student is in school, during authorized deferment periods, and for six months after the student ceases to be enrolled at least half-time. The borrower begins paying the interest when the loan enters repayment.

Students are not required to show financial need to qualify for the unsubsidized loan. Unlike the subsidized loan, the borrower must pay all interest that begins to accrue immediately upon disbursement regardless of enrollment status or loan deferments. Interest can be paid monthly, quarterly, or be capitalized (added to the principal balance).

The Direct Loan amount for an academic period cannot exceed the student's cost of attendance (as determined by the educational institution) less the student's estimated financial assistance and, if the loan is a subsidized loan, expected family contribution.

What do I need to do to obtain a loan?

You will need to have completed a 2010-2011 FAFSA.  Then, you MUST complete a Direct Loan Master Promissory Note (MPN) before your loan is eligible to be processed.  This can be completed at www.studentloans.gov.  You will need the same PIN that you used to complete your FAFSA to sign into the website.  If you do not have a PIN, you may obtain a PIN at www.pin.ed.gov.  If you have forgotten or misplaced your PIN, you may obtain a duplicate PIN at the same website.  You accept your Direct Loan when you sign the MCU Financial Aid Award Letter.

Eligibility Criteria

To be eligible for either of these loans, the student must:

• Be enrolled or accepted for enrollment at least half-time in an eligible degree or certificate program at an eligible institution.
• Have a high school diploma or equivalent.
• Be in good standing and making satisfactory academic progress if currently enrolled.
• Be a citizen, permanent resident, or eligible non-citizen of the United States.
• Not be in default or owe a refund on any federal education grant or loan unless satisfactory arrangements have been made to repay the outstanding debt.

Financial need is determined for the Subsidized Direct Loan before eligibility is determined for the Unsubsidized Direct Loan. Schools will determine the student's eligibility.

Loan Limits

A borrower may receive a subsidized loan, an unsubsidized loan, or a combination of both for an academic period. However, the amount of one loan or a combination of both loans may not exceed the loan limits for an academic year based on the borrower's dependency status, grade level, and the length of the program of study in which the borrower is enrolled.

Direct Annual Loan Limits

The total maximum outstanding debt allowed is:

Direct Aggregate Loan Limits

These aggregate limits include both Direct Subsidized and Unsubsidized Loans and any subsidized and unsubsidized Federal Stafford Loans received through the Federal Family Education Loan Program (FFELP).

KHEAA Marketplace

Shop for a private loan at the KHEAA Student Loan Marketplace (www.kheaamarketplace.com) to instantly compare upfront, accurate rates and terms from multiple lenders--not "as low as" advertisements.  Learn smart borrowing habits and evaluate your options side-by-side to make an informed decision about the most appropriate loan for you.

The Marketplace displays products from local and national lenders, complete with detailed listings of APRs, interest rates, total cost, monthly payments, borrower benefits, fees, and repayment options.