What are student loans?
Student loans are educational funds that must be repaid with interest. We strongly encourage you to consider all other options for financing your education first, and use a student loan only as a "last resort."
Lake Land College participates in the Federal Direct Loan program.
Under the Federal Direct Loan program, loan eligibility is determined by the Lake Land College Financial Aid Office and the loans are made by the U.S. Department of Education.
We recommend you also visit Federal Student Aid for additional information on student loans.
What types of student loans are available?
There are two types of federal loans available, Direct Loans for students and Parent Loans for Undergraduate Students (PLUS) for parents. Private loans may also be available. Students must seek out a private loan through the lender of their choice and Lake Land may or may not certify the loan depending on eligibility requirements.
Federal Direct Loan Program
How do I qualify for a Federal Direct Loan?
You must complete the Free Application for Federal Student Aid (FAFSA) in order to be considered for a Direct loan. There are two types of Direct Loans: subsidized and unsubsidized.
A subsidized Direct loan is a need-based loan which means students must demonstrate need according to data submitted on the FAFSA. Interest begins accruing on the loan at the time the loan funds are disbursed, but the federal government pays (subsidizes) the interest for students while they are enrolled in school on at least a half-time basis.
An unsubsidized Direct loan is not based on need. Interest begins accruing on the loan at the time the loan funds are disbursed and the student is responsible for paying the interest while in school. Interest can be capitalized which means the student would not have to pay the interest while in school, but the interest accruing is added to the amount borrowed, so the loan amount continues to increase.
To be considered for a Direct Loan you must meet the following eligibility requirements:
||Apply for financial aid using the FAFSA
||Have a completed and verified student aid record on file
||Complete the Online Student Loan Request found in the Lake Land Hub
||Be admitted to LLC in a degree seeking program or approved certificate program
||Meet Satisfactory Academic Progress Standards
||Be enrolled in at least six credit hours
||Not be in default on any educational loan, show an unwillingness to repay an educational loan, or owe any refund on a grant or student loan
How much can I borrow under the Direct Loan Program?
|Per Semester Limit
||0 – 28.5 hours
||29 hours +
Additional unsubsidized loan funds may be available for students with remaining unmet cost of attendance. Students are required to meet with a financial aid advisor for loan counseling and to discuss available non-loan options.
We strongly advise students to only borrow what is absolutely needed. Lake Land College is a low-cost institution, and we want to keep your student loan debt at a minimum upon graduation or transfer to a four-year institution.
Formula to determine financial eligibility
Subsidized = Cost of Attendance (COA) - Expected Family Contribution (EFC) - Expected Financial Assistance
Unsubsidized = Cost of Attendance (COA) – Expected Financial Assistance
What is the interest rate on Direct Loans?
For the 2014-15 academic year, the interest rate on subsidized and unsubsidized Direct loans is 4.66%.
What is Entrance Loan Counseling?
Because borrowing under the Direct loan program is a serious financial obligation that should not be entered into lightly, all students who borrow a Direct loan must complete an entrance loan counseling session before loan funds can be disbursed.
The entrance loan counseling session is designed to inform students about their rights and responsibilities as a borrower, explain the importance of loan repayment, and make sure students understand the consequence of defaulting on a student loan.
Students complete the online loan counseling through the U.S. Department of Education's Direct Loans Web site. Click on the Entrance and Exit Counseling option and then select "Entrance Counseling."
How do I sign my Master Promissory Note?
Because Direct loans must be repaid with interest, all students borrowing under the Direct loan program must sign a promissory note. This is your promise to repay the loan and it is a legally-binding document between you and the U.S. Department of Education. The MPN is completed online through the U.S. Department of Education’s Direct Loans Web site. Select "Complete MPN" and then be sure to select "Subsidized/Unsubsidized ".
What is Exit Loan Counseling?
When a student graduates or drops below half-time attendance, exit loan counseling must be completed. The exit loan counseling session will review your repayment obligation, provide information regarding monthly repayment amounts, explain deferment and forbearance options and stress the serious consequences of defaulting on a federal student loan. Students complete the online exit counseling through the U.S. Department of Education’s Direct Loans Web site. Click on "Complete Counseling" and then select "Exit Counseling".
How do I Request a Federal Direct Loan?
You must log in to the Lake Land Hub and select "Request a Student Loan" under the Financial Aid section.
Be sure to read and complete all required steps, including the Master Promissory Note and online entrance counseling at the end of the request.
