Loans

Federal Direct Loans for students

This is a low-interest educational loan for students.  If you want to receive this loan, please be sure to complete and sign the Financial Aid Direct Loan Request Form.  First-time Federal Direct Loan Borrowers at Menlo College must also complete a Federal Direct Loan Master Promissory Note (MPN) as well as Entrance Loan Counseling online at www.studentloans.gov.  There is a 1% federal origination fee withheld from each loan.

Loan Limits

Federal Direct Subsidized and Unsubsidized Loans:  These educational, low-interest loans are available to all FASFA filers who are attending school at least half-time.  The amount a student qualifies for is dependent upon grade level. 

	Dependent Undergraduate	Independent Undergraduate
Freshman	$5,500, only $3,500 of this amount can be subsidized	$9,500, only $3,500 of this amount can be subsidized
Sophomore	$6,500, only $4,500 of this amount can be subsidized	$10,500, only $4,500 of this amount can be subsidized
Junior	$7,500, only $5,500 of this amount can be subsidized	$12,500, only $5,500 of this amount can be subsidized
Senior	$7,500, only $5,500 of this amount can be subsidized	$12,500, only $5,500 of this amount can be subsidized

Subsidized: This loan is based on need and is interest-free while attending school at least half-time. A 1% origination fee will be withheld from the loan amount by Federal Direct Lending. Once a student stops attending school at least half-time, there is a 6-month grace period, after which interest will accrue and payments will be expected by the lender.

Unsubsidized: This loan is available to independent students and students who do not demonstrate need, but still wish to borrow. Unsubsidized loans will accrue interest once the lender disburses the funds. A 1% origination fee will be withheld from the loan amount by Federal Direct Lending. Students are responsible for that interest for the life of the loan. If students choose they may defer payments on the interest while enrolled at least half-time and have it capitalized, making it part of the principal. Once a student stops attending school at least half-time, there is a 6-month grace period, after which interest will accrue and payments will be expected by the lender.

Student Loan Repayment Examples

There are several types of repayment plans offered for Federal Direct Loans to fit your financial situation. Generally, you'll have from 10 to 25 years to repay your loan, depending on which repayment plan you choose. Visit www.studentloans.gov to learn about what types of repayment plans are offered. 

For example: Student A, a dependent undergraduate student, receives the maximum unsubsidized Federal Direct Loan amount for their freshman year of college, Student A’s total loan amount would be $5,500. Student B received the maximum unsubsidized Federal Direct Loan amount for all four years of college, Student B’s total loan amount would be $27,000. With a repayment term of 10 years, and an interest rate of 6.8%, the students’ repayment plans might look something like this: 

	Total Loan Amount	Interest Rate	Length of Time to Repay Loan	Monthly Payment	Total Payments (Interest plus Principal)
Student A	$5,500	6.8%	10 years	$63.29	$7,954.80
Student B	$27,000	6.8%	10 years	$310.72	$37,286.40

These amounts were calculated with the U.S. Department of Education’s Repayment Calculator which can be found at www.studentloans.gov under Managing Repayments, and in Repayment Plans and Calculators.

Federal Parent PLUS Loan for parents

This loan is available to parents of dependent students and requires a credit check. Continuing PLUS loan borrowers must receive a new credit pre-approval for each academic year, but they are not required to complete another PLUS Direct Loan Master Promissory Note (MPN) if they already have one on file.  The interest rate on a Federal Direct PLUS loan is currently fixed at 7.9%.  There is a 4% loan origination fee withheld from each loan.  Generally, repayment begins within 60 days after the second semester’s loan distribution.   However, borrowers can request deferment.  The maximum amount that can be borrowed from a PLUS loan is the Cost of Attendance minus any other financial aid a student may receive for the academic year.