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Student Loan

Student Loans

A student loan is a type of financial aid that must be repaid by the student, with interest. Loans are a legal obligation and a serious responsibility. There are serious consequences when students default on loans. It is important to think carefully about how much money is really needed to pay for your educational expenses so that you can borrow only what you need. 

Before considering a student loan you should first exhaust all other financial aid types, such as grants, scholarships, and work-study programs. In order to determine financial aid eligibility, students must first complete the Free Application for Federal Student Aid (FAFSA). The FAFSA can be completed online. If you need further assistance or have questions, please contact the Financial Aid Office at (269) 927-8112.

Types of Student Loans

Direct subsidized, unsubsidized and parent PLUS loans are federal student loans from the U.S. Department of Education Federal Student Aid program. As a result, a Free Application for Federal Student Aid (FAFSA) must be completed by the student and/or parent, as applicable, to qualify for these loans.

William D. Ford Federal Direct Stafford Loans (Direct Loans) are low-interest, educational loans. Funds are provided by the federal government. These loans help students finance their educational expenses. We urge you to borrow conservatively. Don't borrow more than you need! The interest rate on these loans are generally less than commercial rates and repayment begins after you leave school or drop below half-time enrollment. Find out more about student loans.

Eligibility

Eligibility for this need-based loan is determined by the Financial Aid Office based on your FAFSA results. Interest is paid by the federal government while you are enrolled at least half-time (minimum six credit hours a semester at LMC) and pursuing a certificate or degree program.

Freshman annual limit: $3,500

Sophomore annual limit: $4,500

Undergraduate aggregate limit: $23,000

Actions you MUST take to receive a Direct Loan

  • You must be enrolled at least half-time (minimum of 6 credit hours). 
  • You must accept your loan by accessing your Wavelink account. 
  • You must complete the Direct Loan Request Form.
  • You must complete Entrance Loan Counseling if you are a new or first-time borrower at LMC.
  • You must complete and sign a new Master Promissory Note (MPN) if you have not previously borrowed under the Direct Loan program.

Loan Approval/Denial

The Financial Aid Office may deny, on a case-by-case basis, a loan application for a student who has been in default, who has demonstrated or is demonstrating poor academic progress, and/or if student already has a high cumulative student loan debt. For new students to the college and for students with a history of questionable academic or financial aid progress, the financial aid office reserves the right to verify student’s actual attendance and progress in courses prior to loan approval. Poor attendance or progress may be a basis for denial of a loan or cancellation of a loan disbursement. The Financial Aid Office may also limit an individual student’s approved loan amount based on a number of factors, including total cumulative debt, rate of academic progression related to debt incurred, prior default status and other considerations.

Effective July 1, 2013, a new law, the Moving Ahead for Progress in the 21st Century Act, limits the benefits of the Direct Loan subsidy to an aggregated period of no more than 150% of program length for new borrowers. Once that limit has been exceeded, a student may borrow only unsubsidized loans and will begin to incur interest charges on outstanding subsidized loans.

Processing Fees

All Federal Direct Subsidized and Unsubsidized Stafford Loans that first disburse on or after October 1, 2014 are subject to a 1.073% origination fee. For example, if you borrow $3,500, you will receive $3,462.44. ($3,500 x 0.01073= $37.56, $3,500 - $37.56 = $3,462.44)

This non-need based loan is identical to the Subsidized Direct Stafford Loan except that the student is responsible for the interest while in school. The student has the option of paying the interest or having it capitalized which means the lender may add the accrued interest to the principal you owe. Federal Direct student loans have annual and lifetime limits. Additionally, students cannot borrower more than the cost of attendance minus other financial aid. Find out more about student loans.

Actions you MUST take to receive your Direct Loan:

  • You must be enrolled at least half-time (minimum of 6 credit hours).
  • You must complete the Additional Unsubsidized Budget Worksheet. (add link to form)
  • You must accept your loan by accessing your Wavelink.
  • You must complete Entrance Loan Counseling if you are a new or first-time borrower at LMC. www.studentloans.gov
  • You must complete and sign a new Master Promissory Note (MPN) if you have not previously borrowed under the Direct Loan program. www.studentloans.gov
  • Dependent Students may qualify for up to $2,000 in unsubsidized per academic year.
  • Independent Students may qualify for up to $6,000 in unsubsidized per academic year.

Processing Fees:

All Federal Direct Subsidized and Unsubsidized Stafford Loans that first disburse on or after October 1, 2014 are subject to a 1.073% origination fee. For example, if you borrow $3,500, you will receive $3,462.44. ($3,500 x 0.01073= $37.56, $3,500 - $37.56 = $3,462.44)

If you are the parent of an undergraduate student attending Lake Michigan College, you may be eligible for a PLUS Loan to assist in paying educational expenses. A parent is not guaranteed approval of the PLUS Loan. Upon application, the Department of Education (ED) will evaluate your credit and approve or deny your application based on your credit score and history. Only one parent can receive the PLUS loan for a student each year. The Master Promissory Note is valid for 10 years; however, a new credit report will be initiated by the ED each year you apply. Learn more about the PLUS Loan program.

Applying for a Parent PLUS Loan involves these steps:

  1. Together, you and your student must fill out the Free Application for Federal Student Aid (FAFSA) if you haven't already done so
  2. Complete any required financial aid packaging requirements, such as verification documents.
  3. Login to the Federal Student Loans website and complete the following items for Parent Borrowers:
    • Apply for a PLUS Loan
    • PLUS Master Promissory Note (MPN)
    • PLUS Counseling

You can request a loan amount up to the student’s LMC cost of attendance minus any other awarded financial assistance. Funds received through the Parent PLUS loan program will first be used to pay any balance that remains on the student’s account. Using LMC’s regular refund schedule, any funds that exceed the student’s bill will be either be refunded to the parent or student, based on which selection is indicated on the application,. If you are denied a PLUS Loan, you may still be able to borrow through the PLUS loan program if a creditworthy co-signer is approved by ED. If you are denied the PLUS Loan and wish to use an endorser (cosigner), please have that person complete the “Endorse a PLUS Loan” process on the Federal Student Loans website. If you are denied the PLUS loan and do not wish to provide an endorser, the student may be eligible to receive additional unsubsidized funds through the Direct Loan Program. Students must contact the LMC financial aid office to find out how to receive an additional unsubsidized loan due to PLUS credit denial.

Private (alternative) loans are student loans offered through agencies other than the federal government. We recommend you apply for federal financial aid first by completing the Free Application for Federal Student Aid (FAFSA) to see if you are eligible for more favorable types of financial aid such as grants, scholarships, work-study, or federal loans. Federal loans are often less expensive and offer better borrow benefits so you should investigate all funding options before applying for a private loan.

These loans are largely based on the creditworthiness of the borrower and/or co-signer, if applicable. The lender must be selected by the student so we encourage you to complete an online search and compare lender pros and cons prior to applying.

It is suggested that borrowers look for lenders who: 

  • have competitive rates
  • provide responsive customer service
  • offer straight-forward communication
  • appear student-focused

Avoid lenders who:

  • have escalating rate clauses
  • discourage you from working with your financial aid office
  • advertise introductory rates
  • charge high or hidden fees

Before you apply for a Private Alternative loan, you should ask yourself the following questions:

  • How much do I actually need to borrow for my education?
  • What is the interest rate, and is it fixed or variable?
  • Will I need a cosigner?
  • Are there application, processing, and/or disbursement fees?
  • How long do I have to repay the loan?
  • When does repayment begin?
  • What do I do if I cannot afford payments?
  • What borrower benefits are offered and are those subject to change?
  • What options are available for consolidation?
  • Are there any penalties I should be aware of?

We will certify a private/alternative loan application from any lender you choose. Before applying for an alternative loan, please discuss all of your options with the Financial Aid Office at (269) 927-8112 or finaid@lakemichigancollege.edu 

Federal Student Loan Process

Below are the steps to apply for and receive federal student loans at Lake Michigan College.

  1. Apply online for a Federal Student Aid (FSA) ID.
  2. Complete your Free Application for Federal Student Aid (FAFSA).
  3. Login to your LMC WaveLink account to check your federal student aid award, including student loans. This may take several weeks or months, depending on when you apply for aid and when the college awards student aid packages.
  4. If your WaveLink account indicates that you must satisfy any outstanding requirements, please complete those requirements as soon as possible.

For first-time borrowers at LMC

Once you have applied for a federal student loan and have satisfied outstanding requirements, your next steps are:

  • Complete the LMC Direct Loan Request Form
  • Complete Financial Avenue financial literacy tool. Use the following access code when signing up: iyrg3q. You must get a score of at least 75% of the six total courses to be considered complete. The LMC Financial Aid office will automatically receive notification within 24 hours of your completion of all six Financial Avenue courses.
  • Complete Entrance Loan Counseling explaining your rights and responsibilities as a borrower.

For all borrowers at LMC

Complete the Master Promissory Note. The master promissory note is your promise to repay your student loan including interest and fees.

Once we have processed your Direct Loan Request Form, your Direct Loan will automatically be packaged. You will be packaged to your maximum Subsidized eligibility (unless you are not eligible for subsidized loans, then you will receive the same amount in unsubsidized). In order for your loan funds to be processed and disbursed, you must accept, reduce or decline your loan.

To accept, reduce or decline your loan:

  • Log into Wavelink
  • Click on the “Student” tab
  • Click on the “Financial Aid Status”
  • Choose “20XX-XX Academic Year”
  • Click “Awarded” (blue link)
  • Click on the “Accept Award Offer” tab
  • At the “Accept Award Offer” tab, you may do the following:
    • Accept the full amount of the loans offered.
      • Click on “Accept Full Amount All Awards” (under the word “Total”)
    • Reduce the amount of loans you want to borrow 
      • Change the status to the right of the loan to “Accept” and then in the box to the right, enter the amount you want to borrow for the academic year.
      • Click “Submit Decision”
    • Decline the loans
      • You may decline your loans by changing the status to the right of the loan to “Decline."
      • Click “Submit Decision”

Please Note: Be very careful when entering this information. Once it has been submitted, it may only be updated by completing the Direct Loan Update Form and submitting it to the Financial Aid Office. This can significantly slow down the processing of your loan, and may delay the disbursement of the loans.