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Loans
Mississippi College's Office of Financial Aid administers a variety of loan programs for students who need financial assistance.
Often a part of a financial aid package, loans provide students with an opportunity to invest in their future, typically at
interest rates lower than those on the commercial market. Students at Mississippi College who borrow wisely are acquiring
marketable skills which will enable them to repay their loans.
Educational loans are the largest financial resource available to students pursuing post-secondary education. Student loan
programs allow students to borrow money at low interest rates, with no collateral, and generally no co-signer. Most student
loans do not need to be repaid until the student graduates or drops to less-than-half-time status.
Students are reminded that borrowing money for college is a serious financial obligation. In addition to the principal
borrowed, interest is generally charged for use of funds. It is important to remember that when you borrow money it must
eventually be repaid. When signing a loan promissory note, you enter into a legal, ethical agreement. Legally, you will
be required to sign the note promising to repay the loan. Ethically, you are responsible to future borrowers, since
collections from old loans are major funding sources for new loans. Think about this commitment carefully when taking
out a loan, and consider how much you reasonably can afford to repay.
How to Apply:
At Mississippi College, eligibility for student loans requires that students apply for financial aid using the
Free Application for Federal Student Aid (FAFSA).
Once the application process is complete, the Office of Financial Aid sends each student a Financial Aid Award Notification.
Students accept the loan(s) awarded by signing and returning the Loan acceptance Form.
For Stafford loans, the student will also indicate their lender of choice. The Office of Financial Aid maintains a list of Lenders
recommended by Mississippi College,that have a reputation for excellent customer seruice.
The Master Promissory Note (MPN) is the new method for all students to apply for their Stafford Loans.
The initial MPN application, which replaces the Common Stafford Application, may represent the one and only time you
are required to complete a loan application.
First-time borrowers at Mississippi College must complete a Loan Entrance Counseling session.
Parent Borrowers who wish to utilize the Federal Parent Loan for a dependent undergraduate student (PLUS)
are required to file a FAFSA.
Stafford Loans
What are Stafford Loans?
The Federal Stafford Loan is available through the Federal Family Educational Loan Program (FFELP) to help both undergraduate and graduate students pay for their education.
There are two types of Stafford Loans -- subsidized and unsubsidized.
The Subsidized Stafford
Loan Eligibility for subsidized loans is based on financial need as determined by federal guidelines. A loan is called "subsidized" because the government pays interest for the student during:
- At least half-time enrollment in school
- The six-month grace period begins after the student ceases attendance on at least a halftime basis.
The Unsubsidized Stafford Loan
This type of loan is available to students regardless of income or need. With an unsubsidized loan, you are responsible for all interest that accrues during in-school, grace and deferment periods. You may choose to pay the interest portion only while in school, which would keep your loan balance at principal. If you choose to defer such payments, the interest will be capitalized, resulting in an increase in both total debt and the amount of monthly payments.
Advantages of the Stafford Loan
- If the interest rate rises above the current federally-mandated cap (8.25%), you do not pay additional interest.
- It carries low origination and guarantee fees (3%). Many other loans have significantly higher fees.
- Repayment of the loan does not begin until 6 months after you graduate or drop below halftime status.
- In case of economic hardship, payments may be deferred, extended, or reduced.
- The loan is forgiven in case of permanent disability or death.
Loans are usually issued for a single academic year, and both eligibility and amount are redetermined annually throughout your academic career.
Eligibility for Stafford Loans
Your Stafford loan eligibility is determined by the Office of Financial Aid and is based on information you provided in the Free Application for Federal Student Aid (FAFSA) .
Federal criteria include:
- Enrollment in an eligible school at least half-time in a degree program
- U.S. citizenship, permanent residency, or eligible non-citizen status
- Satisfactory academic progress (as determined by the Office of Financial Aid)
- No unresolved defaults or overpayments owed on Title IV educational loans and grants
- Satisfaction of all Selective Service Act requirements
How Much Can I Borrow?
Borrowing limits are based on your dependancy status and year in school. You are considered independent if you meet one or more of the following criteria:
- Were you born before January 1, 1985?
- At the beginning of the 2008-2009 school year,will you be working on a master's or doctorate program(such as an MA,MBA,MD,JD,PhD,EdD,or graduate certificate,etc.)?
- As of today, are you married? (Answer "Yes" if you are separated but not divorced.)
- Do you have children who receive more than half of their support from you?
- Do you have dependents (other than your children or spouse) who live with you and who receive more than half of their support from you, now and through June 30, 2009?
- Are (a) both of you parents deceased,or (b) are you (or were you until age 18) a ward/dependent of the court?
- Are you currently serving on active duty in the U.S. Armed Forces for purposes other than training?
See Notes page 3.
- Are you a veteran of the U.S. Armed Forces?
