Student Loan Options

Federal Direct Student Loans are loans for students offered through the U.S. Department of Education. These loans are available to eligible students enrolled at least half time who complete the FAFSA.

Back to Top

The main difference is when interest starts and whether financial need is required. 

Subsidized loans 

• Based on financial need
• Government pays interest while you’re enrolled at least half time
• No interest during your 6-month grace period 

Unsubsidized loans 

• Not based on need
• Interest begins as soon as funds are disbursed
• Paying interest while in school lowers your total cost 

Back to Top

How much you can borrow depends on your year in school and whether you’re considered a dependent or independent student. 

Annual borrowing limits (combined subsidized + unsubsidized): 

• First year (0–23 credits): up to $5,500
• Second year (24+ credits): up to $6,500 

Additional eligibility: 

Independent students — or dependent students whose parent is denied a Parent PLUS Loan — may qualify for up to $4,000 more per year in unsubsidized loans. 

Lifetime borrowing limits 

There is also a limit on how much you can borrow over your lifetime in federal student loans. These totals include all federal undergraduate loans, including Direct Loans and older federal loans, like Federal Family Education Loans, from before 2010 (if applicable). 

Borrowing limits: 

• Dependent undergraduate students: up to $31,000 total (no more than $23,000 of this can be subsidized) 

• Independent undergraduate students: up to $57,500 total (no more than $23,000 of this can be subsidized) 

Once you reach your lifetime limit, you can’t borrow additional federal Direct Loans—even if you haven’t finished your program. 

Keep in mind: 

• These are maximum amounts
• You can’t borrow more than your cost of attendance minus other financial aid
• You don’t have to accept the full amount offered 

Back to Top

What you need to know: 

• Federal rules limit how long you can receive subsidized loans.
• You may receive subsidized loans for up to 150% of the credits required for your program. 

Example: 

If your program requires 64 credits, you can receive subsidized loans for up to 96 attempted credits. 

Once you reach this limit: 

• You’re no longer eligible for subsidized loans
• You may still qualify for unsubsidized loans 

This rule applies only to subsidized loans and is based on attempted credits, not completed ones.

Back to Top

Disbursement (how you receive the money): 

• Loans are paid directly to MCC in two installments per term:
  • First: About 30 days after classes begin, once your attendance is confirmed.
  • Second: At the midpoint of the semester, as long as you are attending classes. 
• Funds are applied to tuition, fees, and other school charges first
• Any remaining balance may be refunded to you
• If you’re a first-year, first-time borrower, your first disbursement will be delayed until 30 days after the start of the loan period. 

Repayment (when you pay it back): 

• Repayment begins six months after you graduate, leave school, or drop below half-time enrollment
• This six-month window is called your grace period
• You’ll choose a repayment plan and receive details before repayment begins. 

Learn More About Managing Loans  

 

Back to Top

Federal Parent PLUS Loans are loans made through the U.S. Department of Education that allow parents of dependent undergraduate students to help pay for college expenses not covered by other aid. 

What to know: 

• The parent, not the student, is the borrower
• Students must be enrolled at least half time (6+ credits)
• A credit check is required
• Parents with adverse credit may still qualify with an endorser

Back to Top

There is no set annual or lifetime dollar limit for Parent PLUS Loans. 

Annual limit: 

Parents may borrow up to the student’s cost of attendance minus all other financial aid received. 

Important to know: 

• Interest rates are fixed and set annually by the federal government
• Rates are updated each year on July 1
• A federal loan fee (up to 4%) is deducted from each disbursement
• Parents should borrow only what’s needed to cover remaining costs. 

Back to Top

PLUS loan funds are sent directly to MCC and applied to the student’s account. 

Disbursement details: 

• Paid in two equal installments per loan period
• Funds are applied to tuition, fees, and other school charges first
• Any remaining balance is refunded to the parent or student, based on the parent’s authorization 

Back to Top

Repayment begins 60 days after the loan is fully disbursed. 

Repayment options include: 

• Standard
• Extended
• Graduated 

Parents will receive detailed repayment information after the loan is approved. Deferment options may be available while the student is enrolled.

Back to Top

Parents apply directly through the Federal Student Aid website using their own FSA ID. 

Application steps: 

1. Log in at studentaid.gov 
2. Select “Start a Parent PLUS Loan Application”
3. Complete the credit check and loan request
4. Approval decisions are typically available right away. 

Learn more about Parent PLUS Loans 

Back to Top

Private student loans are offered by banks, credit unions, and other financial institutions to help pay for education costs. 

What to know: 

• These loans are not federal loans
• Approval is based on credit history and income
• Interest rates and fees vary by lender
• Most students need a cosigner to qualify
• Because terms vary widely, it’s important to review each lender’s details closely 

Back to Top

Private loans typically come with fewer protections than federal student loans. 

Key differences: 

• Interest rates are often higher than federal loans
• Repayment terms depend on the lender
• Fewer options for deferment, forgiveness, or income-based repayment 

For these reasons, MCC recommends exploring all federal aid options first before considering a private loan. 

Back to Top

Private loans are best used as a last option if federal loans, grants, scholarships, and other aid don’t fully cover your costs. 

Before borrowing: 

• Compare multiple lenders
• Understand repayment terms and interest rates
• Borrow only what you need 

Explore private loan options

Back to Top