Loan Overview for Students & Parents
Contains an explanation of loan options and links to apply
REMEMBER: Loans must be repaid. Even though interest may be deferred while you are in college, try to put strict limits on your borrowing. Loans are an option that should be used only if other sources of funds (such as savings and work) are not sufficient. You may delay borrowing until such time that you need a loan to keep your billing account current.
PRE-SEMINARY STUDENTS: Repayment of loans will begin already during seminary years and deferments may be difficult to obtain.
DEADLINES: If you want loan amounts to be included as a credit on your MLC billing statement, the loan application process including the signing of a promissory note must be completed before June 15. This deadline refers only to the loan amount being credited on your first billing statement. Loans may be taken out any time during the school year.
Here are our recommended loan options:
Always the student’s best loan choice, consider the Direct Stafford loan before all other student loan options
Your award letter shows your Stafford loan eligibility. Following is information about the Stafford loan program.
Master Promissory Note (MPN): First time Stafford loan borrowers must sign an MPN, which will be valid for continuing years for which you add to your Stafford loan during your enrollment at MLC.
Subsidized Stafford Loans are need-based loans. Eligibility is determined by results of the FAFSA. The federal government pays the interest while you are in school and during the six month grace period after you leave school. During repayment, the interest rate for a loan in 2011-12 will be 3.4%. Scholarships and grants received can result in a change in the loan eligibility amount shown on your award letter from subsidized to unsubsidized.
Unsubsidized Stafford Loans are non need-based loans. The FAFSA must be completed. The student is responsible for interest at the rate of 6.8% from the date of disbursement and throughout the life of the entire loan.
o Loan origination fees and/or default fees required to be paid to the Department of Education may be deducted from each disbursement.
o Half of your loan is disbursed each semester. Funds are paid to your account as they are received.
o The standard maximum repayment term is 10 years with a $50 minimum monthly payment. The monthly payment of a $10,000 loan is approximately $115 per month.
o The Stafford subsidized and unsubsidized loan programs limit the amount a student may borrow each year based on the student’s grade classification and dependent/independent status. In combination of subsidized and unsubsidized loans, the annual loan limits for dependent students are:
§ 1st year $5,500 with subsidized not to exceed $3500
§ 2nd year $6,500 with subsidized not to exceed $4500
§ 3rd to 5th years $7,500 with subsidized not to exceed $5500
o The annual loan limits for independent students are:
§ 1st year $9,500 with subsidized not to exceed $3,500
§ 2nd year $10,500 with subsidized not to exceed $4,500
§ 3rd to 5th years $12,500 with subsidized not to exceed $5,500
Requesting Your Stafford Loan IS A FOUR STEP PROCESS. Don’t miss a step or your loan will not be processed!
Details regarding the Parent PLUS Loan and how to apply
The Direct PLUS loan program is an educational loan offered by the Department of Education to the parent/step-parent or adoptive parent of a dependent student. It was created to assist in obtaining additional educational loan funding. PLUS loans are not included in the financial aid award letter, but are available to parents up to the cost of attendance minus other financial aid.
Factors to consider with a PLUS loan are:
The interest rate is 7.9%
A net fee of 2.5%, paid to the government to help reduce the cost of the PLUS program, is deducted from the loan.
The borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.
To be eligible, the borrower may not be in default on any federal education loans, be a U.S. citizen or eligible non-citizen and be able to pass a credit check.
Half of the loan is disbursed each semester. Funds are paid to the student’s account as they are received.
The PLUS LOAN APPLICATION/CREDIT AUTHORIZATION FORM gives the school the required information needed to process a credit check for the borrower. MLC will electronically submit the PLUS Loan Application information to the Direct Loan Servicing Center. The credit approval (or denial*) will be made by the US Department of Education
Martin Luther College maintains a preferred lender list to assist students in locating additional loan funds after Stafford Direct Loan eligibility is exhausted. Great Lakes Education Assistance Corporation’s FASTChoice software is used to provide students with information to help make a sound decision about which lender to select.
SELF Loan -- Sponsored by State of Minnesota (all MLC students eligible
Wells Fargo -- Wells Fargo Collegiate Loan Program
These lenders were selected for their variety of loan options with competitive interest rates. MLC has worked with these lenders in the past, and previous borrowers have had positive experiences working with them.
MLC suggests only those lenders who provide our students with exceptional customer service, incentives, timely processing and electronic funds transfer capabilities when possible.
MLC reviews annually the lenders presented for consideration to ensure the benefits that the lenders offer continue to adhere to MLC’s criteria. Lenders who no longer adhere to these criteria are removed, and new loan options are added. No fewer than two lenders will be presented at all times.
Students are free to select any lender they choose, including those not listed here. MLC will not delay application processing unnecessarily if an unlisted lender is selected.
How to apply--Visit the FASTChoice website to view the specific options from the above list of loan vendors and proceed to apply.