Loans

We know that most families want to maximize the amount of grant and scholarship assistance for which they are eligible each year. However, we also know that many families will still have some level of unmet need even after all grant and scholarship awards have been applied. Student loans provide an opportunity for additional assistance in covering the immediate costs associated with remaining educational expenses. 

While no student or family should enter into debt without careful planning, most experts agree that educational loans are what we would call “good debt.” Much like using a mortgage to buy a home, paying for higher education may be an instance where the leveraging power of a small loan puts you in the best long term overall financial position. The careful use of loan assistance allows you to invest in education now, with the understanding that a degree will likely help to increase overall lifetime earning potential, making repayment in the future possible.

It is vitally important that you and your family carefully consider the amount of loans that are truly needed to pay for necessary and legitimate educational expenses, and that you not borrow one penny more than is needed. Loans, unlike grants, federal work-study, or scholarships, are borrowed funds that must be repaid. Although payment is usually deferred while you are enrolled at least half-time, failure to pay when the loan is due will damage your credit rating and can carry substantial penalties. 

Budgeting is very important when considering how much to borrow, so make sure you and your family have set realistic borrowing levels that will ensure that you will be able to repay your student loans after you graduate.

A variety of direct student loans are available through the US Department of Education. These loans carry low interest rates, and allow you to borrow directly from the federal government. In most cases, you will have a single loan servicer for repayment, regardless of whether you received multiple types of direct loans at multiple institutions. It’s important that you and your family carefully review all information related to loan borrowing, and that you make good decisions regarding the type and amounts of loans received.

In general, Federal Direct Student loans are available as a subsidized loan for undergraduate students with demonstrated financial need, or as an unsubsidized loan for undergraduate or graduate students without demonstrated financial need. Federal PLUS loans are low-interest federally funded loans available to the parents of dependent children or to graduate students who qualify through a credit check.

Federal Direct Student Loan Program  Federal Direct PLUS Loan Program
Federal Perkins Loan Program  Loan Counseling, Repayment and Forgiveness
Code of Conduct  Private Loans  Loan Forms  
Loan Resources and Services

Federal Direct Student Loan Program

Federal Direct Student Loans are made available through the William D. Ford Federal Direct Loan Program. This program offers two types of Federal Direct Loans: subsidized and unsubsidized. These loans must be used for educational expenses during attendance at Middle Tennessee State University

There is a grace period of 6 months after graduation or dropping below half-time attendance before repayment of the principal of the Federal Direct Student Loan begins. Loan amounts are awarded based on dependency status and grade level and cannot exceed the established cost of attendance for the school, including other aid received. Your MTSU financial aid awards may include both subsidized and unsubsidized loans.

Federal Direct Subsidized Loan

Subsidized loans are awarded on the basis of financial need as determined by the Financial Aid Office. With a subsidized loan, the federal government pays interest on the student loan while you are enrolled at the university on at least a half-time basis, and during the six-month grace period after you are no longer enrolled on at least a half-time basis. For Direct Subsidized loans disbursed between July 1, 2012 and June 30, 2014, the student is responsible for paying the interest during the grace period. 

Federal regulatory policy has placed a limitation on Federal Direct Subsidized Loan eligibility for all new federal student loan borrowers. A first-time borrower is defined as a student who has no outstanding balance on a Federal Direct Loan or Federal Family Educational Loan (FFEL) when receiving a Direct Loan on or after July 1, 2013. 

Federal Direct Subsidized Loans will now be limited to 150% of the borrower's education program. For a 4-year bachelor's degree program, the maximum period of subsidized loan eligibility is 6 years. Read more information on the 150% Federal Direct Subsidized Loan Limit.

Note: Borrowers may still be eligible to receive federal unsubsidized loans once the subsidized loan limit has been reached. 

Federal Direct Unsubsidized Loan

Student borrowers may qualify for this type of loan regardless of need or income. Both undergraduate and graduate students may be eligible. With unsubsidized loans, you are responsible for interest that accrues on the loan from the time the loan is disbursed until it is paid in full. You may choose to pay the interest as it accrues while you are enrolled, or you may defer the interest payments and allow them to accumulate (capitalize). If you choose to pay the interest as it accumulates, you will ultimately repay less. If you defer the interest, it will capitalize, which will result in an increase in student loan debt and monthly payments.

