Federal Direct Loans For 2012-2013
The Health Care and
Education Reconciliation Act of 2010 - HR 4872 was recently signed by
President Obama. This Act requires that all Federal Stafford and PLUS
loans for the 2011-2012 Academic Year be processed through the William
D. Ford Federal Direct Loan Program.
What is a Federal Direct Stafford
Federal Direct loans are one form of student aid from the federal
government that you may be offered on your award letter. Under the
Federal Direct loan program students borrow money for school from the
federal government. Loans are a major form of self-help aid for
students. A loan must be repaid in full, including any interest and
fees. Student loans have long repayment periods and generally repayment
will not begin until you leave school. Interest rates vary, depending
on the type of loan you borrow. The promissory note you sign will
contain the exact terms of the loan you are borrowing. Keep your copy
The Center for Student Services encourages students to explore
various grants and scholarship opportunities and to evaluate loan
options carefully. Borrow only what is really needed and remember that
loans must be repaid.
To Borrow or Not To Borrow
By accepting a Federal Direct Student Loan, you incur a binding
obligation to repay the loan in full, including interest and any
applicable fees. It is essential that when you plan for educational
costs, you also plan for future repayment of any amounts you have
borrowed. When making the decision whether or not to accept a loan, you
should be aware of all the requirements, interest rates, repayment
options, schedules and deferment options.
Some pointers on how to borrow wisely:
How much can I borrow?
- Look into local resources of financial aid from community
organizations and civic groups.
- Repay your debt as soon as possible. The longer you owe,
the more you owe.
- To help secure your financial future, monitor the status of
your loans and your repayment history and repay your loan on time.
|Annual Federal Direct Loan
Limits for Dependent Students
(effective July 1, 2011)
|Year in School
||Base Subsidized/Unsubsidized Amount
||Additional Unsubsidized Amount
||Additional Unsubsidized if parent is denied PLUS loan
What is the Interest Rate?
- 3.4% for subsidied loans first
disbursed between 7/1/12 – 6/30/13
The rate for loans disbursed prior to July 1, 2006 is variable (subject
to change each year) but does not exceed 8.25%. Variable interest rates
are adjusted each year on July 1. You will be notified of variable
interest rate changes throughout the life of your loan. If you have
subsidized loans, you will not be charged interest while enrolled in
school at least half time.
Repayment begins six months after graduation or after a student drops below halftime status. Subsidized loans first disbursed on or after July 1, 2012 and before July 1, 2014, will not have the interest subsidy provided during the 6 month grace period. Students receiving a subsidized loan during this timeframe will be responsible for the interest that accrues on the loan during the grace period. If a student does not pay the interest accrued, the interest will be added (capitalized) to the principal amount of their loan when the grace period ends.
If you have unsubsidized loans, you'll be charged interest
from the day the loan is disbursed until it is paid in full, including
during in-school, grace, and deferment periods. You can pay interest
during these periods or it can be capitalized.
What is the difference
between a subsidized and an unsubsidized loan?
For the Federal Direct Subsidized Loan,
you will not be charged interest while you are enrolled at least half-time
(including leaves of absence). The interest rate for Federal Direct
Subsidized Loans disbursed on or after July 1, 2012 will be 3.4%.
For the Federal Direct Unsubsidized Loan,
the government will not pay interest while a student is in school as it
does for the subsidized loan. Interest accrues and must be paid or
capitalized during periods of enrollment in school and/or deferment.
The interest rate for Federal Direct Unsubsidized Loans for all
students disbursed on or after July 1, 2011 will be 6.8%.
Are there any federal
loans available to parents?
The Federal Direct PLUS Loan (parent loan for undergraduate students)
is a loan from the U.S. Department of Education for parents of
undergraduate students who complete a FAFSA. Your parent(s) should
evaluate whether or not there is a need to borrow in order to assist in
the financing of your education. The maximum amount your parent will be
eligible to borrow for the 2010-2011 school year will be indicated on
your MMC award letter. 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 MMC including tuition, fees, and room and board for
resident students. Indirect costs consist of all other expenses that
relate to attendance at MMC. The interest rate on PLUS loans is 7.9%.
What fees, if any, are
associated with these loans?
For Direct Student Loans, an origination fee of 1.0% of the total loan
will be assessed. For PLUS loans, an origination fee of 4.0% will be assessed. The net disbursement will
reflect these fees; therefore, the amount credited to the student's
account will be less than the loan amount. This fee is determined by
the U.S. Department of Education.
How do I apply for a Federal
What You Need
- Your Federal PIN
- Computer browser compatibility
To view this Web site
effectively, you will need one of the following supported browsers from
either Microsoft or Mozilla. Under "Learn
More" on the website you can download these browsers. If you
are using a browser that is not supported, your view and interaction
with this site may be significantly impaired.
For Windows & For Apple Macintosh:
MS Internet Explorer 7 or higher
Step 1: All students who wish to borrow a Federal
Direct Stafford Loan must complete a Federal Student Loan
Entrance Counseling Session in accordance with federal
of Education website
- Click "Sign In" you will need your FAFSA Personal
Identification Number (PIN) in order to complete. If you do not have a
PIN or cannot recall it, you can request your PIN here.
