Loans

  • Federal Direct Loans

    Federal Direct Stafford loans are federal student loans for eligible students to help cover the cost of higher education. The US Department of Education offers eligible students Direct Subsidized Loans and Direct Unsubsidized Loans. To receive either type of loan, student must be enrolled in Financial Aid eligible academic program.  Eligible programs consist of a degree or certificate of 16 credit hours or more. To view your current active academic program(s), go to myMCC/My Tool Box/Students Menu/Academic Profile/My Profile/Academic Program. You must be enrolled in at least six credit hours that are required to complete your eligible academic program.

    MCC will determine the type of loan and the actual amount you are eligible to receive each academic year. There are annual and aggregate limits to the amount of subsidized and unsubsidized loans that you may be eligible to receive. Limit details can be found in the tables below.

    Visit www.direct.ed.gov/student.html for more Direct Loan information.

  • Types of Direct Loans

    Federal Direct Subsidized Loan

    Subsidized Loans are made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education. The Department of Education pays the interest on the loan while you are enrolled in school at least six credit hours (half-time) and during the six months grace period.  Loan repayment begins six months after you cease half time enrollment.

    Time Limitations on Direct Subsidized Loan Eligibility for First-Time Borrowers on or after July 1, 2013.

    Students may not receive Direct Subsidized Loans for more than 150% of the published length of their program. This is called your “maximum eligibility period”. If a student continuously enrolls and does not complete their program (or transfers to a program of equal or less length), they will lose their interest subsidy on Federal Direct Subsidized Loan(s) for the remaining life of the loan(s).

    Please visit https://studentloans.gov/myDirectLoan/directSubsidizedLoanTimeLimitation.action for more information on the time limitation on Direct Subsidized Loan eligibility.

    Federal Direct Unsubsidized Loan

    This loan is typically awarded to students who do not demonstrate financial need. Students are responsible for the interest, which begins to accrue at the time of disbursement. Although principal payments can be postponed, interest will be capitalized, meaning the lender will add the accrued interest to the principal balance owed. Loan repayment begins six months after you cease half-time enrollment.

    Federal Direct Parent PLUS Loan

    Federal Direct Parent PLUS Loans are federal loans that parents of dependent undergraduate students can use to help pay education expenses. To receive a Parent PLUS loan, the student must be enrolled in a Financial Aid eligible academic program.  Eligible programs consist of a degree or certificate of 16 credit hours or more. To view the student’s current active academic program(s), go to www.mchenry.edu/mymcc/My Tool Box/Students Menu/Academic Profile/My Profile/Academic Program.  Student must be enrolled at least 6 credit hours that are required to complete your eligible academic program The Direct PLUS Loan is a loan that must be repaid and repayment begins 60 days after the loan is fully disbursed. For additional information regarding the Federal Direct PLUS Loan program, visit: https://studentaid.ed.gov/types/loans/plus

    Federal Direct Stafford Loan Limits for Dependent Students

    Grade Level Base Loan Amount
    (Maximum Subsidized and/or Unsubsidized)
    Additional Unsubsidized
    Loan Amount
    Total Annual Loan Amount Maximum
    Total Debt from Stafford Loans
    (Aggregate Loan Limits)
    First Year Limit:
    Undergrad/
    freshman with less than 30 earned hours
    $3,500 $2,000* $5,500 $31,000
    Second Year Limit:
    Undergrad/
    sophomore with 30 or more earned hours
    $4,500 $2,000* $6,500 (No more than $23,000 can be in subsidized loans)

    *Additional Unsubsidized is available for dependents whose parents have been denied a Parent PLUS Loan.

    Federal Direct Stafford Loan Limits for Independent Students and Dependent Students Whose Parents are Denied a PLUS Loan)

    Class Level Base Loan Amount
    (Maximum Subsidized and/or Unsubsidized)
    Additional Unsubsidized
    Loan Amount
    Total Annual Loan Amount Maximum
    Total Debt from Stafford Loans
    (Aggregate Loan Limits)
    First Year Limit:
    Undergrad/
    freshman with less than 30 earned hours
    $3,500 $6,000 $9,500 $57,500
    Second Year Limit: 
    Undergrad/
    sophomore with 30 or more earned hours
    $4,500 $6,000 $10,500 (No more than $23,000 can be in subsidized loans)

    Note: The Aggregate Maximum includes outstanding loans for ALL your undergraduate studies. Once you have reached the Aggregate Maximum, you cannot borrow until your debt is paid down below the set limits. Make sure you Know What You Owe.

  • Federal Direct Loan - Interest Rates and Loan Fees

    Interest Rates for Direct Loans First Disbursed on or After July 1, 2015

    Loan Type Borrower Type Loans first disbursed on or after 7/1/16 and before 7/1/17
    Direct Subsidized Undergraduate 3.76%
    Direct Unsubsidized Undergraduate 3.76%
    Direct PLUS Parents of undergraduate Students 6.31%
    Subsidized loans with a first disbursement on or after July 1, 2012, and before July 1, 2014, are not eligible for the federal interest subsidy during the six-month grace period before repayment begins.

