Loans

Federal Direct Subsidized/Unsubsidized Loan

Federal Direct Subsidized & Unsubsidized Loans

How do I apply?

Students must file a Free Application for Federal Student Aid (FAFSA) each year to qualify for a federal student loan. Qualified applicants must be a U.S. citizen or eligible alien. Lake Superior State University evaluates the FAFSA information and determines which types of loans you are eligible for and sends you an Official Offer of Award. First time borrowers will need to complete Entrance Counseling and sign a Master Promissory Note (MPN) prior to loan funds disbursing to their account. Once enrolled at LSSU, students must meet the Satisfactory Academic Progress (SAP) standards to be eligible for additional loans.

What is the difference between Subsidized and Unsubsidized Loans?

Subsidized (Sub.) Loan

The federal government does not charge interest on subsidized loans while a borrower is attending school at least half-time (6 or more credits), during the six-month grace period and during deferments (postponements of repayment). Financial need (determined from the FAFSA) must be shown to receive this type of loan.

Unsubsidized (Unsub.) Loan

For students without financial need, the Direct Loan Program offers Direct Unsubsidized Loans. Unlike the subsidized loan, the federal government charges interest on unsubsidized loans while borrowers are attending school, during the six-month grace period and during deferments. If borrowers do not wish to pay the interest while in school, the interest amounts will be capitalized (added) to the principal loan balance.

Interest Rates and Processing Fees for Subsidized and Unsubsidized Loans:

5.50% fixed interest rate for undergraduate loans disbursed between July 1, 2022 and June 30, 2023
1.057% loan origination fee will be deducted from each disbursement for loans first disbursed between October 1, 2023 and October 1, 2024.

Federal Direct Loan Program Limits:

Federal Direct Loan Program Limits
YEAR	DEPENDENT UNDERGRADUATE	INDEPENDENT UNDERGRADUATE*
Freshman 0-25 credits earned	$5,500 No more than $3,500 may be in subsidized loans.	$9,500 No more than $3,500 may be in subsidized loans.
Sophomore 26-55 credits earned	$6,500 No more than $4,500 may be in subsidized loans.	$10,500 No more than $4,500 may be in subsidized loans.
Junior/Senior 56+ credits earned	$7,500 No more than $5,500 may be in subsidized loans.	$12,500 No more than $5,500 may be in subsidized loans.
Aggregate Loan Limits(maximum lifetime eligibility)	$31,000 No more than $23,000 may be in subsidized loans.	$57,500 No more than $23,000 may be in subsidized loans.

*The independent undergraduate loan limits also apply to dependent students whose parents are unable to borrow under the Parent PLUS loan program.

The Following are sample disclosure statements and borrower rights:

Federal Parent PLUS Loan

Parents and/or step-parents of undergraduate dependent students may utilize the Federal Direct Parent PLUS Loan to assist in paying the student’s educational expenses. Parents may borrow up to the difference between the cost of education and other financial aid for which the student is eligible. The maximum amount available for the year is shown on the student’s Official Offer of Award as the “Maximum Parent PLUS or Alternative Loan” option.

Interest Rate and Processing Fees:

8.05% fixed interest rate for loans disbursed between July 1, 2023 and June 30, 2024

4.228% loan origination fee will be deducted for loans first disbursed between October 1, 2022 and October 1, 2023.

Applying for the Federal Direct Parent PLUS Loan:

There are two ways to apply:

ONLINE at https://studentloans.gov/myDirectLoan/index.action, OR
PAPER APPLICATION faxed/mailed to the Financial Aid Office.

Please DO NOT complete both an online application and a paper application. Choose only one method.

Steps to complete the online PLUS application:

The parent borrower must sign in to https://studentloans.gov/myDirectLoan/index.action with their FSA ID.
Once signed in, select Request Direct PLUS Loan.
Select Parent PLUS for the loan type.
Fully complete the application and submit it. Make sure to select the correct aid year.
Once submitted, you will receive notification immediately of your approval or denial.
Next, complete the Parent PLUS Master Promissory Note (MPN) at the same website, https://studentloans.gov/myDirectLoan/index.action. Make sure to complete all 4 steps and receive notice that your MPN is successfully submitted. Print a copy of the MPN for your records.

Both application methods will generate a credit check on the parent who is applying for the loan. The credit check is valid for 180 days.

If your parent’s application is denied due to adverse credit history, contact the LSSU Financial Aid Office to discuss your options. Beginning March 29, 2015, PLUS loan counseling will be required if you are determined to have adverse credit history, but qualify for a PLUS loan by documenting extenuating circumstances or obtaining an endorser. This can be completed at https://studentloans.gov/myDirectLoan/index.action.

Please note: PLUS Loan applications must be completed every year as part of the Federal Student Aid Application process.

Disbursement

The approved loan (less fees) will disburse to the student’s account after all steps are completed. Please allow 10 days for processing. If the approved loan is for the full academic year, it will be divided in half, with 50% of the loan disbursing in the fall and 50% in January.

Deferment and Repayment

Repayment begins on the PLUS loan immediately after the loan is fully disbursed. Parent borrowers may contact their loan servicer to request a deferment while the dependent student is enrolled at least half time and for an additional six months after the student ceases to be enrolled at least half time. Parent borrowers can also select the deferment option during the on-line application; however, this may not automatically defer the payments.

