Before you Borrow: Choosing to borrow a federal loan is a decision to consider seriously before entering into a loan agreement. Loans can be a wonderful way to make attending college possible but many students enter into loan agreements without fully understanding the consequences of their decisions. Loans must be repaid when you're no longer enrolled in school. Student loans, unlike grants and scholarships, are borrowed money that eventually MUST be repaid, with interest. A Loan Payment Calculator is available on to gauge what your monthly payments may be at various borrowing levels.

Students are strongly advised to borrow through the Federal Direct Subsidized and Unsubsidized Loan program first. If additional loan funds are still needed, we suggest the Federal Direct PLUS (for the parents of dependent students) and the Federal Direct Graduate PLUS (for graduate students). We advise families to exhaust all federal loan options before using private education loans.

Federal Direct Stafford Loans

Federal Direct Stafford Loan Program – Student is the Borrower

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

The current interest rate for an undergraduate Subsidized & Unsubsidized Loan is: 4.53%.

A 1.062% federal origination fee is applied to all subsidized and unsubsidized loan On or after 10/1/18 and before 10/1/19. 

A 1.059% federal origination fee is applied to all subsidized and unsubsidized loan On or after 10/1/19 and before 10/1/20. 

Direct Subsidized Loans are need based student loans that 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 need. Therefore, quarterly interest payments are required or the interest will be capitalized upon repayment. This means that your unpaid interest is added to the principal.

Repayment of both Direct Subsidized and Unsubsidized loans begins six months after student ceases enrollment or enrolls in fewer than 6 credits. Repayment may extend for up to ten years.

The exact amount of loan eligibility is determined by the following formula: educational costs minus financial aid, minus expected family contribution as calculated by the U.S. Dept. of Ed.

Grade Level

Credit Requirement

Direct Subsidized Limit

Direct Unsubsidized Limit

Direct Extended Unsubsidized Limit (1)

First Year





Second Year





Third Year

60 +




Fourth Year





Fifth Year









Annual amount may be limited based on the Cost of Attendance and other financial aid received.

(1) Direct Extended Unsubsidized is available only to independent students and dependent students whose parent(s) have been denied a Direct PLUS loan. Detailed information for the Federal Direct Loan can be found at or call 1-800-557-7394 for assistance.

Federal Direct Parent Plus Loan

Federal Direct Parent Plus Loan- Parent is the Borrower

This program allows creditworthy parents of full or half time dependent undergraduates to borrow up to the total University costs minus other financial aid. The interest on the Direct PLUS Loan is fixed at 7.08%. Repayment normally begins within sixty days after the second disbursement but can be deferred until after the student graduates. There is a ten year repayment period. If a parent is denied a Direct PLUS Loan, the student is eligible to borrow additional Direct Unsubsidized Loan funds. When determining the amount to borrow, consider the origination fee. The total origination fee is 4.236% which is deducted from the loan proceeds for loans on of after 10/1/19 and before 10/1/20. A 4.248% federal origination fee is applied to all Plus loans or after 10/1/18 and before 10/1/19. 

We recommend that the PLUS application be submitted no earlier than May 1st as the credit check expires after 90 days. Parents can apply for the PLUS loan and submit the master promissory note at (1-800-557-7394)

Federal Direct Graduate Plus Loan

The Federal Direct Graduate PLUS Loan is available to credit-worthy Graduate students who have exhausted their Federal Direct Stafford Loan eligibility in an academic year. Graduate students are required to first utilize the Direct Stafford Loan Program prior to borrowing under the Direct PLUS Loan Program. The U.S. Department of Education will conduct the mandatory credit check. Direct Graduate PLUS borrowers may borrow up to the cost of attendance for the period of enrollment, minus other estimated financial assistance received for the period.

Complete Loan Entrance Counseling and Master Promissory Note

All students borrowing direct loan money must complete Loan Entrance Counseling and electronically sign a Master Promissory Note (MPN).

The Loan Counseling Process is mandated by the federal government to ensure that students understand their rights/obligations as a borrower.

These two processes must be completed online at

Prior to ending enrollment, all students must complete exit loan counseling at

Alternative Loans

Alternative (Private) Loans

Students and their families can borrow additional loan funds to help meet their college costs when other financing options are exhausted. These loan programs are provided by commercial lenders and are not supported by state or federal financial aid funds. Maximum loan amounts, borrower qualification, repayment schedules and interest rates vary by lender. Many will require a co-signer. Some alternative loans are not subject to federal financial aid regulations, such as having a FAFSA on file, making satisfactory academic progress, completing federal verification, and they do not have limits on the amount borrowed based on the number of credits earned. However, they are based on the credit-worthiness of the applicant and/or the cosigner. Please note it is the responsibility of the borrower to ensure that the Student Financial Services Office receives any certification requests from lenders.

All loans are transferred electronically in to the student account no earlier than 10 days prior to the start of each semester.

Click to view Preferred Alternative Loan Lenders


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Misericordia University hosted an interactive virtual faculty panel on Thursday April 30 to discuss COVID-19 and the wide-ranging impact this virus is having on our society.
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