Federal Loans

In This Section

• Federal Student Aid Contact Information
• Federal Direct Subsidized/Unsubsidized Student Loan
• Loan Entrance Counseling and Master Promissory Note
• Decline Your Federal Student Loan(s)
• Direct PLUS Loan for Parents
• Direct PLUS Loan for Graduate or Professional Students
• Exit Counseling
• Repayment of Federal Loans

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Federal Student Aid Contact Information

The following items can be completed electronically at studentaid.gov

• Free Application for Federal Student Aid (FAFSA) 

• Master Promissory Note

• Loan Entrancing and Exit Counseling

• Parents can apply for a Parent PLUS Loan

• Graduate Students can apply for a Graduate PLUS Loan

For additional assistance with Federal Student Aid, use the Contact Center 

Federal Direct Subsidized/Unsubsidized Student Loan

The Free Application for Federal Student Aid (FAFSA) serves as the primary application for these loans and must be completed each year if you wish to continue to obtain federal student loan funds.  There are two components to the Direct Loan Program which are Subsidized and Unsubsidized. For these programs, the student is the borrower. 

Direct Subsidized Loans are need based student loans that are available to undergraduate students.  These include full interest subsidy during the in school period. This means that the federal government will pay your interest while you are in school and your loan principal is deferred.

Direct Unsubsidized Loans are student loans that are not based on financial need. Therefore, they are available to undergraduate and graduate students.  These loans accrue interest while in school.  

Interest Rate	Loan Type (through June 30, 2025)
6.53%	Undergraduate Subsidized & Unsubsidized
8.08%	Graduate Unsubsidized
Loan Origination Fee	Loan Type (through September 30, 2024)
1.057%	Subsidized and Unsubsidized

View Previous Years' Interest Rates Here
The loan origination fee is deducted proportionately from each loan disbursement the schools receives.  This means the money the school receives  will be less than the amount borrowed. Borrowers are responsible for repaying the entire amount borrowed and not just the amount received.

The exact amount of loan eligibility is determined by the following formula: educational costs minus financial aid, minus Student Aid Index (previously called Expected Family Contribution- EFC) as calculated by the U.S. Dept. of Ed.

Annual Limits for Subsidized and Unsubsidized Loans

Grade Level	Credits Required	Subsidized	Unsubsidized	Extended Unsubsidized (1)
First Year Undergraduate	0-29	$3500	$2000	$4000
Second Year Undergraduate	30-59	$4500	$2000	$4000
Third Year Undergraduate	60 +	$5500	$2000	$5000
Fourth Year Undergraduate	60+	$5500	$2000	$5000
Fifth Year Undergraduate	60+	$5500	$2000	$5000
Graduate or Professional			$20,500

(1) Direct Extended Unsubsidized is available only to independent students and dependent students whose parent(s) have been denied a Direct PLUS loan.

Aggregate Limits for Subsidized and Unsubsidized Loans

Dependent Undergraduate Student	Independent Undergraduate or Dependent Undergraduate with PLUS Denial	Graduate Student
$31,000- no more than $23,000 of this amount may be in subsidized loans.	$57,500- No more than $23,000 of this amount may be in subsidized loans.	$138,500 -No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study

 

Click here for detailed information on Federal Direct Loans 

Loan Entrance Counseling and Master Promissory Note

All students borrowing federal loans must complete Loan Entrance Counseling and electronically sign a Master Promissory Note (MPN).  

Entrance Counseling ensures you understand the terms and conditions of your loan and your rights and responsibilities. You'll learn what a loan is, how interest works, your options for repayment, and how to avoid delinquency and default.

Click Here to View the Direct Loan Entrance Counseling Guide

The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s). 

Decline Your Federal Student Loan(s)

Students who file a FAFSA and meet all eligibility requirements are considered for Direct Loan(s). These loans are included on your financial aid offer letter that is sent from the Student Financial Services office. Eligibility is determined each academic year.

Students are not required to accept the federal student loan(s) offered to them if they do not need the funding. To decline all or part of your federal direct student loans, students can send an email from their Misericordia student email to their financial aid counselor or finaid@misericordia.edu with the subject "Decline Student Loans."  Students need to send an email each academic year that they would like to decline their loan(s).