Disclosure Statements

Sample disclosures for PLUS loans:

Federal Nursing Loan

The Nursing Education Loan Program provides loans of up to $5,000 a year for students working towards a degree in the nursing program.

Eligibility requirements include, but are not limited to;

United States citizenship,
Enrollment status of at least half time (6 or more credits),
Demonstrated financial need.

ATTN: Nursing Students
Apply for repayment assistance with the Department of Health and Human Services by clicking here.

Private/Alternative Loan

Alternative Loans

Alternative loans are private, credit-based education loans. Students can borrow up to their Cost of Attendance (COA) less any other aid they receive. It is strongly encouraged that students complete the FAFSA to utilize their maximum federal aid eligibility first. The maximum amount that you could borrow is listed as the “Parent PLUS or Alternative Loan” option on your Official Offer of Award, assuming that you will utilize your federal loans first. Borrowing can be costly and we encourage students to exhaust all other options before applying for an alternative loan.

Consider some of these questions when researching alternative loans:

Do I want a fixed or variable interest rate?
When do I have to start paying back the loan? And for how many years?
Are there any loan fees?
What are the co-signer requirements?
Can I borrow even if I’m not a full-time student?
What are the borrower benefits?
Can the loan cover a past due balance?

Compare Lenders

For your convenience, we have provided a list for you to compare and contrast different lenders. ELM Select is a third party site that provides a neutral comprehensive list of private education loan lenders that LSSU students have borrowed from within the past three years, listed in random order. LSSU does not endorse, recommend, or promote any of the listed lenders. You are not obligated to borrow only from the lenders listed. LSSU will process alternative loans from lenders who are not listed, but remember that each lender has certain loan eligibility requirements that if not met by the student, may not allow us to process the loan request.

Loan Periods

When completing an application for an alternative loan, the lender will ask that you select the loan period most applicable for the semester(s) you wish to borrow. Select the loan period that most closely matches one of the loan periods indicated below.

Loan periods for LSSU are:
Fall Only: August – December
Fall & Spring: August – May
Spring Only: January – May
Summer Only: May-Aug (Use the entire summer semester period even if you are only attending a 6-week session.)

I applied and have been approved. What happens next?

Once you have submitted your application to the lender and completed any additional steps, the lender will send your loan request to the school. We review your loan request to make sure it fits within your cost of attendance budget. If the amount you requested is more than what your budget will allow, we will reduce your loan to an amount that will fit within your budget. The loan request is processed by our school and sent back to the lender. The lender will then send the borrower a final loan disclosure, giving you a three day cancellation period. Most lenders will send the loan funds to LSSU electronically. The funds are applied directly to your account. Any excess amount remaining after the funds have been applied will be refunded to you. The total processing time from the time you apply for a loan to the time the funds are sent to the school can range from 2-4 weeks.

Sample forms that lenders may ask you to complete during the application process:

Helpful tips:

Borrow only what you need! Borrowing can be costly so check out the Loan/Cost Estimator Tool to estimate how much is really needed.
Do your research! Look at each lender thoroughly to determine which loan will best suit your needs.
Apply with more than one lender. This helps you determine which lender has the most favorable interest rate. If you apply for more than one, make sure you do so in a short period of time (such as one week) in order to prevent several hits to your (and/or your co-signer’s) credit score.

Disclosures:

LSSU strongly encourages students to maximize all of their federal aid eligibility before requesting private education loans.
LSSU is not affiliated with any private student loan lenders.
LSSU provides a list of private student loan lenders (through a third party) without prejudice for the purpose to assist students and does not endorse, promote or recommend any one lender over another.
The listed lenders are those who LSSU students have borrowed from within the past 3 years. (With the exception of three lenders whose information is not available on ELM Select. Those lenders are: H.P.C. Credit Union, Northland Area Federal Credit Union and Pentagon Federal Credit Union.)
Lenders do not pay a fee to be included on this list.
Students are not obligated to borrow only from the lenders that are listed.
The maximum amount that a student can borrow is listed as the “Parent PLUS or Alternative Loan” option on their Official Offer of Award, assuming that they will utilize their federal student loans first.

Canadian Student Loan

Canadian students who need help paying for a college or university education may apply for aid through the Ontario Student Assistance Program (OSAP). OSAP offers a mixture of grants and loans.

To be considered for OSAP, you must meet the following requirements (additional qualifications may by required):

Be a Canadian citizen, Permanent Resident or Protected Person;
Meet Ontario residency requirements;
Be enrolled in an approved post secondary institution taking an approved program;
Be taking at least 60% of a full course load, or 40% if you have a permanent disability.

Students who complete an OSAP application may be eligible for the Canada-Ontario Integrated Student Loan (COISL). The loan is funded by both the Government of Ontario and the Government of Canada. The loan is issued through the National Student Loans Service Centre (NSLSC).

For more information, visit the OSAP web site at: www.osap.gov.on.ca.

Another loan option for Canadian students is available through Global Education Management Services (GEMS). Visit www.myglobaled.com for loan features, program requirements and how to apply.