Student Loans and Application Procedures

Federal Stafford Loans

Students will be awarded either the subsidized and/or unsubsidized Federal Stafford Loans after they have completed the Free Application for Federal Student Aid (FAFSA). Methodist College will send an award letter that includes the amounts of these and any other available funds. Students who have never received a Federal Stafford Loan through the college will need to complete loan entrance counseling and a master promissory note in order to receive these funds. Students who have already received funding at Methodist College from the Federal Stafford Loan program do not need to complete either of these processes and will automatically be certified for the amounts on their award letters. Loan amounts may change at the request of the student or if other funding is received in place of these funds.

Additional information about federal student loans and resources about the terms and conditions of these loans can be found here: https://studentaid.gov/understand-aid/types/loans
Repayment plans and information can be found here:
https://studentaid.gov/manage-loans/repayment/plans

Subsidized and Unsubsidized Loan Limits

The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans.

Year	Dependent Students (except students whose parents are unable to obtain PLUS Loans)	Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
First-Year Undergraduate Annual Loan Limit	$5,500 - No more than $3,500 of this amount may be in subsidized loans.	$9,500 - No more than $3,500 of this amount may be in subsidized loans.
Second-Year Undergraduate Annual Loan Limit	$6,500 - No more than $4,500 of this amount may be in subsidized loans.	$10,500 - No more than $4,500 of this amount may be in subsidized loans.
Third-Year and Beyond Undergraduate Annual Loan Limit	$7,500 - No more than $5,500 of this amount may be in subsidized loans.	$12,500 - No more than $5,500 of this amount may be in subsidized loans.
Graduate or Professional Students Annual Loan Limit	Not Applicable (all graduate and professional students are considered independent)	$20,500 (unsubsidized only)
Subsidized and Unsubsidized Aggregate Loan Limit	$31,000 - No more than $23,000 of this amount may be in subsidized loans.	$57,500 for undergraduates - No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students - No more than $65,600 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

Source: https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized

Loan Descriptions

The Direct Subsidized Loan is a low-interest loan made available to students who attend school at least half time. Direct Subsidized Loans currently have a fixed interest rate of 3.73%.  Only students who demonstrate financial need qualify for the subsidized loan. As the name implies, the federal government pays the interest while you are still in school as at least a half-time student.

The Direct Unsubsidized Loan is a low-interest loan made available to students who attend school at least half time. 

• The interest rate for Direct Unsubsidized loans for undergraduates is a fixed 3.73%. 
• The interest rate for Direct Unsubsidized loans for graduates is a fixed 5.28% 

Eligibility for a unsubsidized loan does not require financial need, and the interest starts accruing when the loan is disbursed.

The Direct PLUS Loan are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify. For Direct PLUS Loans first disbursed on or after July 1, 2021, and before July 1, 2022, the interest rate is 6.28%. This is a fixed interest rate for the life of the loan.

Source: https://studentaid.gov/understand-aid/types/loans

Alternative/Private Educational Loans are loans offered by many banks or lending institutions. These loans are available to students to assist with their educational expenses. Undergraduate students with a good credit history may be eligible to borrow without a co-signer.  Students desiring an alternative or private educational loan must contact the Director of Financial Aid to discuss specific options. 

Loans for Graduate Students

The U.S. Department of Education makes Direct PLUS Loans to eligible graduate or professional students through schools participating in the Direct Loan Program.  A Direct PLUS Loan is commonly referred to as a grad PLUS loan when made to a graduate or professional student.  To receive a grad PLUS loan, you must

• be a graduate or professional student enrolled at least half-time at an eligible school in a program leading to a graduate or professional degree or certificate;
• not have an adverse credit history (unless you meet certain additional eligibility requirements); and
• meet the general eligibility requirements for federal student aid.

For Direct PLUS Loans first disbursed on or after July 1, 2021, and before July 1, 2022, the interest rate is 6.28%. This is a fixed interest rate for the life of the loan.

Source: https://studentaid.gov/understand-aid/types/loans/plus/grad

• Keep track of how much you're borrowing. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it's important not to borrow more than you need for your school-related expenses.
• Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can also use the U.S. Department of Labor's Occupational Outlook Handbook or career search tool to research careers and salaries.
• Understand the terms of your loan and keep copies of your loan documents. When you sign your promissory note, you are agreeing to repay the loan according to the terms of the note even if you don't complete your education, can't get a job after you complete the program, or you didn't like the education you received.
• Make payments on time. You are required to make payments on time even if you don't receive a bill, repayment notice, or a reminder. You must pay the full amount required by your repayment plan, as partial payments do not fulfill your obligation to repay your student loan on time.
• Keep in touch with your loan servicer. Notify your loan servicer when you graduate; withdraw from school; drop below half-time status; transfer to another school; or change your name, address, or Social Security number. You also should contact your servicer if you're having trouble making your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing.

Students and parents who have loans disbursed at Methodist College will have those loans submitted to the National Student Loan Data System (NSLDS).  Those loans will be accessible by guaranty agencies, lenders, and institutions determined to be authorized users of the data system.