Types of Financial Aid

Grants

Pell Grant (FPELL)

A Federal Pell Grant, unlike a loan, does not have to be repaid.  This grant may be applied to tuition, fees, and books.  This grant is available to eligible undergraduate students enrolled in an eligible program (at least 16 credit hours) and demonstrating financial need.  To determine your need please apply for financial aid using the Free Application for Federal Student Aid (FAFSA) each academic year.  The amount of Federal Pell Grant a student may receive is dependent on their financial need, costs to attend school, status as full-time or part-time student and plans to attend school for a full academic year or less.  The maximum Federal Pell Grant amount for the 2014-2015 award year is $5730.

Students may not receive Federal Pell Grant funds from more than one school during the same semester, and must be a U.S. citizen or eligible non-citizen to qualify.

Federal Supplemental Educational Opportunity Grant (FSEOG)

The Federal Supplemental Educational Opportunity Grant does not have to be repaid.  This grant may be applied to tuition or fees.  The grant is available to eligible undergraduate students enrolled in an eligible program (at least 16 credit hours) and demonstrating the most financial need.  To determine your need please apply for financial aid using the Free Application for Federal Student Aid (FAFSA) each academic year. The maximum amount of this award at MCC is $400 per award year.  Funding for this program is limited and is awarded on a first-come-first-served basis.  Only U.S. citizens or eligible non-citizens will qualify for FSEOG.

Illinois Monetary Award Program Grant (SMAP)

The Illinois Monetary Award Program Grant does not have to be repaid.  This grant may be applied to tuition.  The grant is available to students showing Illinois residency and are attending an Illinois school, enrolled in a minimum of 3 credit hours, and demonstrate financial need. To determine your need please apply for financial aid using the Free Application for Federal Student Aid (FAFSA) each academic year.  The maximum amount of this award at MCC is dependent on the student’s eligibility and enrollment status.  Funding for this program is limited and is awarded on a first-come-first-served basis. Independent students must show they were an Illinois resident one full year prior to the first day of classes for fall term of the award year in question. Dependent student’s parent(s) must show Illinois residency as of the date the student’s FAFSA was filed.


New Changes to Direct Stafford Loans for 2014-2015

Time Limitation on Direct Subsidized Loan Eligibility New

The Moving Ahead for Progress in the 21st Century Act added a new provision to the Direct Loan statutory requirements that limits a first-time borrower's eligibility for Direct Subsidized Loans to a period not to exceed 150% of the length of the borrower’s educational program. Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150% limit to lose the interest subsidy on their Direct Subsidized Loans. More information is available in the Department of Education's document Time Limitation on Direct Subsidized Loan Eligibility for First-Time Borrowers on or after July 1, 2013.

Direct Loan Interest Rates New

Congress has passed and the President has signed the Bipartisan Student Loan Certainty Act of 2013, which ties Federal Student Loan interest rates to financial markets. Under this Act, interest rates will be determined each spring for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan. The table below provides interest rates for Direct Loans first disbursed on or after July 1, 2013.

Interest Rates for Direct Loans First Disbursed on or After 7/1/13
Loan Type Borrower Type Loans first disbursed on or after 7/1/13 and before 7/1/14 Loans first disbursed on or after 7/1/14 and before 7/1/15
Direct Subsidized Loans Undergraduate 3.86% 4.66%
Direct Unsubsidized Loans Undergraduate 3.86% 4.66%
Direct Parent PLUS Loans Parents of undergraduate Students 6.41% 7.21%

Direct Loan Origination Fees New

On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as a "sequester," to take effect if Congress failed to enact legislation to reduce the federal deficit by March 1, 2013. Because Congress did not act, these budget cuts are now in effect. The origination fee structure has changed for all Federal Direct Loans as of July 1, 2013. Direct Loan fees are deducted at the time of disbursement.

The chart below shows the loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Parent PLUS Loans first disbursed on or after December 1, 2013.