Direct Loan 150% Loan Limit Rule
As of July 1st, 2013, any first-time borrower, (which is defined as someone who has no outstanding balance on a FFELP or Direct loan when receiving a Direct loan on or after July 1, 2013), will only be able to obtain federal Direct Subsidized loans for a maximum of 150% of the published program length in which they are enrolled. Additionally, the subsidized loans that had been borrowed up to the 150% point will lose further government subsidy and interest will begin to become the student's responsibility if they do not graduate by the 150% point (and continue to be enrolled in the same or a shorter undergraduate program). From that point forward, these subsidized loans will become unsubsidized loans.
- Students may receive Direct Subsidized loans for no more than 150% of the length of the current academic program. For example, a student enrolled in a two-year program will have three years' worth of subsidized loan eligibility and a student enrolled in a four-year program will have six years' worth of subsidized loan eligibility.
- Once a student reaches the 150% mark in a particular program, their future subsidized loan eligibility in that program will end. They may, however, be eligible for unsubsidized loans.
- A student who reaches the 150% limitation will have their interest subsidy end for all outstanding subsidized loans if the student does not graduate and continues to be enrolled in the same or a shorter undergraduate program. Repayment does not begin, but like unsubsidized loans, the student (rather than the government) would become responsible for interest that accrues from this point forward.
- Unlike other measures in determining continued aid eligibility, this provision is not affected by the total dollar amount borrowed. Any and all periods of subsidized loan borrowing will count against the 150% time limit.
- This policy is in addition to, and not in place of, the lifetime aggregate loan limits that are currently in place.
What is a PLUS Loan?
A PLUS loan is a loan that parents of dependent students can receive to cover educational expenses for their dependent undergraduate student.
Click here to learn more about the different PLUS Loans at the U.S. Department of Education
How much can a parent borrow, and what is the interest rate on the loan?
Parents can borrow up to the cost of attendance at LLC, less any financial aid their student is receiving. For the 2014-2015 academic year the interest rate is 7.21% and interest accrues on the PLUS loan as soon as the loan is disbursed.
Formula to determine financial eligibility
PLUS loan = Cost of Attendance (COA) – other financial aid received
Is there a charge for the PLUS loan?
Yes. In addition to interest, you pay a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that you receive. The fee is deducted before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.
How do parents apply for a PLUS Loan?
What are the eligibility requirements for a parent to get a Direct PLUS Loan?
- You must be the biological or adoptive parent (or in some cases, the stepparent) of the student for whom you are borrowing.
- Your child must be a dependent student who is enrolled at least half-time.
- You cannot have an adverse credit history (a credit check will be performed).
- You and your child must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs.
How will I receive PLUS loan money?
Lake Land College disburses loan money by crediting the student’s account, and will mail any excess funds directly to the parent. Loan money is always disbursed in at least two installments.
When do I have to begin repaying my PLUS Loan?
Repayment of a Direct PLUS Loan begins 60 days after the full amount you have borrowed for a school year has been disbursed unless the parent opts to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after the student is no longer enrolled at least half-time. If you are a parent borrower, you may contact your loan servicer to request a deferment..
How much time will I have to repay my loan, and how much will I have to pay each month?
When you receive your Direct PLUS loan, you will be contacted by your loan servicer. The loan servicer will provide you with information on how and when to repay your loan. For more information on PLUS Loans and to determine your PLUS loan servicer, you may log in to My Federal Student Aid.
Student Loan Resources
Visit the Department of Education's Student Loan website to manage your Direct Loans, complete a Master Promissory Note, complete Online Entrance Counseling, and complete Online Exit Counseling. Parents wishing to request a Parent PLUS loan must complete the application and Master Promissory Note through this website.www.studentloans.gov
||My Federal Student Aid
For the most complete information about financial aid programs and student loans, you will want to visit the Department of Education’s Federal Student Aid website. You may also quickly log in to this website and access the My Federal Student Aid section which will show you your student loans and lenders. www.studentaid.ed.gov
||National Student Loan Data System (NSLDS)
Visit NSLDS to review your student loan history. www.nslds.ed.gov
||Lake Land College Financial Aid Office
You should check the status of your student loan on IRIS within the Lake Land hub. Any important information or updates regarding your student loan will be sent to your LLC student email address. Be sure to check it regularly.
Any unanswered questions can be directed to firstname.lastname@example.org for a quick and complete response.