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Student Loans

Miles Community College participates in the William D. Ford Federal Direct Loan (Direct Loan) Program. Loans made under the Direct Loan Program are borrowed from the U.S. Department of Education and administered by the Department. All student loans must be repaid per the terms of the Master Promissory Note. The following are the types of Direct Loans students can receive while attending MCC.

Direct Subsidized Loan

The Direct Subsidized Loan is available to students with financial need (COA-EFC=Need). Students are required to complete a FAFSA in order for the financial aid director to determine their eligibility for subsidized loans. No interest is charged while students are attending school and taking at least six credits (half-time). Interest is also deferred while students are in their grace periods and during other qualified deferment periods. Students must be enrolled in at least six credits and meet all of the general eligibility requirements needed to receive a subsidized loan. Loan repayment begins after six months if the student drops below six credits (if the grace period hasn’t already been used), withdraws, or graduates from MCC. Students who have never borrowed a Direct Loan prior to attending MCC are required to complete Entrance Counseling and a Master Promissory Note before disbursement of any loan funds can take place. Exit Counseling must be completed upon dropping below six credits, withdrawing, transferring, or graduating. See the Student Loan Chart below for annual and aggregate loan limits. The interest rate for subsidized loans borrowed between July 1, 2010-June 30, 2011 is 4.50%.

Direct Unsubsidized Loans

The Direct Unsubsidized Loan is a non-need based student loan for students who are ineligible for the Direct Subsidized Loan. The major difference between the unsubsidized and subsidized loans is interest begins accruing immediately upon disbursement of the unsubsidized loan. Students have the option to pay the interest while they are in school or allow the interest to capitalize. Since capitalized interest will be added to the principle balance of the student loan at the time of repayment, it is strongly recommended that students try and pay the interest that is accruing on the loan while they are in school. Students are required to complete a FAFSA in order for the financial aid director to determine their eligibility for the different types of student loans. Students must be enrolled in at least six credits and meet all of the general eligibility requirements needed to receive an unsubsidized loan. Loan repayment begins after six months if the student drops below six credits (if the grace period hasn’t already been used), withdraws, or graduates from MCC. Students who have never borrowed a Direct Loan prior to attending MCC are required to complete Entrance Counseling and a Master Promissory Note before disbursement of any loan funds can take place. Exit Counseling must be completed upon dropping below six credits, withdrawing, transferring, or graduating. See the Student Loan Chart below for annual and aggregate loan limits. The interest rate for unsubsidized loans borrowed between July 1, 2010-June 30, 2011 is 6.80%.

Student Loan Chart

The following chart shows the totals that a student may borrow throughout an academic year.

Student Status Freshman Annual Loan Limits Sophmore Annual Loan Limits
Dependent Students (except those whose parents have been denied a PLUS Loan) $3,500 (Base Amount)
$2,000 (Additional Unsubsidized Amount)
$4,500 (sub/unsub)
$2,000 (Additional Unsubsidized Amount)
Independent Students and Dependent Students Whose Parents cannot Borrow a PLUS Loan $3,500 (sub/unsub)
$6,000 (Additional Unsubsidized Amount)
$4,500 (sub/unsub)
$6,000 (Additional Unsubsidized Amount)

Aggregate Loan Limits

The maximum total that an undergraduate dependent student may borrow is $31,500 with no more being $23,000 of subsidized loans. An undergraduate independent student may borrow $57,500 with no more being $23,000 of subsidized loans.

Direct PLUS Loans (Parent Loans for Undergraduate Students)

Direct PLUS Loans are unsubsidized loans for the parents of dependent students. Parents must be the student’s biological or adoptive parent or the student’s stepparent, if the biological or adoptive parent has remarried at the time of application. The student of the parent must be enrolled in at least six credits and have parent’s income and asset information provided on the FAFSA.

In order to receive a PLUS loan, parents must complete the PLUS Application and master promissory note . When applying for the PLUS loan, the Department of Education will perform a check on the parent’s credit history. If the parent is found to have an adverse credit history, the dependent student is eligible to borrow additional unsubsidized loan funds. If the parent’s credit history is found to be in good standing, then the parent may borrow the cost of attendance less any other financial aid that the student has received. The interest rate on the PLUS loan is 7.90%. There is also a 2.5% origination fee that is deducted prior to disbursement. PLUS borrowers must begin repayment 60 days after the loan has been fully disbursed. For more information on the PLUS loan, please contact Loren Lancaster, financial aid director, at 1-800-541-9281, ext. 6171, (406) 874-6171, or FinAid@milescc.edu.

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