Loans for Students and Parents
Loans for Students
Loans for Parents
Federal Direct Stafford Loan
How Do I Apply for a Federal Stafford Loan?
Federal Stafford Loan Information for all Incoming, New, and Transfer students:
- To obtain a Federal Direct Subsidized Stafford Loan or a Federal Direct Unsubsidized Stafford Loan: All students who file a FAFSA will be offered a Federal Direct Stafford Loan on their financial aid award notice, which can be accepted or declined. All accepted loans will be originated/created with the Department of Education in mid-July. If you decline the Stafford Loan, and later in the semester decide you need Stafford Loans, please contact the Financial Aid Office.
- After the Stafford Loan is processed in mid-July, you should receive a Loan Disclosure Statement from the William D. Ford Federal Direct Loan Program detailing the terms and conditions of your Federal Stafford Loan.
- After accepting your loan, you need to electronically sign a Master Promissory Note (MPN).
- You will also need to complete Loan Entrance Counseling.
- For the interest rate and loan fee on your Subsidized and Unsubsidized Federal Stafford Loans, please visit the Federal Student Aid website.
Example: First-year students receive a total gross amount of $5500 Federal Stafford Loan in two equal disbursements (half will disburse for the fall and the other half will disburse for the spring semester).
- PUBLIC LAW 112-74 amended HEA section 428(a)(3)(A)(i)(I): For ALL NEW DIRECT STAFFORD LOANS with a first disbursement on or after July 1, 2012 AND before July 1, 2014, the interest subsidy on Direct Subsidized loans during the six month grace period is ELIMINATED for ALL students no longer enrolled on at least a half-time basis. This means that Direct Subsidized Stafford loans will accrue interest during the grace period (just like Unsubsidized Stafford loans). If interest is unpaid, it will be capitalized. THIS AFFECTS ALL GRADUATING STUDENTS AND THOSE WHO ARE LESS THAN HALF-TIME ENROLLMENT.
Federal Stafford Loan Information for all Continuing/Current students:
- All students who file a FAFSA will be offered a Federal Direct Stafford Loan on their financial aid award notice, which can be accepted or declined. All accepted loans will be originated/created with the Department of Education. If you decline the Stafford Loan, and later in the semester decide you need Stafford Loans, please contact the Financial Aid Office.
- Shortly after the Stafford Loan is processed, you should receive a Loan Disclosure Statement from the William D. Ford Federal Direct Loan Program detailing the terms and conditions of your Federal Stafford Loan.
- If you had a Federal Direct Stafford Loan with the William D. Ford Federal Direct Loan Program in the past, you do not need to sign a new Master Promissory Note (MPN); an MPN is valid for 10 years. If you have not had a William D. Ford Federal Direct Stafford Loan in the past, or you are unsure about having a William D. Ford Federal Direct Stafford Loan in the past, then you need to complete the following two requirements on the Federal Student Aid website.
You can keep track of all your Federal student loans at the National Student Loan Data System for Students.
- Log in to the Federal Student Aid website using your FAFSA PIN # and complete a Stafford Loan MPN. If you forgot your PIN #, you can request a duplicate PIN at www.pin.ed.gov.
- Complete Loan Entrance Counseling (only for new borrowers) on the Federal Student Aid website.
Note: Federal Stafford Loan eligibility – Sophomores are eligible for a total of $6500. Juniors are eligible for a total of $7500, and Seniors are eligible for a total of $7500 per academic year. Loans are disbursed in two equal disbursements, half for the fall semester and the other half for the spring semester.
Lycoming College is notified electronically when you complete your Loan Entrance Counseling as well as signed your MPN, so you do not need to notify the Financial Aid office.
What are the Terms and Conditions of a Federal Stafford Loan?
The terms and conditions of your Federal Stafford Loan will be reviewed in the Loan Entrance Counseling on the Federal Student Aid website.
Other Important Information regarding loans:
- An academic year at Lycoming College is composed of a minimum of 30 weeks of instructional time during which a full-time student is expected to complete at least 24 credit hours. These standards are used in determining eligibility for federal student aid and loan proration.
- Full-time enrollment status is considered 12 credit hours. These standards are used in determining eligibility for federal student aid and loan proration.
- You must be attending Lycoming College at least half-time to be eligible for a Stafford Loan. Half-time enrollment is defined as 6 - 8 credit hours. Three-quarter time enrollment is defined as 9-11 credit hours.
- Eligibility for the subsidized loan may change if you receive additional non-college aid that was not known by the College at the time the award notice was printed or if corrections are made to the FAFSA which change the EFC.
- The MPN can be submitted as soon as possible prior to the new school year, but it should be submitted no later than June 15th if you wish to have your loan appear on your bill as estimated financial aid. The MPN is a legal document. By signing the Stafford MPN, you promise to repay your current and future Stafford Loans. This Note is valid for 10 years and does NOT require you to complete another MPN for subsequent borrowing, unless you elect to use a different lender than what was submitted on the original MPN, or due to a request made by the lender or school.
