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” only to 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.
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.
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.
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.
In order to be considered for a Direct Loan, students must meet the following eligibility requirements:
Subsidized = Cost of Attendance (COA) – Expected Family Contribution (EFC) – Expected Financial Assistance
Unsubsidized = Cost of Attendance (COA) – Expected Financial Assistance
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.
For the 2019-2020 academic year, the interest rate on subsidized and unsubsidized Direct Loans is 4.53%.
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.
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 website. Click on the “Entrance and Exit Counseling” option and then select “Entrance Counseling.”
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 website. Click on”Complete MPN” and then be sure to select “Subsidized/Unsubsidized “.
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 website. Click on “Complete Counseling” and then select “Exit Counseling”.
Lake Land College disburses loan money by crediting the student’s account and will mail any excess funds directly to the student. All loans require two separate but equal disbursements.
When you receive your Direct 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 Direct Loans and to determine your Direct Loan servicer, you may log in to My Federal Student Aid.
Typically, repayment of a Direct Loan begins 6 months after the student is no longer enrolled at least half-time or graduates.
Log in to the Laker 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.
A PLUS loan is a loan that parents of dependent students can receive to cover educational expenses for their dependent undergraduate student.
In order to be considered for a PLUS loan, a parent must meet the following eligibility requirements:
Parents can borrow up to the cost of attendance at Lake Land College, minus any other financial aid sources their student is receiving.
For the 2019-2020 academic year the interest rate is 7.08%. Interest accrues on the PLUS loan as soon as the loan is disbursed.
In addition to interest, you pay a loan origination fee that is a percentage of the principal amount of each 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.
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 you receive your 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.
Typically, repayment of a 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.
Parents wishing to apply for a PLUS loan should complete the following steps: