Federal Student Loans

By completing the FAFSA a student is automatically applying for federal student loans. Students must meet all eligibility criteria in order to receive a federal loan. Once the loan has been accepted, if the student is a first time loan borrower at MMA, he/she must complete Loan Entrance Counseling as well as sign a Direct Loan Master Promissory Note, promising to repay the loan.

Federal Direct Subsidized Stafford Loan

  • must be repaid
  • based on financial need
  • no interest charged while you are in school at least half-time
  • Variable interest rate based on the 10 year Treasury bill
  • Interest rate typically changes every July 1st for the upcoming academic year
  • Interest rate remains fixed for the life of that loan
  • Interest rate is capped at 8.25%
  • Rate for 2020-2021 is 2.75%
  • Must complete DL Entrance Counseling
  • Must sign DL Master Promissory Note
  • Repayment begins six months after graduation, withdrawal or dropping below half-time enrollment
  • 6 month grace period before loan goes into repayment and interest begins
  • Borrower information is submitted to the National Student Loan Data System (NSLDS) accessible by guaranty agencies, lender and schools.  This system is used nationally to maintain records of all federal loan borrowers. 

 

  • Federal Direct Unsubsidized Stafford Loan
  • must be repaid
  • not based on financial need
  • interest charged while you are in school
  • Variable interest rate is based on the 10 year Treasury bill
  • Interest rate typically changes every July 1st for the upcoming academic year
  • Interest rate remains fixed for the life of that loan
  • Interest rate is capped at 8.25%
  • Rate for 20-21 is 2.75%
  • Must complete DL Entrance Counseling
  • Must sign DL Master Promissory Note
  • Repayment begins six months after graduation, withdrawal or dropping below half-time enrollment
  • 6 month grace period before loan goes into repayment
  • Borrower information is submitted to the National Student Loan Data System (NSLDS) accessible by guaranty agencies, lender and schools.  This system is used nationally to maintain records of all federal loan borrowers. 

 

Federal Direct Unsubsidized Stafford Loans for Graduate Students

  • must be repaid
  • not based on financial need
  • interest charged while you are in school at least half-time
  • Variable interest rate is variable-fixed based on the 10 year Treasury bill
  • Interest rate typically changes every July 1st for the upcoming academic year
  • Interest rate remains fixed for the life of that loan
  • Interest rate is capped at 9.5%
  • Rate for 20-21 is 4.3%
  • Must complete DL Entrance Counseling
  • Must sign DL Master Promissory Note
  • Repayment begins six months after graduation, withdrawal or dropping below half-time enrollment
  • 6 month grace period before loan goes into repayment
  • Borrower information is submitted to the National Student Loan Data System (NSLDS) accessible by guaranty agencies, lender and schools.  This system is used nationally to maintain records of all federal loan borrowers.

Federal Direct Stafford Loan limits are as follows:

Year in School    
First Year (0 - 30 credits) $5,500 – no more than $3,500 of this amount may be subsidized $9,500 – no more than $3,500 of this amount may be subsidized
Second Year (31 - 60 credits) $6,500 – no more than $4,500 of this amount may be subsidized $10,500 – no more than $6,500 of this amount may be subsidized
Third and beyond (each year) (61+ credits) $7,500 – no more than $5,500 of this amount may be subsidized $12,500 – no more than $5,500 of this amount may be subsidized
Max. total debt allowed as undergrad when you graduate $31,000 – no more than $23,000 of this amount may be subsidized $57,500 – no more than $23,000 of this amount may be subsidized

Students enrolled in a 4 year degree program, who take longer than 4 years to achieve their undergraduate degree

  • may receive the Federal Direct Subsidized Stafford Loan for up to the equivalent of 6 years of full time study. 
  • After 6 years, the student may only receive funding through the Federal Direct Unsubsidized Stafford Loan, even if s/he has not borrowed the aggregate limit through the Subsidized Loan ($23,000)
  • For a student who received Subsidized Stafford Loan and does not finish their undergraduate program in 6 years, not only will they no longer qualify for any additional Subsidized Loan, but they will also lose the subsidy on all prior Subsidized Loan after the 6 year point.

 

 To finalize any Federal loan(s) students must:

Loans will be cancelled for students who fail to complete these two requirements.  Detailed terms and conditions for the Federal Direct Stafford Loan can be found on the actual Master Promissory Note that the student must sign.

Students must complete Direct Loan Exit Counseling upon leaving MMA

  • Given detailed information regarding only Federal Stafford Loans borrowed
  • Not given information regarding Parent or Private loans borrowed
  • Given opportunity to select repayment plan
  • Given access to interactive repayment calculators

Some families also borrow through other loan programs (Federal Direct Parent PLUS Loan; Private, state-funded alternative loan; private lender-funded alternative loan)

  • These are credit based loans
  • Require a credit-worthy borrower and/or co-signer
  • Co-signer is equally responsible for repayment
  • Can not be consolidated into a Federal Consolidation Loan with student's other Federal Loan
  • Can be consolidated with federal student loans through a private loan consolidation program
  • You should stay with the same lender each year to reduce number of different loan bills each month
  •  Details regarding these options can be found on our ‘other funding options’ link