- Repayment is made to a loan servicer that is contracted by the U.S. Department of Education on a monthly basis, and the maximum repayment period is ten years.
Federal Perkins Loan
A need-based, low-interest federal loan awarded to students who demonstrate exceptional financial need. Priority is given to students who meet the May 1st priority deadline. Lycoming College is the lender, and the loan is made with government funds. You must repay this loan. Awards vary, but cannot exceed $4,000 per year. Funding is limited; therefore, not all students meeting the criteria will receive Federal Perkins Loan funds.
No interest accrues while in school, and repayment of the loan is deferred until nine (9) months after you graduate or cease to be enrolled on at least a half-time basis.
When repayment begins, the interest rate will be five (5) percent. Billing is handled by an outside agency; however, payments are made directly to Lycoming College on a monthly basis. The maximum repayment period is ten years.
For more information regarding the Federal Perkins Loan program please refer to the FSA for Students web site.
Apply online for a Perkins Loan.
Federal Direct PLUS Loan
A Federal Direct Parent Loan for Undergraduate Students (PLUS) is a low-cost education loan for parents. The PLUS Loan offers flexible repayment terms and a fixed interest rate.
IMPORTANT DATE: Apply starting July 1.
Advantages of the PLUS Loan include:
- Qualifications for a PLUS are based solely on good credit, and there are no debt-to-income ratio guidelines or employment verification requirements
- Plenty of borrowing power - up to the full cost of attendance minus financial aid.
- Flexible repayment terms with up to 10 years to repay the loan, which includes interest-only payments or deferring principal and interest payments for up to four years
- Interest may be tax deductible
- Payments as low as $50 a month
- No penalty for early repayment or payoff
- If the PLUS loan is denied, freshmen and sophomores are eligible for an additional $4000 from the Federal Direct Unsubsidized Stafford Loan, while juniors and seniors are eligible for an additional $5000
- Provides a built-in insurance for death and disability that applies to both the borrower and the student at no additional cost
- Some parents may opt to do a combination of the TuitionPay Payment Plan and Parent PLUS Loan
You can start the application process with the PLUS Loan request form.
Who is Eligible for a Parent PLUS Loan?
You must be the student's biological or adoptive parent or the student's stepparent. Both parents may get a PLUS loan as long as the total aid package does not exceed the student's cost of attendance. A stepparent is eligible to borrow a PLUS loan if their income and assets would be taken into account when calculating the dependent student's EFC. A legal guardian is not considered a parent for Federal Student Aid purposes.
How Do I Apply for a Parent PLUS Loan?
All eligible parents of dependent undergraduate Incoming, and Transfer students interested in applying for a Federal Parent PLUS loan will need to follow these instructions:
If your parent would like to obtain a Federal Direct Parent PLUS Loan, a FAFSA is required to be filed by the student. Parent PLUS Loans will be originated/created with the U.S. Department of Education beginning in mid-July. Since the credit check is performed when you apply for a Parent PLUS Loan, and it is only good for 90 days, it is best to wait until mid-July before submitting your application.
The PLUS Loan application process is two separate steps.
- One parent should complete the Parent PLUS application on the Federal Student Aid website, using your parent FAFSA PIN # to log in.
- After applying online, the parent (borrower) needs to sign a Master Promissory Note (MPN) on the Federal Student Aid website.
- A credit check is done before you complete the entire PLUS loan application. If approved, you can proceed by completing the loan application and signing an MPN. If denied, you have the option to submit endorser information (a co-signer for the parent loan; if not your student may be eligible for additional Federal Unsubsidized Stafford Loan.)
- During the online application process on the Federal Student Aid website, the borrower may request an "in-school deferment" option that will be in effect while the student is enrolled full-time. Interest will accumulate on the loan during this deferment period. You can also contact the Direct Loan Servicer at 1-800-848-0979 to request a PLUS “in-school deferment”. Otherwise, the PLUS Loan payments begin 60 days after the loan is fully disbursed into your student’s account.
- Shortly after the PLUS Loan is processed, the borrower should receive a Loan Disclosure Statement from the William D. Ford Federal Direct Loan Program detailing the terms and conditions of the Federal Parent PLUS Loan.
For the interest rate and loan fee on your Federal PLUS Loan, please visit the Federal Student Aid website.
The Parent PLUS loan you completed on the Federal Student Aid website will be sent to Lycoming College electronically.
If you have any problems with the Federal Student Aid website, please contact Direct Loans at 1.800.848.0979.
What are the Terms and Conditions of a Federal PLUS Loan?
Terms and conditions of your Federal PLUS Loan are contained in the electronic MPN.
For more information regarding Federal Direct Loans, you can also visit the Direct Loan website.