Federal Direct Loan Eligibility

In addition to filing the FAFSA, the following eligibility requirements must be met in order to qualify for a Federal Direct Student Loan:

  • Half-time enrollment at an eligible institution, such as MTSU, in an eligible degree seeking undergraduate or graduate program (Graduate Certificate programs are not eligible)
  • Be a U.S. citizen or eligible non-citizen
  • Maintain Satisfactory Academic Progress (SAP)
  • Not be in default on an educational loan or overpayment on an educational grant
  • Not have Title IV student loans that exceed the annual or aggregate loan limits
     

Direct Loan limits

Eligibility for all Federal Direct Loans will be based on cost of attendance, the Expected Family Contribution (EFC) as determined by FAFSA, other aid received, and the loan limits set by the U.S. Department of Education. Students may never qualify for more than the cost of attendance for the college or the annual loan limit. The charts below show the maximum amounts you may borrow. 

Undergraduate loan limits for dependent students

  Freshman
(0-29 Hours)
Sophomore
(30-59 HOURS)
Junior
(60-89 hours)
Senior
(90+ hours)
Maximum Subsidized $3,500 $4,500 $5,500 $5,500
Unsubsidized $2,000 $2,000  $2,000 $2,000
Total $5,500 $6,500  $7,500 $7,500

 

Undergraduate loan limits for independent studemts or dependent students with a Parent PLUS denial

  FRESHMAN 
(0-29 HOURS)
SOPHOMORE 
(30-59 HOURS)
JUNIOR 
(60-89 HOURS)
SENIOR 
(90+ HOURS)
Maximum Subsidized $3,500 $4,500 $5,500 $5,500
Unsubsidized $2,000 $2,000  $2,000 $2,000
Additional Unsubsidized $4,000 $4,000  $5,000 $5,000
Total $9,500 $10,500  $12,500 $12,500

 

Federal Direct maximum aggregate limits

Dependent Undergraduate Independent Undergraduate
$31,000 (no more than $23,000 of which can be subsidized) $57,500 (no more than $23,000 of which can be subsidized)

 

Additional bachelor’s degree

Undergraduate students enrolled at least half-time while taking coursework toward an additional bachelor's degree may qualify for a Federal Direct Student Loan provided they have not reached their aggregate limit. Before a loan can be processed and/or disbursed, you must submit a Request for Federal Financial Aid for Additional Coursework form to your Enrollment Counselor.

Teacher's certification

Students who have completed an undergraduate degree and are enrolled for the sole purpose of attaining teacher licensure may be eligible for Federal Direct Student Loans at the undergraduate level, provided they have not reached their undergraduate aggregate loan limit. To receive aid, you must be enrolled at least half-time in required teacher certification coursework. You must submit a copy of your Program of Study and a Request for Federal Financial Aid for Additional Coursework form to your Enrollment Counselor. The yearly maximum loan amount available is a Senior loan limit for independent students. For dependent students working on a Teacher’s Certification program, the maximum loan amount cannot exceed $5,500.

Graduate student loan limits

Federal Direct Loan Eligibility

  Graduate Yearly Loan Maximum
Unsubsidized $20,500
Total $20,500

 

 Federal Direct Maximum Aggregate Limits

Graduate
$138,500 (no more than $65,500 of which can be subsidized)

 

Graduate students required to take undergraduate prerequisites

Graduate students who are required to enroll in undergraduate courses in order to be admitted into a graduate program may qualify for Federal Direct Student Loans at the undergraduate level, provided they have not reached their aggregate undergraduate loan limits. If eligible, you may receive undergraduate loans for up to a maximum of 12 consecutive months while enrolled in these prerequisites. Before the loan can be processed, you must submit to your Enrollment Counselor a Request for Federal Financial Aid for Additional Coursework form and either 1.) a letter from the academic department or graduation analyst or 2.) a copy of the candidacy form indicating which courses are required as prerequisites.

Graduate students and teacher certification

Non-degree seeking graduate students who are working on a teacher licensure program may be eligible for Federal Direct Student Loans at the Undergraduate level, provided they have not reached their undergraduate aggregate loan limit. Before a loan can be processed and/or disbursed, you must provide your Enrollment Counselor with a copy of your Program of Study and the Request for Federal Financial Aid for Additional Coursework form.

