Financial Aid Loans

Federal educational loans have significant advantages over consumer loans including low interest rates and favorable repayment terms. To be considered, you need to complete the Free Application for Federal Student Aid (FAFSA) as well as any other documentation that may be requested by our office.

North Central College participates in Direct Lending through the U.S. Dept. of Education for processing both Federal Stafford and PLUS loans. With this program, the federal government provides funding and collects payment on the loans when they go into repayment.

Stafford Loans

Federal Stafford loans are awarded based on financial need and offered through the federal government's program, Direct Lending.

Subsidized — Awarded to students with financial need. You’re not charged interest while registered as a student (at least half time). The federal government subsidizes or pays the interest during this period.
Unsubsidized — Awarded to students without financial need (you still must file for financial aid). You’re charged interest from the time the loan is disbursed until it’s paid in full. You may choose to pay the interest while in school, or if you don’t, the interest will accumulate and be added to the loan principal balance.

Dependent Students*	Base amount (subsidized if FAFSA shows need)	Additional unsubsidized amount
First year (less than 27 credits completed)	$3,500	$2,000
Second year (27-53 credits completed)	$4,500	$2,000
Third and fourth year (54+ credits completed)	$5,500	$2,000
Teacher Certification students	$5,500	$2,000

Independent Students*	Base amount (subsidized if FAFSA shows need)	Additional unsubsidized amount
First year (less than 27 credits completed	$3,500	$6,000
Second year (27 - 53 credits completed)	$4,500	$6,000
Third and Fourth year (54+ credits completed)	$5,500	$7,000
Teacher Certification students	$5,500	$7,000

Graduate Students*	Base amount (unsubsidized after (7/1/12)	Additional unsubsidized amount
	$8,500 (6.8% fixed interest rate)	$12,000 (6.8% fixed interest rate)

*Federal guidelines determine the combined maximum loan amounts per academic year for both types of Stafford loans.

Important facts:

Loan eligibility will be determined as part of your financial aid package.
Beginning July 1, 2012, the interest rate will be fixed at 6.8% for subsidized, 6.8% for unsubsidized loans.
At the time of disbursement, the U.S. Dept. of Education will deduct an origination fee of up to 1%.
Repayment begins six months after you’re no longer enrolled at least half time (because for graduation, withdrawal or less than half time enrollment).

Combined cumulative borrowing limits

Dependent undergraduates	$31,000 (up to $23,000 may be subsidized)
Self-supporting undergraduate	$57,500 (up to $23,000 may be subsidized)
Graduate students	$138,500 (including undergraduate borrowing - up to $65,500 may be subsidized)

Disbursement of funds
We participate in electronic funds transfer (EFT) and will deposit your loan proceeds directly to your student account.

Loan counseling
Federal regulations require all borrowers to complete a Master Promissory Note (MPN) before disbursing funds to your account. The MPN is your legal obligation to repay all Stafford loans you borrow within a 10-year period.

Federal regulations require all schools to provide entrance counseling to first-time borrowers. This session provides you with information about the loan program, your rights and responsibilities as a borrower, and it must be completed prior to the disbursement of any loan funds.
If you receive a loan, federal law requires you to complete exit counseling. This session informs you about the repayment process.

Perkins Loans
Federal Perkins loans are awarded based on financial need and offer low interest rates.

Student Type	Annual maximum amount you may borrow	Cumulative borrowing limit
Undergraduate and continuing education students	$4,000*	$20,000
Graduate students	$6,000	$40,000 (includes total undergraduate and graduate borrowing)

*Federal guidelines determine the maximum loan amount per academic year for Perkins loans

Important facts

Eligibility is determined as part of your financial aid package.
Interest rate is 5% and begins accumulating after you start repaying the loan.
Repayment begins nine months after you’re no longer enrolled at least half time.
Repaid within 10 years in equal quarterly installments. The minimum payment is $120.
You may be eligible to defer repayment or cancel the loan entirely. For further information, contact our office.

Federal Parent Loans to Undergraduate Students (PLUS)

Parent borrower goes through a credit check.
Loan amount is limited to tuition, fees, room, board and other approved costs, less any additional financial aid.
Repayment begins within 60 days after the final disbursement of the year.
Interest rate charged is variable by year and capped at 9%. Current rate is 7.9% for the period July 1, 2012 through June 30, 2013.
Direct Loans will retain 4% of the gross loan amount requested as an origination fee.
Request an application through our office.

Our office needs to be notified when a parent is borrowing a PLUS loan. Additional forms needed can be found on the Financial Aid Forms page.