Understanding your Loan Options:
- Students can borrow loan funds when other sources are not sufficient to cover tuition expenses. We encourage students to maximize scholarships and summer earnings in order to minimize overall loan debt.
- Loans must be repaid! Any loan amount that is borrowed will have to be repaid along with any interest that accrues on a student loan. Loans should only be used after all other sources of income have been utilized.
Direct Student Loans
The Federal Government provides loan funds to students that can be utilized to help finance higher education.
Students must complete the FAFSA in order to be eligible for federal student loans. These loans are part of the financial aid award but must be repaid after school and will include an additional amount from added interest.
Direct Subsidized vs. Unsubsidized Loans
- Subsidized loans are considered need-based loans
- Eligibility for Subsidized loans is determined based on the Student Aid Index (SAI) from the FAFSA
- The government covers the interest that accrues on Subsidized loans while the student is enrolled in school and during the grace period
- Scholarships and grants received may result in a change in the loan eligibility amount shown on the student’s award letter
- No payments are required during school but unsubsidized loans will accrue interest once the funds have been received from the government
Loan Limits
| GRADE LEVEL | SUBSIDIZED MAXIMUM | TOTAL AMOUNT |
|---|---|---|
| Freshman | $3,500 | $5,500 |
| Sophmore | $4,500 | $6,500 |
| Junior | $5,500 | $7,500 |
| Senior & beyond | $5,500 | $7,500 |
| CUMULATIVE LIMIT | MAXIMUM: $23,000 | MAXIMUM: $31,000 |
| GRADE LEVEL | SUBSIDIZED MAXIMUM | TOTAL AMOUNT |
|---|---|---|
| Freshman | $3,500 | $9,500 |
| Sophmore | $4,500 | $10,500 |
| Junior | $5,500 | $12,500 |
| Senior & beyond | $5,500 | $12,500 |
| CUMULATIVE LIMIT | MAXIMUM: $23,000 | MAXIMUM: $57,500 |
Interest, Fees & Additional Information
- Interest Rates for 2025-2026: 6.39%
- Origination Fees:
1.057% (disbursed after October 1, 2024 and before October 1, 2025) - Fees are deducted from each disbursement:
For example, on a $5500 loan, $58 is subtracted resulting in a net disbursement of $5442. - Half of your loan is disbursed each semester. Funds are paid to your account as they are received.
- The Standard Repayment Plan is the basic plan with a 10 year repayment and a $50 minimum monthly payment.
The monthly payment of a $10,000 loan is approximately $115 per month.
- Federal direct loans have a 6-month grace period after a student is no longer enrolled at least half time (one grace period for the life of the loan).
Historical Interest Rates
| ACADEMIC YEAR | INTEREST RATE |
|---|---|
| 2024-25 | 6.53% |
| 2023-24 | 5.5% |
| 2022-23 | 4.99% |
| 2021-22 | 3.73% |
| 2020-21 | 2.75% |
| 2019-20 | 4.53% |
| 2018-19 | 5.05% |
| 2017-18 | 4.45% |
Loan Forgiveness
TEACHER LOAN FORGIVENESS
- $5,000 loan forgiveness
- Five years full-time teaching in an eligible elementary or secondary school
- $17,500 loan forgiveness
- Five years full-time teaching secondary mathematics or science in an eligible school or five years full-time teaching special education in an eligible school
- Check to see if your school is on the list
- Detailed information on the Student Aid website
PUBLIC SERVICE LOAN FORGIVENESS
- Remaining balance of the loan forgiven after 120 qualifying monthly payments
- Full-time employment with a non-profit organization
- Loan is in a qualifying repayment plan: income-driven payment plans, standard repayment
- Cannot include time preaching (to congregation or classroom)
- Detailed information on the Student Aid website
Graduate Students
- Graduate students are eligible for unsubsidized loans only
- The current interest rate for graduate student loans is 7.94% (2025-2026)
- Loan limits for graduate students follow the independent student levels:
| GRADE LEVEL | SUBSIDIZED MAXIMUM | TOTAL AMOUNT |
|---|---|---|
| Freshman | $3,500 | $9,500 |
| Sophomore | $4,500 | $10,500 |
| Junior | $5,500 | $12,500 |
| Senior & beyond | $5,500 | $12,500 |
| CUMULATIVE LIMIT | MAXIMUM: $23,000 | MAXIMUM: $57,500 |
Steps to Request a Direct Student Loan
First-Time Borrowers:
1. ENTRANCE COUNSELING
REQUIRED
First time borrowers must complete Direct Loan entrance counseling before receiving loan funds.
This process is done electronically on the Federal Student Aid website.
You will need your FSA ID username/password.
If you don’t remember your password, you can retrieve it by going to the FSA ID website.
2. LOAN AGREEMENT/MASTER PROMISSORY NOTE
REQUIRED
First time borrowers must complete the Loan Agreement/Master Promissory Note (MPN) before receiving loan funds.
This process is done electronically on the Federal Student Aid website.
You will need your FSA ID username/password.
If you don’t remember your password, you can retrieve it by going to the FSA ID website.
You can complete your application faster if you have the following information ready:
*Driver’s license number
*Names and complete addresses for two people you will use as personal references
One reference should be a parent or guardian (if living). References cannot have the same address.