Federal Direct Student Loan application process

  1. Complete the Free Application for Federal Student Aid (FAFSA)
  2. Once your FAFSA has been processed, you will receive a valid Student Aid Report (SAR) which will summarize all of the information you provided on your FAFSA and your federally calculated Expected Family Contribution (EFC) that is used in determining your eligibility for federal student aid. An electronic copy of your SAR will automatically be sent to the Office of Financial Aid of the school(s) listed on your FAFSA.
  3. Once your financial aid file has been completed, the Financial Aid Office will notify you by campus e-mail to view your awards on RaiderNet. Federal Student Loans will either be “offered” on your RaiderNet account or you will have an option to submit a Loan Request Sheet. 

  4. If Federal Direct Student Loans are “offered” on RaiderNet, you will have the option to accept or decline your student loan awards and have the option to accept a lesser amount than was awarded. Always accept a subsidized loan before accepting an unsubsidized loan!
    1. Please remember that you will need to determine what your expenses and resources will be for the upcoming year before accepting or refusing a loan. Do not borrow more than you need! If you do not need a loan, select 'Decline' under the ‘Accept Award’ column and then click ‘submit decision’.
    2. One semester only loans will require a Loan Request Sheet to be turned in to your Enrollment Counselor.
  5. All first-time borrowers at MTSU must complete an online Loan Entrance Counseling before receiving any loan funds.
  6. You must complete your Federal Direct Loan Master Promissory Note (MPN) before loan funds can disburse onto your account. Once completed, your MPN is generally valid for ten years.
    1. You will receive a Notice of Guarantee and Disclosure Statement. This is your notice of loan approval, and it contains essential information about the terms and conditions of your loan. It also tells you the amount of your loan and an estimated date for the arrival of funds.
  7. Student loan funds are disbursed to accounts approximately three days before classes begin “if” all of the above steps have been completed. Students who have signed up for direct deposit will generally receive a refund (if applicable) within the first week of classes. Otherwise, student loan funds are disbursed to accounts throughout the semester as the above steps are completed, and students will receive refunds as applicable.
     

Federal Direct Loan Exit counseling

The federal government requires all students who drop below half-time status, withdraw, graduate, or do not return to MTSU (even if they plan to attend another school) to complete Exit Counseling. This exit counseling will give you important information about repaying your loan. Information about Direct Loan Exit Counseling may be found here.

Always monitor your federal student loan indebtedness! You can view your federal student loan history at www.nslds.ed.gov. You will need your FAFSA PIN to access this site. 

Federal Direct PLUS Loan Program

The Federal Direct PLUS loan is a low-interest federally funded loan for parents of dependent students and for graduate students. These loans enable parents and/or graduate students with good credit histories to borrow funds to pay educational expenses. The amount of the loan may not exceed the cost of attendance minus other financial aid the student will receive. 

A parent or graduate student (the borrower) is eligible to apply if he or she is:

  • The natural parent, adoptive parent, or step-parent (If step-parent's income and assets are considered on the FAFSA) of an eligible dependent Undergraduate student. Grandparents, foster parents, legal guardians, aunts and uncles are not considered parents unless they have legally adopted the student. 
  • A U.S. citizen, U.S. national or eligible non-citizen.
  • Not in default on any Title IV loan program.
  • Must have a good credit history. Any adverse credit may cause the application to be denied.
     

Also, in the case of a Federal Direct Parent PLUS, the student for whom the parent is borrowing must be a dependent student (as defined by FAFSA) who is enrolled at least half-time and is maintaining Satisfactory Academic Progress.

The interest rate on a Federal Direct PLUS Loan is variable and is adjusted annually on July 1. The Federal Student Aid website publishes the most recent updates regarding current interest rates. The Federal PLUS Loan carries an origination fee, which is paid to the U.S. Department of Education to help offset the cost of operating the Federal Direct PLUS Loan Program. We recommend that, if possible, parents request the loan period of two semesters, to insure availability of funds for the full academic year.

For fall/spring Federal Direct PLUS loan periods, loans will be disbursed in two equal payments at the beginning of each semester. The loan funds are credited to the student’s account. Any amount owed to MTSU will be deducted from the loan funds. If the loan proceeds are more than what is owed, a Federal Direct PLUS refund will be given to the parent or student (if the parent authorizes). 

