Stafford Loan Information

Stafford Loans:  Your award letter shows your Stafford loan eligibility. Following is information about the Stafford loan program.

• Master Promissory Note (MPN): Students who obtain a Stafford loan must sign an MPN, which will be valid for any Stafford loan borrowed during your enrollment at MLC.
• Subsidized Federal Stafford Loans are need-based loans. Eligibility is determined by results of the FAFSA. The federal government pays interest while you are in school and during the six-month grace period after the in-school period.  During repayment, the interest rate for a 2008-09 loan will be 6.0%.  Scholarships and grants received can result in a change in loan eligiblity shown on your award letter from subsidized to unsubsidized.
• Unsubsidized Federal Stafford Loans are non need-based loans. The FAFSA must be completed. The student is responsible for interest from the date of disbursement and throughout the life of the entire loan.
• The interest rate is 6.8%
• Loan origination fees and/or default fees required to be paid to the Department of Education may be deducted from each disbursement.  Lenders may pay some or all of these fees for students.  MLC's electronic preferred lender list has current information.
• Half of your loan is disbursed each semester. Funds are paid to your account as they are received from your lender.
• The standard maximum repayment term is 10 years with a $50 minimum monthly payment. Monthly payment on a $10,000 loan is approximately $115 per month.
• Loan limits—The Federal 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:
• 1^st year $3,500
• 2^nd year $4,500
• 3^rd to 5^th years $5,500

For independent students:

• 1^st year $7,500 with the Subsidized Stafford not to exceed $3,500
• 2^nd year $8,500 with the Subsidized Stafford not to exceed $4,500
• 3^rd to 5^th years $10,500 with the Subsidized Stafford not to exceed $5,500.

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