Direct PLUS Loan for Parents

This program is available to credit-worthy parents of dependent undergraduates to borrow up to the total cost of attendance for the period of enrollment after other financial assistance. A loan application and credit check must be completed each academic year.

Note:  Grandparents (unless they have legally adopted the dependent student) and legal guardians are not eligible to receive parent PLUS loans, even if they have had primary responsibility for raising the student.

Interest Rate

9.08% - through June 30, 2025

Loan Origination Fee

4.228% - through September 30, 2024

The loan origination fee is deducted proportionately from each loan disbursement the schools receives.  This means the money the school receives  will be less than the amount borrowed. Borrowers are responsible for repaying the entire amount borrowed and not just the amount received.

We recommend that the PLUS application be submitted no earlier than May 1st as the credit check expires after 90 days. 

Parents must complete a PLUS Master Promissory Note (MPN) and those who have adverse credit history and have obtained an endorser or appealed the credit decision must also complete PLUS Counseling in addition to the MPN. 

If a parent is denied a Direct PLUS Loan, the student is eligible to borrow additional Direct Unsubsidized Loan funds.

Learn more about Parent PLUS Loans Here

Direct PLUS Loan for Graduate or Professional Students

This program is available to credit-worthy graduate or professional students to borrow up to the cost of attendance for the period of enrollment after other financial assistance.  A loan application and credit check must be completed each academic year. We strongly encourage students to consider this loan program when looking for additional funding beyond the Direct Loan program. 

Interest Rate

9.08% - through June 30, 2025

Loan Origination Fee

4.228% - through September 30, 2024

The loan fee is deducted proportionately from each loan disbursement received.  This means the money the school receives will be less than the amount you borrow. Parents are responsible for repaying the entire amount borrowed and not just the amount received. 

Learn more about Graduate PLUS Loans Here

Exit CounselingAll Federal Loan borrowers must complete exit counseling when the student leaves school (due to withdrawal or graduation) or drops below half-time enrollment. The purpose of exit counseling is to ensure borrowers understand their student loan obligations and are prepared for repayment. Exit Counseling will provide borrowers with repayment options that best suit their future plans and goals.

Click Here to View the Direct Loan Exit Counseling Guide

Repayment of Federal LoansThe repayment of your principal balance can be deferred until the student completes their program of study or drop to less than half-time status.

For most federal student loan types, after you graduate, leave school, or drop below half-time enrollment, you have a six-month grace period before you must begin making payments. This grace period gives you time to get financially settled and to select your repayment plan. Not all federal student loans have a grace period. Note that for most loans, interest accrues during your grace period. The interest that accrues during your grace period will be added to the outstanding balance of your loan, but it will not be capitalized. You can always pay the unpaid accrued interest before entering repayment.

Grace Periods of Federal Loans

• Direct Subsidized Loans and Direct Unsubsidized Loans have a six-month grace period before payments are due.

• PLUS loans do not have a grace period; but if you received a PLUS loan as a graduate or professional student, you’ll automatically get a six-month deferment after you graduate, leave school, or drop below half-time enrollment. No payments are required during this six-month deferment period. If you’re a parent borrower who took out a PLUS loan to pay for your child’s education, you can request a six-month deferment after your child graduates, leaves school, or drops below half-time enrollment. 

Federal Student Loan Repayment Information 

Default of your Federal Loans

Becoming delinquent or defaulting on your student loan responsibility may result in serious consequences. In some cases, the following steps may be taken to recover outstanding balances due:

• The entire unpaid balance of your loan and any interest you owe becomes immediately due.

• You can no longer receive deferment or forbearance, and you lose eligibility for other benefits, such as the ability to choose a repayment plan.

• You lose eligibility for additional federal student aid.

• The default is reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card.

• It may take years to reestablish a good credit record.

• You may not be able to purchase or sell assets such as real estate.

• Your tax refunds and federal benefit payments may be withheld and applied toward repayment of your defaulted loan.

• Your employer may be required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan.

• Your loan holder can take you to court.

• You may be charged court costs, collection fees, attorney’s fees, and other costs associated with the collection process.

If your student loan goes into default, help is available and there are options available.

Learn more about the options available to you to get out of default