Federal PLUS Loan application process

Parents and students should begin completing the Free Application for Federal Student Aid (FAFSA) in January or as early as possible in each calendar year. If the proceeds of the Federal PLUS Loan are needed to pay for tuition and fees by the scheduled August payment deadline dates, the Federal PLUS Loan Request Sheet should be submitted to the Enrollment Counselor by mid-June. However, graduate students and parents may still apply for the Federal Direct PLUS Loan even after the semester begins as long as the student is enrolled at least half-time.

  1. The results from the Free Application for Federal Student Aid (FAFSA) must be on file in the Financial Aid Office. If you have not completed the FAFSA, you may apply online.
  2. Determine if the graduate student or parent is eligible for a Federal Direct PLUS Loan. Submit a Federal Direct PLUS Loan request sheet to the Enrollment Counselor. When you submit the Federal Direct PLUS Loan Request Sheet, MTSU will initiate a credit check with the Federal Direct loan program. Please submit your Federal Direct PLUS Loan Application at least 45 days prior to the time loan funds are needed.
  3. If the Federal Direct PLUS loan is approved, the graduate student or parent must sign the Master Promissory Note (MPN) with the Federal Direct loan program. The Federal Direct PLUS Master Promissory Note must be completed for the first Federal PLUS Loan processed, but not for subsequent loans (unless a co-signer has been used for the loan to be approved.) Additionally, if the Federal Direct PLUS borrower changes, the new borrower must complete a MPN using his/her assigned FAFSA PIN.

What happens if the Federal Direct PLUS loan is denied?

Credit approval or denial for a Federal Direct PLUS Loan is determined by the federal government; not Middle Tennessee State University. Questions regarding credit denials of a Federal Direct PLUS Loan can be directed to the Loan Origination Center at 1-800-557-7394.

If a parent is denied the Federal Direct PLUS Loan due to adverse credit history, a co-signer may be used for the loan to be approved. Otherwise, the student will then become eligible to receive additional Federal Direct Unsubsidized Loans. Freshmen and sophomores may apply for up to $4,000, and juniors and seniors may apply for up to $5,000 in these additional Unsubsidized Direct Loans.  

The student will need to request the additional unsubsidized amount by notifying their Enrollment Counselor and completing the Loan Request Sheet (LRS).

When does the Federal Direct PLUS loan have to be repaid?

The Federal Direct PLUS Loan will begin accruing interest once the loan disburses and repayment will begin approximately 60 days after the full loan has been disbursed, unless the borrower requests a deferment.

To request a deferment, the borrower may contact the loan servicer. You can identify your loan servicer by reviewing your loan disclosure or online at www.nslds.ed.gov. The borrower will need his/her FAFSA PIN to access this site.

The loan must be repaid within 10 years and the minimum monthly payment is $50.00, or higher depending upon the total amount borrowed. All or a portion of a Federal PLUS Loan may be repaid at any time without penalty. 

Federal Perkins Loan Program

The Federal Perkins Loan is a low interest (5%) federal student loan designed to provide additional assistance to low-income students. 

Students requesting the Federal Perkins Loan through MTSU must have a minimum GPA of 2.5 and an EFC equal or less than 5000 and unmet need within their financial aid budget. The average Federal Perkins Loan award is $1,500 per academic year. Priority consideration for the Federal Perkins Loan Program goes to students who have completed their FAFSA by March 1 and have otherwise submitted all requested information necessary to complete their financial aid file by the point awards are made. Typically, the awarding process for entering freshmen begins in late March and the awarding process for continuing / transfer students begins in late May. There is no guarantee that every eligible student will be able to receive a Federal Perkins Loan award.

You must begin repaying the loan to MTSU beginning 9 months after dropping below half-time status, withdrawing or graduating from MTSU. The repayment schedule depends on the size of your debt, and the length of your repayment period is 10 years with a minimum payment of $40 per month.

Provisions for the discharge or cancellation of a Federal Perkins Loan may be available to a select group of borrowers based on the job they attain after college. Speak with your Enrollment Counselor or contact the MTSU Business Office for more information.

Federal Perkins Loan application process

  1. Complete the Free Application for Federal Student Aid (FAFSA
  2. If awarded the Federal Perkins Loan, you must accept or decline your award on RaiderNet.
  3. Sign the Federal Perkins Promissory Note and Disclosure Statement in the Business Office.
  4. The Federal Perkins Loan is disbursed directly to the student account.
     