- Click on Entrance Counseling. (When selecting a school
during entrance counseling, search for "Marymount Manhattan College"
without using abbreviations.)
Step 2: All Direct Loan borrowers must complete a Direct
Loan Master Promissory Note (MPN).
How does my parent apply for a
Federal Direct PLUS loan?
of Education website
- Borrowers will need their FAFSA Personal Identification
Number (PIN) in order to complete the MPN. If you do not have a PIN or
cannot recall it, you can request your PIN here.
Parent Loan for Undergraduate Students (PLUS) Process
All parent borrowers must have their credit history checked by the
Department of Education. Approved borrowers will then have to complete
a Master Promissory Note in order to obtain a loan.
of Education website
- Click "Sign In" you will need your FAFSA Personal
Identification Number (PIN) in order to complete. If you do not have a
PIN or cannot recall it, you can request your PIN
- Click on Start PLUS process
- If approved complete PLUS MPN
It is important to remember the
- MMC will automatically be notified by the federal processor
when an MPN or entrance interview has been completed and will send a
school certification to the U.S. Department of Education.
- In order for you to receive credit for your loans on your
student bill, you must complete the loan process
and complete verification if selected.
- Loan funds are traditionally disbursed in two installments,
a fall disbursement and a spring disbursement, and applied to your
- Your repayment period varies from 10 to 25 years depending
on which repayment plan you choose. You can prepay your student loans
at any time without a penalty. You have the right to cancel all or part
of your loan until 30 days after disbursement.
Where can I learn about the various
Federal Direct loan programs?
this Department of Education website to obtain a copy of Your
Federal Student Loans: Learn the Basics and Manage Your Debt which
provides detailed information on federal student loan borrower's rights
- 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 NSLDS.
Alternative Private Loans For 2012-2013
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. Marymount Manhattan
College encourages all students and their families to carefully
consider all available financing options first before considering a
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. ( Regulation Z)
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 MMC. This information will be used by the
lender as part of the eligibility determination process.
Marymount Manhattan College is not a lender and is not engaged in
rendering legal, accounting, financial planning, or other professional
services. We recommend that you consult with your own expert advisors
before making educational financing decisions. Students and parents
have the right and ability to select the education loan provider of
- MMC staff member can not accept any gift worth more than
$10 from a representative of a student loan provider. The Department of
Education has defined "gift" as:
- Any gratuity, favor, discount, entertainment,
hospitality, loan or other item valued at more than a de minimus
- "The term includes services, transportation, lodging, or
meals, whether provided in kind, by purchase of a ticket, payment in
advance, or by reimbursement.
- Staff can participate in meals,
refreshments, and receptions in conjunction with professional
association meetings, trainings, or conference events open to all
- Staff members shall not accept any remuneration or
expense-reimbursement for serving as a member of a lender's advisory
board. No staff members of the Office of Scholarships and Financial Aid
serve as a member of a lender's advisory board.
- Staff may participate on advisory boards that are unrelated
in any way to higher education loans.
- Marymount Manhattan College does not have a revenue-sharing
arrangement with any student loan provider. These agreements are
- Lender account representatives are not permitted to work
within the Financial Aid Office or to pass themselves off as employees
of the College.
on How to choose a Lender
Step 1: Select a Lender
Students need to do their home work and 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. Meaning 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.
At Marymount Manhattan College, we believe that students and
parents have the right and ability to select the education loan
provider of their choice. Our Financial Aid office works with all
lenders and guarantors to ensure the accurate and timely processing of
Federal loans, and private loans on behalf of our students and their
Step 2:Complete Private loan application process
through Lender of your choice.
When applying for an alternative / private loan, lenders will require
you to complete a Private Education Loan Self- Certification form. If
they do not provide you with a way to complete this form online then
you can download the form from our website. Private Education Loan
Self-Certification Form. Click
to download the form.
- To calculate your cost of attendance you can use the
Click here for standard cost of attendance information
- To calculate your tuition cost go to our Tuition
Information web page or log onto your MMC Connect account and view your
term bill and use it to estimate the tuition cost related to the term
of your loan.
- Your estimated financial assistance is available on the
"Award Package by Aid Year" or by logging onto your MMC Connect account.
Important note: The Cost of Attendance
information provided is based on standard enrollment of full time.
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 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
- Maximum eligibility is your Cost of Attendance, which
includes tuition, fees, and living expenses minus the other financial
aid you are receiving
- MMC 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. Please note it is the responsibility of the
borrower to ensure that the Financial Aid Office receives any
certification requests from lenders.
Step 4: School Certification
Once the loan has been approved MMC 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
If you choose a lender that does not disburse funds via
Electronic Funds Transfer( EFT), then a paper check will be issued to
MMC and the student. The paper check will require endorsement from the
borrower before funds will be credited to the student's account. The
Center for Student Services 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
Direct to Consumer Loans:
MMC 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 MMC.