    There is a loan fee on all Direct Subsidized Loans and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement.

    Loan Fees for Direct Subsidized Loans and Direct Unsubsidized Loans

    First Disbursement Date Loan Fee
    On or after Oct. 1, 2015, and before Oct. 1, 2016 1.068%
    On or after Oct. 1, 2016, and before Oct. 1, 2017 1.069%

    See Direct Loan for more information on Direct Loan Interest Rates and Direct Loan Fees.

  • new icon Loan Application and Disbursement

    Loan Application and Student Loan Workshop

    The Office of Financial Aid and Veteran Benefits is conducting Student Loan Workshops as part of the Direct Loan process. The Student Loan Workshops will provide you with a detailed explanation of the borrowing process from determining your borrowing needs to repayment options. Specific topics include: types of Federal Direct Loans, borrowing limits, Department of Education expectations, available repayment options and the rights and responsibilities as a borrower. You will learn the type and amount of loan you're eligible for and be given the opportunity to make adjustments, based on your needs.

    You MUST complete these steps PRIOR to registering for the Student Loan Workshop.

    Note: Completing Entrance Loan Counseling and the Direct Loan Master Promissory Note is not a commitment to borrow funds for your education. If, after attending loan counseling, you determine a federal student loan is not a good option for you, you may choose not to pursue federal loan funds.

    1. Complete and submit the Free Application for Federal Student Aid (FAFSA).
    2. Complete the Financial Aid Process

    3. If you're a first-time Federal Direct Loan borrower to MCC:
      • Complete Entrance Loan Counseling and Direct Loan Master Promissory Note (MPN).
        • Go to StudentLoans.gov.
        • In the Manage My Direct Loan box, create a login using your FSA ID.
        • Select Complete Entrance Counseling. Complete required steps through confirmation.
        • Select Complete Master Promissory Note. Complete required steps through confirmation.
      • Complete and print this Loan Request Worksheet.
      • Bring the completed Loan Request Worksheet to the Student Loan Workshop.
    4. If you're a returning Federal Direct Loan borrower to MCC:
      • Complete and print this Loan Request Worksheet.
      • Bring the completed Loan Request Worksheet to the Student Loan Workshop.
    5. Be enrolled in a Financial Aid-eligible academic program.  Eligible programs consist of a degree or certificate of 16 credit hours or more.
      • To view your current active academic program(s), go to myMCC > My Tool Box > Students Menu > Academic Profile > My Profile > Academic Program
    6. Be enrolled in at least 6 credit hours that are required to complete your eligible academic program.

    Register for your workshop »

    Loan Disbursement

    Federal regulation requires Direct Loan funds be disbursed in two equal payments. Loans are disbursed around the second week of the semester. Please allow one to two weeks after the disbursement date for payments to be applied to student accounts. In the case of a credit balance, remaining funds will be applied to a student's myMCC Plus Card.  

    If your loan period is for a single semester (Fall only or Spring only), your loan funds will be disbursed in two equal installments during the single semester, one at the beginning and one at midpoint. If you drop below half-time status before the midpoint disbursement, undisbursed funds will be cancelled.

    First time borrowers are required to complete the first 30 days of their academic program before disbursements can be processed. Again, please allow one to two weeks after the disbursement date for payments to be applied to student accounts.

    The Department of Education will assign a servicer to your loan after the first disbursement. To view your current loan debt, loan servicer information, repayment calculator, log into the Federal Student Aid website.  Sign in using your email and FSA ID.

    Right to Cancel

    You have the right to cancel all or part of your federal loan(s) within 14 days of the start of the enrollment period for which the loan is intended or 14 days from the date the school notifies you of receipt of the loan funds. To cancel, provide a written request to the Office of Financial Aid. You may return all or part of your loan to your lender within 120 days of the date your loan is disbursed to you. Contact your servicer for guidance on how and where to return your loan money.

  • Exit Counseling

    Federal regulations require student loan borrowers who graduate, withdraw (regardless of plans to transfer to another school), or drop below half-time status complete exit counseling. Half-time enrollment requires enrollment in at least six credit hours required to complete an eligible academic program. Exit Counseling allows the borrower an opportunity to view their total Federal Loan debt and their rights and responsibilities as a borrower.  Exit Counseling guides borrowers in selecting the most effective repayment plan based on their current financial situation. Students will receive information about the types of loans they received, when and where to make payments, what to do if a payment cannot be made, and the consequences of a missed payment(s). In order to make this as easy and convenient as possible, borrowers are able to complete this requirement online.

    If you fail to complete Exit Counseling, a hold will be placed on your records. You will not be able to re-enroll in classes or obtain other school services and documents including, but not limited to, your transcripts.