Loan Fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Parent PLUS Loans first disbursed on or after 12/1/13
Loan Type First Disbursement Date Loan Fee
Direct Subsidized Loans and Direct Unsubsidized Loans On or after 12/1/13 and before 10/1/14 1.072%
On or after 10/1/14 and before 10/1/15 1.073%
Direct Parent PLUS Loans On or after 12/1/13 and before 10/1/14 4.288%
On or after 10/1/14 and before 10/1/15 4.292%

 


Federal Direct Stafford Loans

Federal Direct Stafford loans are federal student loans for eligible students to help cover 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, you must be enrolled at least half-time in an approved program that leads to a degree or certificate program.  MCC will determine the type of loan and the actual amount you are eligible to receive each academic year.  However, there are limits on the amount in subsidized and unsubsidized loans that you may be eligible to receive each academic year and the total amounts that you may borrow for undergraduate aggregate loan limits.

The Department of Education will assign a servicer to your direct loan after the first disbursement. To find out who is servicing your loan, visit www.nslds.ed.gov.

Direct Subsidized Loans versus Direct Unsubsidized Loans
Subsidized Federal Direct Loan Unsubsidized Federal Direct Loan
Based on financial need. Not based on financial need.
Interest is subsidized (paid) by the government while you are enrolled for at least six credit hours. Interest is paid by the borrower at all times; it accrues from the time of disbursement and can be paid incrementally or capitalized (added to the unpaid principal loan amount) after the six-month grace period.

Federal Direct Stafford Loan Limits

The Federal Direct Stafford Loan program limits the amount that a student can borrow based on dependency status (dependent or independent), cost of attendance budget, financial need, and grade level. If eligible, you can borrow either subsidized or unsubsidized loans, or a combination of both loan types. Subsequent loans are available to eligible borrowers annually.

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.

How to Apply for a Federal Direct Stafford Loan

  1. Apply for a PINComplete the Free Application for Federal Student Aid (FAFSA) online.   Enter MCC’s school code (007691) on the FAFSA so MCC will receive your information. You must have a complete and fully processed application before you may apply for a student loan.
  2. You must be enrolled and maintain at least half-time status (6 credit hours).  Failure to maintain a half-time status may result in your loan not being disbursed or your disbursed loan being returned to the Department of Education.  You will be responsible for any balance due.
  3. First time Federal Direct Stafford Loan borrower to MCC:
    • Must complete Entrance Loan Counseling and Federal Direct Loan Master Promissory Note (MPN).
      • Go to https://studentloans.gov/myDirectLoan/index.action.
      • In the Manage My Direct Loan Box, create a login using your FAFSA pin.
      • Click on “Complete Entrance Counseling” link. Complete required steps through confirmation.
      • Click on "Complete Master Promissory note" link. Complete required steps through confirmation.
    • Complete and print the Student Budget Worksheet. Bring the completed form to the Financial Aid Office to meet with a Financial Aid Specialist.
    • Accept your student loan in myMCC.
  4. Returning Federal Direct Loan borrower to MCC:
    • Complete Entrance Loan Counseling
    • Complete and print the Student Budget Worksheet. Bring the completed form to the Financial Aid Office to meet with a Financial Aid Specialist.
    • Accept your student loan in myMCC.

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.

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.

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 to complete exit loan counseling. Half-time enrollment is being enrolled for at least six credit hours as an undergraduate student. Exit counseling allows the borrower an opportunity to view their total Federal Loan debt and their rights and responsibilities as a borrower.  Exit counseling also guides borrowers in selecting the most effective repayment plan based on the borrower’s current financial situation. You will receive information about the types of loans you received, when and where to make your payments, what to do if you cannot make your payments, and what can happen if you do not make your payments. 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.

Loan Repayment

Repayment on a Federal Direct Stafford Loan begins six months after a student graduates, withdraws, or drops below half-time enrollment. There are repayment plans available to help students manage their debt. Deferment and forbearance options are available, if needed, to temporarily suspend payments for certain reasons such as attending another school, unemployment, or financial hardship. If you are having problems repaying your loan, there may be help available. Learn more about repayment plans, deferment or forbearance.

Note: 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.

Private Loans

Private Education Loans, also known as Alternative Loans, are credit-based loans that can help bridge the gap between the actual cost of your education and the amount of your other financial aid funds. Private loans are offered by private lenders and should only be considered after exhausting all other sources of funding, including federal loans.

Learn about the advantages of Federal Student loans over Private Loans.