Detailed instructions for Entrance Counseling & Loan Agreement
3. COMPLETE AND SUBMIT THE DIRECT LOAN REQUEST FORM
REQUIRED
All students who plan to borrow a Federal Direct loan must submit the Loan Request Form. You may download and print it here: Direct Loan Request Form.
4. COMPLETE THE ANNUAL STUDENT LOAN ACKNOWLEDGEMENT
RECOMMENDED
We encourage all students who plan to borrow a Federal Direct loan to complete the Annual Student Loan Acknowledgement.
This process is done electronically on the Federal Student Aid website.
You will need your FSA ID username/password.
If you don’t remember your password, you can retrieve it by going to the FSA ID website.
Repeat Borrowers:
1. COMPLETE AND SUBMIT THE DIRECT LOAN REQUEST FORM
REQUIRED
All returning students who plan to borrow a Federal Direct loan must re-submit the Loan Request Form each year. You may download and print it here: Direct Loan Request Form.
2. COMPLETE THE ANNUAL STUDENT LOAN ACKNOWLEDGEMENT
RECOMMENDED
We encourage all returning students who plan to borrow a Federal Direct loan to complete the Annual Student Loan Acknowledgement each year. You will learn important repayment terms and estimates, how much you have borrowed thus far, and what’s available for the remainder of your education.
This process is done electronically on the Federal Student Aid website.
You will need your FSA ID username/password.
If you don’t remember your password, you can retrieve it by going to the FSA ID website.
Student Alternative Loans
Private lenders provide loan funds to students that can be utilized to help finance higher education.
Alternative student loans are used to supplement the federal loan programs when federal aid, scholarships, and personal funding do not cover the cost of charged college expenses. These loans are not considered need-based loans and often require a credit worthy co-signer.
MLC Preferred Lender List
- Students can compare lenders from a list that students have used in the past
- These lenders typically have competitive rates and benefits
Additional Information
- These loans typically require a co-signer and the interest is often higher than the federal direct loans with limited repayment options
- The approved interest rate is typically based on the credit of the co-signer
- Students are able to apply for multiple loans in order to compare approved interest rates and notify our office which loan will be pursued
Private Student Loan Details
Direct Parent PLUS Loans
The Federal Government provides loan funds to parents that can be utilized to help finance higher education.
A parent can choose to borrow loan funds for a student with this federal loan. This is specifically a parent loan and cannot be transferred to the student for repayment.
Interest Rate
- Interest Rates for 2025-2026: 8.94%
Loan Limits
- The maximum amount parents can borrow is equal to the cost of attendance less any other financial aid.
Origination Fees
- 4.228% (disbursed after October 1, 2024 and before October 1, 2025)
- Loan origination fees (required to be paid to the Department of Education) are deducted from each disbursement.
- For example, on a $5000 loan, $212 is subtracted resulting in a net disbursement of $4788.
Factors to Consider
- The borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or waiting until six months after the student on whose behalf the parent borrowed ceases to be enrolled at least on a half-time basis.
- To be eligible a parent must pass a credit check.
- Half of the loan is disbursed each semester.
Direct PLUS Loan Details from Department of Education
Steps to Request a Direct Parent PLUS Loan
- Get your FSA ID Username/Password – gives you access to Federal Student Aid’s online systems and serves as your legal signature. Because this is your electronic signature, you should not give it to anyone. If you don’t remember your username or password, you can retrieve it by going to Federal Student Aid ID website. Select Manage My FSA ID and Forgot My Username or Forgot My Password.
- Apply for Parent PLUS Loan
Sign into studentaid.gov using your FSA ID. Under the “I’m a Parent” Checklist, select “Apply for Parent PLUS Loan“. Complete the application, submit for the credit approval. You will receive the results in moments.
Detailed instructions
If credit is denied, contact the financial aid office for more options. - Complete and sign the Loan Agreement/Master Promissory Note (MPN)*
First time Parent PLUS Loan Borrowers must sign the Master Promissory Note (MPN) with the Department of Education once credit is approved. Select “Parent PLUS MPN” under “Complete Aid Process” on the top right dropdown menu of the studentaid.gov website.
Detailed instructions - Complete the Annual Student Loan Acknowledgement (ASLA)
Sign into studentaid.gov using your FSA ID. Under the “I’m a Parent” Checklist, select “Complete the Annual Student Loan Acknowledgement“.
*Repeat PLUS Loan Borrowers do not have to sign another MPN provided the previous MPN:
A) is designated to the same student;
B) is signed by the same parent; and
C) does not have an endorser.
You may check if you have a valid Master Promissory Note with the Department of Education by signing into the studentaid.gov and selecting the “View Your Documents” option under the More Resources section. Filter by document type Master Promissory Note (MPN).
Parent Alternative Loans
Private lenders provide loan funds to parents that can be utilized to help finance higher education.
Alternative parent loans are used to help cover remaining college expenses after federal aid, scholarships, and personal funding are exhausted. Parents can choose from any private lender that offers educational loans. These are parent loans and cannot typically be transferred to the student for repayment. Use the FastChoice system to compare interest rates and features.
MLC Preferred Lender List
- Parents can compare lenders from a list that other families have used in the past
- These lenders typically have competitive rates and benefits
Additional Information
- The approved interest rate is typically based on the credit of the parent borrower
- Parents are able to apply for multiple loans in order to compare approved interest rates and notify our office which loan will be pursued
Department Directory
Email: mlcaid@mlc-wels.edu
Phone: 507-233-9154
Department Directory
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