Loans are a major source of aid for students. Student loans must be repaid after the student graduates, withdraws from school, or drops below six credits. Interest rates, grace periods, and repayment requirements vary depending on the type of loan.
Federal Perkins Loan
A Federal Perkins Loan is a low-interest (5%) loan for both undergraduate and graduate students with financial need. The school is the lender. A typical award at MSU Billings is $2,000/year. Repayment of the Perkins Loan is deferred while the borrower is enrolled at least half-time in an approved institution of higher education. Interest begins to accrue and repayment starts nine months after the borrower ceases to be enrolled at least half-time. Repayment may be extended over a maximum of 10 years. Under certain circumstances the Perkins Loan can be forgiven. For information regarding loan forgiveness and deferment, please contact the Office of Financial Aid and Scholarships.
Federal Direct Loans are low-interest loans funded by the Department of Education to undergraduate and graduate students attending school at least half-time. Students must complete the Free Application for Federal Student Aid (FAFSA) in order for the University to determine loan eligibility.
Federal Direct Loans can be subsidized and unsubsidized. A student may receive both during an enrollment period. A subsidized loan is awarded on the basis of the student having unmet financial need. The student will not be charged any interest until payment begins. Unsubsidized loans are not awarded on the basis of financial need. Interest accrues to the student from the time the loan is first disbursed. If the accrued interest is not paid while the student is in school, the interest owing at the time the student goes into repayment will become part of the principal and increase the amount of the original loan.
Repayment of the Federal Direct Loan begins six months after the student graduates, leaves school, or drops below half-time. Students have up to 10 years to repay. Deferment and forbearance options are available to students under certain circumstances. The Office of Financial Aid & Scholarships is your resource for more information regarding Direct Loans.
Federal Direct Loan Annual Loan Limits
|Third, fourth, fifth year||$7,500-$12,500|
Aggregate Loan Limits
|Grad + undergrad||$65,500-$138,500|
Federal PLUS Loans are unsubsidized loans made to parents of dependent students and graduate students. The maximum PLUS Loan amount that a parent or graduate student can borrow is the student’s cost of attendance minus other financial aid received. Interest is 8.5%. Repayment of a PLUS loan for graduate students begins on the date of the last disbursement. Parent PLUS loan borrowers whose funds were first disbursed on or after July 1, 2008, have the option of delaying their repayment on the PLUS loan to either 60 days after the loan is fully disbursed or six months after the dependent student is not enrolled at least half-time. During this time, interest may be paid by the parent or capitalized. MSU Billings does require students to complete a FAFSA before a PLUS loan will be awarded.
Alternative educational loans are unsubsidized private loans available from lenders. More information can be obtained in the Office of Financial Aid and Scholarships or through participating lenders.
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