Loans are borrowed funds that you must repay with interest. There are multiple loan options available for students.
Types of Loans
Direct Stafford Loans
- Schools use the information from your FAFSA to determine how much student aid you will receive. William D. Ford Federal Direct Loans are low-interest loans for students and parents of dependent students to help pay for the cost of a student's education. The lender is the U.S. Department of Education (the Department), though the entity you deal with, your loan servicer, can be a private business. Federal student loans usually offer borrowers lower interest rates and have more flexible repayment terms and options than private loans. Students and parents should always exhaust federal student loan options before considering a private loan.
- With Direct Loans, you:
- Borrow directly from the federal government and have a single contact—your loan servicer—for everything related to repayment, even if you receive Direct Loans at different schools.
- Have online access to your Direct Loan account information via your servicer's website.
- Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.
- Types of Direct Loans:
Direct Subsidized Loans- For students with financial need (as determined by federal regulations). No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods. Once the loan enters repayment, interest will accrue at a rate of 3.4%.
Direct Unsubsidized Loans- Not based on financial need (as determined by federal regulations). Interest accrues at a rate of 6.8% during all periods--even during the time a student is in school, during grace periods and deferment periods. You can pay the interest while you’re in school, during grace periods and deferment or forbearance, or you can allow it to accrue and be capitalized. This will increase the principal amount of your loan.
Other than interest, is there a charge for this loan? There is a loan fee on all Direct Subsidized and Unsubsidized Loans. The loan fee is a percentage of the amount of each loan you receive. For loans first disbursed on or after July 1, 2010, the loan origination fee is 1.0%. We will deduct the loan origination fee proportionately from each loan disbursement. The specific loan origination fee that you are charged will be reflected in a disclosure statement that we send to you.
Direct PLUS Loans
- Direct PLUS loans are unsubsidized loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is changed during all periods.
- When you apply for a Direct PLUS Loan, the Department will check your credit history. To be eligible to receive a PLUS loan, you must not have an adverse credit history. If you are determined to have an adverse credit history, you may still receive a Direct PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay the loan. If you are a parent borrowing on behalf of your dependent student, the endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan.
- In some cases, you may also be able to obtain a Direct PLUS Loan if you document to the Department’s satisfaction that there are extenuating circumstances related to your adverse credit history.
- If a Parent PLUS loan is not an option due to an adverse credit history, the student’s unsubsidized loan may be increased.
- To apply for a PLUS loan, you must complete a Direct PLUS Loan Application and the MPN. Both the PLUS application and the MPN can be completed online at www.studentloans.gov.
- Private or alternative loans can be a useful resource to help in funding education if used wisely when necessary. Unlike federal loans, these loans are not guaranteed by the government and will not be reflected on the National Student Loan Data System (NSLDS) like Title IV loans. Just like other student loans, alternative loans must be repaid!
- Remember! Free or lower-cost Title IV federal, state, or school aid may be available in place of, or in addition to, a private education loan. Make sure you investigate all your eligibility options prior to pursuing a private loan.
- Many students can meet their educational costs by a combination of scholarships, federal and state aid, earnings and family resources. It is only when all resources do not meet educational costs that a student should consider an alternative loan. A student should exhaust all of their Stafford Loan eligibility before considering alternative loans since interest rates and origination fees are usually lower for Stafford Loans.
- Private loan requirements vary according to the lender, but some of the most common requirements are:
• Ability to pass a credit check, or having a credit-worthy co-signer.
• Loan amount plus all other aid cannot exceed the cost of attendance.
• Enrolled at least half-time (some lenders require full-time enrollment).
• Making reasonable academic progress.
- Compare loan terms, interest rates, finance charges, and repayment schedules as you would with any other personal loan. It is convenient to apply online but only after you have reviewed the terms and conditions to choose the one that best meets the criteria most important to you in a private student loan.
Steps to Receive Federal Loans
First time Direct Loan borrowers must complete Entrance Counseling and a Master Promissory Note (MPN). All students who did not attend Missouri Valley College in the previous term must also complete Entrance Counseling through Missouri Valley College. Entrance Counseling must be completed regardless of whether you have completed it at another institution or previously through Valley.
- If you are a new student to MVC, you must complete entrance counseling before we can make the first disbursement of your loan. This helps you to understand your responsibilities regarding your loan. We require all new students, including transfers, to complete Entrance Counseling even if you have completed it with another institution.
- MVC offers in-person counseling or you may be able to complete this counseling online. Entrance counseling will take you approximately 30 minutes to complete.
Master Promissory Note
- When you receive a Direct Loan for the first time, you must complete a MPN. The MPN is a legal document in which you promise to repay your loan and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan.
- One MPN can be used for all Direct Loans received over a 10 year period. If you are applying for a Direct Parent PLUS Loan for the first time as the parent of a dependent student, you'll need to complete and sign a PLUS MPN for each student.
- You can complete your MPN online.