If you do not meet any of the above criteria, you are considered a dependent student for financial aid purposes.
You can never borrow more than the cost of education, less other financial aid received (special rules apply for recipients of Montgomery Chapter 30 VA benefits and Americorps benefits). Below are the maximum amounts you may borrow.
If dependent, your combined subsidized and unsubsidized Stafford annual eligibility is as follows:
| |
Freshman |
Sophomore |
Junior |
Senior |
Graduate |
| Subsidized and/or Unsubsidized |
$3,500 |
$4,500 |
$5,500 |
$5,500 |
N/A |
| If independent, your subsidized and unsubsidized Stafford annual eligibility is as follows: |
| Subsidized |
$3,500 |
$4,500 |
$5,500 |
$5,500 |
$8,500 |
| Unsubsidized |
$6,000 |
$6,000 |
$7,000 |
$7,000 |
$12,000 |
| Total |
$9,500 |
$10,500 |
$12,500 |
$12,500 |
$20,500 |
The aggregate loan limit that may be borrowed as an undergraduate is $31,000 (no more than $23,000 of which may be subsidized) for a dependent
and $57,500 for an independent student (no more than $23,000 of which may be subsidized). The aggregate loan limit for both undergraduate and
graduate loans is $138,500 (no more than $65,500 of which may be subsidized).
Interest Rates
Rates are effective July 1, 2008 - June 30, 2009:
| 6.8% |
Federal Stafford Loans |
|
During in-school, grace, or deferment
Based on the 91-day T-bill plus 1.7%, not to exceed 8.25% |
| 8.5% |
Federal Stafford Loans |
|
During repayment
Based on the 91-day T-bill plus 2.3%, not to exceed 8.25% |
Example:
| Loan amount |
$3,000 |
| Total fees (4%) |
-$120 |
| Amount disbursed Fall |
$1440 |
| Amount disbursed |
$1440 |
Currently, the guarantee fee of 1% is being waived by most guarantors.
The Application Process
Here's a step-by-step guide to the Stafford application process:
- Complete the Free Application for Federal Student Aid (FAFSA) online.
- Students and/or parents of dependent students complete the FAFSA and submit it to the address included in the FAFSA instructions or submit over the web.
- Once your FAFSA is processed, you will receive a Student Aid Report (SAR) documenting your financial resources and expected family contribution towards educational costs. An electronic copy will be sent to the Office of Financial Aid of the school listed on your application. Mississippi College's school code is 00241500.
- Check your SAR for accuracy. If there are errors, follow the correction process indicated on the SAR or as instructed by the Office of Financial Aid.
- From the information obtained in the SAR and other supporting documents, we will generate and send you a Financial Aid Award Notification letter documenting the financial aid available to you including Stafford Loan eligibility.
- The student may accept all or a part of the aid and indicate his/her choice of lender by signing and returning the Borrower's Authorization which is included with the award package.
- The student must complete Loan Entrance Counseling on the Web.
- Once the Financial Aid Award Notification has been signed and returned and Loan Entrance Counseling has been completed, your lender or guarantee agency will send you a school-certified Stafford Loan application/Promissory Note. You might not receive an application if a Master Promissory Note is already on file with the Office of Financial Aid.
- Complete the Stafford Loan Application by e-signature.
- Submit the Stafford application by returning it to either the lender or guarantee agency.
- Once the guarantee agency approves your loan, you will receive a Notice of Guarantee and Disclosure Statement (one document). This is your notice of loan approval, and it contains essential information about the terms and conditions of your loan. It also tells you the amount of your loan and an estimated date for the arrival of funds.
Disbursement of Funds
A check or Electronic Funds Transfer (EFT) will be sent directly to our school. The amount of the proceeds will be the loan amount less the fees. The proceeds will be sent in one or two loan disbursements. The Bursar's Office may require you to come in to sign the check, if your lender does not participate in EFT.
Overawards
Federal and/or State Financial Aid recipients may not receive funds in excess of Financial Need and/or the Cost of Attendance. This may occur when students receive funds from other sources or agencies. When an overaward occurs, the Department of Student Financial Aid and Scholarships is required to adjust the student's financial aid. A student may be required to repay funds due to the loss of eligibility. To prevent an overaward, notify the Department of Student Financial Aid and Scholarships of any assistance you receive that is not listed on your award letter. Examples of other aid include scholarships, military benefits, and Vocational Rehabilitation benefits.
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Parent Loan for Undergraduate Students (PLUS Loans)
What are PLUS Loans?
The Federal Parent Loan for Undergraduate Students (PLUS) is available through the Federal Family Education Loan Program (FFELP) to help you pay for the education of dependent children.
