Loans

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. For more loan information visit: www.studentloans.gov or www.studentaid.ed.gov/types/loans

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 in at least six credits at an approved institution of higher education.  Interest begins to accrue and repayment starts nine months after the borrower ceases to be enrolled in 6 or more credits.  Repayment may be extended over a maximum of 10 years. For information regarding loan forgiveness and deferment, please contact the Business office.

Federal Direct Loan Program

Federal Direct Loans are low-interest loans funded by the Department of Education to undergraduate and graduate students attending school at least half-time (6 or more credits).  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 repayment begins.  Unsubsidized loans are not awarded on the basis of financial need.  Interest accrues 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.

 

Typical repayment of the Federal Direct Loan begins six months after the student graduates, leaves school, or drops below half-time enrollment.  The standard repayment term is 10 years.  Deferment and forbearance options are available to students under certain circumstances.  You can contact the MSUB Financial Education Success Specialist at bemoneysmart@msubillings.edu or you can contact your loan servicer directly for more information on repayment options. If you are unsure who your loan servicer is you can log into www.nslds.ed.gov and select the individual loans to find the servicer’s contact information.

 

Federal Direct Loan Annual Loan Limits:  Dependent Student Independent Student
First year  $5,500    $9,500
Second year    $6,500   $10,500
Third, fourth, fifth year $7,500  $12,500
Graduate $8,500 $20,500
 
Aggregate Loan Limits:      
Undergraduate      $31,000 $57,500
Graduate + Undergraduate   $138,500

 

Subsidized Loan Limit

For first time borrowers whose first Direct Loan(s) was disbursed after July 1st, 2013 there is an additional limitation on the amount of subsidized loans you can receive. For more information please contact the Office of Financial Aid and Scholarships.

 

Federal Graduate PLUS loan

Federal Graduate PLUS Loans are unsubsidized loans made to graduate students.  The maximum PLUS Loan amount that a graduate student can borrow is the student’s cost of attendance minus other financial aid received. Interest rates for these loans vary each aid year, please contact the Office of Financial Aid and Scholarships to get the current year’s rate. Repayment of a PLUS loan for graduate students begins on the date of the last disbursement. 

 

Federal Parent PLUS loan

The Federal Direct Parent PLUS loan is available to credit-worthy parents of dependent, undergraduate students who are enrolled (or plan to enroll) at least half-time.  A parent borrower can request to borrow up to the student's total cost of attendance minus all other financial aid. If the parent does not successfully pass the credit check they may choose to appeal or pursue an endorser for the loan, both of these processes are done by contacting www.studentloans.gov. Dependent students whose parents have applied for but were denied the PLUS loan are eligible to receive additional Stafford loan funds.

 

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.


More information about the Federal Direct Parent PLUS Loan program can be found online.

 

To apply for a Federal Direct Parent PLUS Loan for your Montana State University Billings (MSUB) student, the following steps need to be taken:

  1. The student must be admitted as a degree-seeking student at MSUB

  2. The student must complete a Free Application for Federal Student Aid (FAFSA) and be eligible to receive Federal student aid.

  3. The parent borrower must complete a Parent PLUS Loan Application each year and return it to the Office of Financial Aid

  4. A Federal Direct Parent PLUS Loan Master Promissory Note (MPN) must be on file with the Department of Education.  To complete a Direct PLUS MPN, go online and sign in using your Federal PIN, select "Complete MPN" and "Parent PLUS."

How to Apply for Federal Loans?

  1. The student must be admitted as a degree-seeking student at MSUB
  2. The Free Application for Federal Student Aid (FAFSA) is a free application that students submit to apply for:

    • Federal Direct Subsidized and Unsubsidized student loans
    • Federal Perkins Loan
    • Parent and Graduate PLUS loans
  3. Submit all requested documents to the Office of Financial Aid & Scholarships

  4. After receiving your Award Letter, accept your Federal Direct Loan through your myInfo login Secure Area.
    • Students have the right to decline any or all of a loan that they are offered.

NOTE: If you have taken out federal student loans in the past and have now graduated or dropped 6 credits enrollment, you will be required to complete Exit Counseling.

 

Alternative Educational Loans (aka Private Loans)

Alternative educational loans are unsubsidized private loans available from lenders.  More information can be obtained in the Office of Financial Aid & Scholarships or through participating lenders. Students accepting only a private loan must complete an Alternative Loan Waiver (available on our forms page) with the Financial Aid Office before their funds can pay onto their account.


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