Loan Products and Definitions
Direct Unsubsidized Loans
Interest on Direct Unsubsidized loans begins to accrue upon disbursement. Completion of the Free Application for Federal Student Aid (FAFSA) triggers review of eligibility for Direct Unsubsidized loan. The annual loan limit is $20,500 and the aggregate lifetime Direct Loan (total of Direct Subsidized/Unsubsidized) limit is $138,500. The interest rate for the 1617 academic year is 5.31%. Prepayment of student loans is permitted without penalty. Multiple repayment options are available with the standard repayment option spread over 10 years.
Direct Graduate PLUS Loans
These loans are credit-based and designed to supplement the Direct Unsubsidized Loans for up to the Cost of Attendance. The 1617 academic year interest rate for Grad PLUS is 6.31%.
There are loan fees associated with student loans and these are deducted from the proceeds that are posted to the student account. The fees are 1.068% for Direct Unsubsidized and 4.272% for Grad PLUS loans disbursed prior to October 1, 2016. New loan origination fee rates may be set by the federal government for loans disbursed on or after October 1, 2016.
Credit approval is based on federally-mandated criteria. In order to obtain credit-based loans (i.e. Grad PLUS or Private), credit approval is required. Credit submission is performed during the process of applying for the Grad PLUS loan. Items which affect credit decisions are: delinquencies, foreclosures, bankruptcy, tax liens.
Credit denial information from a credit submission is not made available to MiSPP. The Grad PLUS Loan Borrower Services phone number is 800-557-7394. If denied, students are directed to obtain their credit report and correct deficiencies that are preventing approval. A free annual credit report is available one time per year at www.annualcreditreport.com.
Direct Lending offers an endorser option so that a credit worthy borrower may co-sign a loan. Contact the Financial Aid Office for a loan identification code to obtain an endorser.
Private loans may not be consolidated (re-financed) with Direct Loans. Variable interest rates plus 3 to 14% additional interest points/fees, dependent on credit score, may apply.
Your Student Loan
Financial aid recipients attending MiSPP must complete exit counseling for federal loans prior to graduating, and when enrollment status is less than half-time. This counseling exercise is mandated by federal regulations. Through counseling you will receive loan information, repayment options, loan consolidation information, and budget planning assistance. You will be asked to provide personal references and driver’s license number.
The National Student Loan Data System houses a record of your federal student loans. Private loans are not included in this listing.
In general, 10 to 25 year plans will repay your loan. Your loan servicer will notify you of the date your first payment is due. If you do not choose a repayment plan, you will be placed on the standard repayment plan, with fixed monthly payments for up to 10 years. While the standard repayment plan is the fastest and least-expensive repayment, alternative payment plans for borrowers with high debt or those who need to make lower payments are available. For further questions about repayment plans, view the links provided and contact your loan servicer.
The federal government offers four income-driven repayment plans:
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
- Pay As You Earn Repayment Plan (PAYE Plan)
- Income-Based Repayment Plan (IBR Plan)
- Income-Contingent Repayment Plan (ICR Plan)
These plans are designed to make your student loan debt more manageable by reducing your monthly payment amount. If you’d like to repay your federal student loans under an income-driven plan, you need to fill out an application.
Within 30 days of the expected graduation date, students are provided exit packages by the Financial Aid office. The Department of Education requires that MiSPP federal loan borrowers complete exit counseling prior to graduation, or if enrollment falls below half-time. Exit counseling allows students to update contact information and review various repayment options. Completion of Exit Counseling is a requirement of the MiSPP graduation checklist. Visit Graduate Exit Counseling.
It is recommended that students establish a user ID and password to manage loans and stay informed of the student loan debt. To notify a lender of an in-school deferment, students should use the In-School Deferment Request form from the Department of Education.