A dependent child is defined as one who:
- was born on or after January 1, 1985
- will not be working on a degree beyond a bachelor's degree during the school year
- is not married
- does not have children or dependents who receive more than half of their support from him/her, now and through June 30, 2009
- is not an orphan or ward of the court or was not a ward of the court until age 18
- is not a veteran of the U.S. Armed Forces
PLUS Loans are not based on financial need but may not exceed the total cost of attendance less any other financial aid. Parents of any eligible undergraduate student may apply regardless of their own income, assets, or those of their dependent child.
Advantages are:
- A cost-effective alternative to depleting savings or retirement accounts, using current income or borrowing against home equity.
- Low Interest.
- There is no repayment penalty.
- The credit criteria are generally more lenient than for private loans.
- In cases of economic hardship, repayment may be deferred for up to three years.
- In the event of permanent or death of the borrower or student, your loan will be forgiven.
Eligibility
Only one credit worthy parent (natural, adoptive or step-parent) is able to apply for a loan each academic year for their dependent undergraduate student. The student must be enrolled in school at least half-time and must maintain Satisfactory Academic Progress. Because the PLUS Loan is not based on financial need, one can apply regardless of income. The Office of Financial Aid determines the amount of PLUS Loan eligibility in accordance with federal requirements.
How Much Can Be Borrowed?
Parents may borrow up to their student's total cost of attendance less other financial aid received such as grants and scholarships. The total cost of attendance is determined by the Office of Financial Aid based on the average cost for tuition, books, room and board, travel, and miscellaneous expenses for the academic year. It is important that each family fully understand how a PLUS Loan will impact them financially. Generally, one should not incur debt that results in total monthly payments exceeding 50 percent of your monthly gross income.
Interest Rates
| 8.5% |
Federal PLUS Loans |
|
Based on the 91-day T-bill plus 3.1%, not to exceed 9.00% |
Loan Fees
Parents are required to pay fees of up to 4 percent of the principal of the loan. These include an origination fee of 3 percent, charged by the federal government, plus a guarantee fee of up to 1 percent, charged by the guarantee agency. These fees are deducted from the principal at each disbursement.
Example:
| Loan Amount |
$11,000 |
| Total Fees (4%) |
-$440 |
| Amount disbursed Fall |
$5,280 |
| Amount disbursed Spring |
$5,280 |
Application Process
- Before applying for a PLUS Loan, the FAFSA must have been filed and received in the Financial Aid Office. To receive a Federal PLUS the parent will need to
contact their lender of choice and apply for the plus loan. The lender will notify the Financial Aid Office of the pre-approval and a plus request form will
be mailed to the parent to complete and return to the Financial Aid Office.
- Once the Plus request form is received, the Student Loan Office will electronically transmit to the appropriate Loan Agency for processing the Federal PLUS
Loan Application data for eligible PLUS Loan award recipients. (Please note that federal regulations prohibit Mississippi College from processing a loan
after the end of the loan period.)
- Your lender or guarantee agency will send you a school-certified PLUS Loan application/Promissory Note.
- Parents/students should review the promissory note for accuracy, sign it and return it to the lender.
Disbursement of Funds
After the lender and guarantor approve the loan, the lender will disburse the funds to MC for eligible students as either an EFT or a check made co-payable to the parent borrower and MC. The disbursement will reflect the amount of the loan less any guarantee and origination fees. The proceeds will be applied to the student's account to clear any balances. Remaining funds will be mailed directly to the parent borrower.
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Federal Perkins Loans
Federal Perkins Loans at an interest rate of 5 percent are available to students pursuing a bachelor's degree and a master's degree who show exceptional financial need. Due to limited funds, this loan at Mississippi College will not exceed $3,000 per year. To apply a student must complete the Free Application for Federal Student Aid (FAFSA) . More information about Perkins Loans is available from the Federal Guide to Student Aid .
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Federal Nursing Loans
Federal Nursing Loans of up to $4,000 per year are available to students pursuing a nursing degree who show exceptional financial need. Due to limited funds, this loan at Mississippi College will not exceed $4,000 per year. To apply a student must complete the Free Application for Federal Student Aid (FAFSA).
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Lender List
Selecting a Lender is an important decision. To assist first-time borrowers in making the decision, we recommend the lenders listed on this page because they have demonstrated their commitment to provide quality service and products to students. If you previously borrowed Stafford Loans, we recommend that you continue to borrow from the same lender in order to manage your student loan debt most efficiently.
When you are determining your student loan lender, three prominent components will guide your decision: cost, convenience, and service.
- How much will the loan cost you in terms of interest and fees?
- How much can you save if you consistently pay promptly?
- How easy is it for you to apply for the loan or get the information you need when you need it?
- Can you count on reliable service worthy of your trust and confidence?
- Does the lender sell your loans or will you be able to contact the same lender from the time you borrow the money until you have made the last payment?
Student loans are meant to help you reach your education goals. Wise decisions about borrowing money and paying it back can help you establish a good credit reputation.
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