    How to Complete Exit Counseling

    1. Sign in to https://studentloans.gov/myDirectLoan/index.action.
    2. Once you have confirmed your information, select “Complete Counseling.”
    3. Select Exit Counseling by clicking on the “Start” button.
    4. Under “School Information”, select “Illinois” as the “School State” and “McHenry County College”   as the “School Name.”
    5. Complete required steps through confirmation. Print a copy for your records.
    6. The Department of Education will send MCC confirmation of completion within 24 hours.  When confirmation is received, any restrictions on your account will be removed.
  • Understanding Repayment

    Grace Periods

    When you graduate, drop below half time or withdraw from your academic program, you will receive a six-month grace period for your Direct Subsidized and Unsubsidized Loans.  Your grace period begins the day after you stop attending school at least a half-time.  Once your grace period ends, you must begin repaying your loan(s).

    If you have an in-school deferment on a Direct Subsidized or Unsubsidized loan that entered repayment at the earlier date (before you returned to school) and you graduate, drop below half-time enrollment, or withdraw from school, you will be required to immediately begin making payments on the loan because the 6-month grace period has already been used up, there is no second grace period. 

    There is no grace period for Direct PLUS Loans – the repayment period for the PLUS loan begins on the day after the final loan disbursement is made.  However, if you're a parent PLUS borrower, you can defer repayment of Direct PLUS Loans first disbursed on or after July 1, 2008, while the student for whom you obtained the loan is enrolled at least half time, and for an additional 6 months after the student graduates or drops below half-time enrollment.

    Remember, if you choose to defer payment on a Direct PLUS Loan, any interest that accumulates during the deferment period will be added to the unpaid principal amount of your loan. This is called "capitalization," and it increases your debt because you'll have to pay interest on this higher principal balance.

    Loan Repayment

    Repayment on a Federal Direct Stafford Loan begins six months after a student graduates, withdraws, or drops below half-time enrollment. There’s a lot to consider when repaying your federal loan.  Understanding the details of repayment can save you time and money.  Find out when repayment starts, how to make your payment, repayment options, and what to do if you have trouble making payments. Learn more about deferment or forbearance.

    Delinquency and Default

    Your loan becomes delinquent the first day after you miss a payment. If you are delinquent on your loan payments, late fees may be added, and your delinquency will be reported to one or more national consumer reporting agencies (credit bureaus).  If you cannot make your loan payment contact your loan servicer immediately to find out how you can stay on track with your payments.  If a payment is delinquent for 270 days or more you will be in default.

    To default means you failed to make your payments on your student loan as scheduled according to the terms of your Master Promissory Note (MPN), the binding legal document you signed at the time you took out your loan.

    The Consequences of Default:

    • The entire unpaid balance of your loan and any interest is immediately due and payable.
    • You lose eligibility for deferment, forbearance, and repayment plans.
    • You lose eligibility for additional federal student aid.
    • Your loan account is assigned to a collection agency.
    • The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card.
    • Your federal and state taxes may be withheld through a tax offset. This means that the Internal Revenue Service can take your federal and state tax refund to collect any of your defaulted student loan debt.
    • Your student loan debt will increase because of the late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process.
    • Your employer (at the request of the federal government) can withhold money from your pay and send the money to the government. This process is called wage garnishment.
    • The loan holder can take legal action against you, and you may not be able to purchase or sell assets such as real estate.
    • Federal employees face the possibility of having 15% of their disposable pay offset by their employer toward repayment of their loan through Federal Salary Offset.
    • It will take years to reestablish your credit and recover from default.

    Deferment and Forbearance

    Deferment

    Under certain circumstances, you may temporarily postpone or reduce your federal student loan payments. Postponing or reducing your payments may help avoid default.  Depending on the type of loan you have, you would still be responsible for interest on the loans.  If you don’t pay the interest on your loan during deferment, it may be capitalized (added to your principal balance), and the amount you pay in the future will be higher.

    Circumstances which may qualify you for a deferment include the following:

    • Returning to school in at least a half-time status
    • Studying full time in a graduate fellowship
    • Approved rehabilitation training
    • Unemployment (deferment limited to 3 years)
    • Economic hardship (deferment limited to 3 years)
    Forbearance

    If you can't make your scheduled loan payments, but don't qualify for a deferment, your loan servicer may be able to grant you a forbearance. With forbearance, you may be able to stop making payments or reduce your monthly payment for up to 12 months. Interest will continue to accrue on your subsidized and unsubsidized loans (including all PLUS loans). 
    Two types of forbearances:

    • Discretionary
    • Mandatory

    Find out if you qualify by visiting https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance or contact your federal loan servicer. You will need to work with your loan servicer to apply for deferment or forbearance; and be sure to keep making payments on your loan until the deferment or forbearance is in place.
    Go to the National Student Loan Data System (NSLDS) to review your loan information and obtain your servicer’s information.

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