Loan counseling, repayment and forgiveness

The federal government wants to make sure that you fully understand your responsibilities as you assume a loan, and again when you leave MTSU and begin repayment of your loan. You will be required to complete entrance counseling as a pre-condition to receiving your Federal Direct Subsidized, Federal Direct Unsubsidized, or Federal Graduate PLUS loan. The link for entrance counseling is at StudentLoans.gov, under the section titled Manage My Direct Loan. 

Once you graduate or drop below half-time status, you will need to make plans to begin repayment of your loan. You will also be required to participate in Exit Loan Counseling whenever you drop below half-time enrollment status, withdraw from the university, or graduate. In most cases, you’ll have a grace period of six months after you graduate or withdraw from the university before you must begin making payments for your federal student loans. The link for exit counseling is at StudentLoans.gov, under the section titled Manage My Direct Loan.

Finally, you’ll want to carefully review options that may be available to you for various types of loan consolidation, loan forgiveness, or loan discharge. For more information, go to StudentLoans.gov and review the section titled Managing Repayment.

Code of conduct

The federal Higher Education Opportunity Act (HEOA) of 2008 established a code of conduct applicable to financial aid employees and universities as they administer the Title IV Loan program. In general, the Code prohibits any financial aid employee or university from participating in any revenue-sharing arrangements with any lender, or from receiving gifts from any lender, guarantor or loan servicer in exchange for providing Loan Funds to its student population.

Private loans

Private Loans should be considered as a last resort when financing your college education. We strongly encourage you to borrow from the Federal Student Loan program before considering Private Loans. Additionally, graduate students are encouraged to apply for a Federal Graduate PLUS Loan before applying for Private Loans.

Generally, you will receive a better interest rate on Federal Student Loans than with Private Loans. However, if you need additional funding beyond your Federal Student Loan eligibility, Private Loans may help you cover unmet educational expenses.

Private Loans are made by banks and other financial institutions and are subject to their terms. Eligibility for these loans requires a credit check and students are often required to have a co-signer to qualify

Middle Tennessee State University does not endorse or recommend any specific private loan product. In determining which private loan is best for your needs, we recommend you research and compare loan interest rates, fees, repayment options, and eligibility requirements.

Private loan application process

  1. Many Private loan lenders provide an online application. After you carefully compare the different lenders' loan information, you may want to verify the following information with the lender.
    1. Does the lender process Private Loans with Middle Tennessee State University?
    2. What will my interest rate be?
    3. Are there any fees that are deducted from the loan before I receive my loan funds?
    4. Am I required to start repaying the loan while I am in school?
    5. How many hours must I be enrolled to receive the loan?
  2. After you apply, the lender will send you three separate disclosures during the Private Loan process. You must sign and return these disclosures to the lender in a timely manner. You will be required to complete a Self-Certification Form.
  3. After you are pre-approved for the Private Loan and have returned any required paperwork to the lender, the lender will send a certification request either by paper form or electronically to the MTSU Financial Aid Office. The Financial Aid Office certifies maximum loan eligibility up to the Cost of Attendance minus other financial aid and resources. Students admitted to the Aerospace program and enrolled in flight labs should contact their Enrollment Counselor to submit a form necessary so that their Cost of Attendance can be updated to include the increased flight lab costs.
  4. If you have submitted all required paperwork and the MTSU Financial Aid Office has completed the certification request, the lender should be ready to disburse your loan funds to MTSU depending on your loan period. If you have a fall/spring loan period, then half of the loan will be disbursed equally between the fall and spring semesters. If the lender sends the loan funds by Electronic Fund Transfer, then the funds will automatically be credited to your student account. If the lender sends the loan funds by check, you will be required to come to the MTSU Business Office to endorse the check. The MTSU Business Office will email you when your check is ready to be endorsed.

Because it can take up to 4 - 6 weeks for a Private Loan to be processed, we recommend you apply at least 7 weeks before the loan funds are required.

Loan forms 

Loan resources and services

Federal Student Aid
Federal Student Aid Direct Loan
Federal Direct Loan Master Promissory Note Electronic Signature 
Online Entrance Counseling
Online Exit Counseling
Loan Ombudsman
The National Student Loan Data System
Federal Student Loan Repayment Plans and Calculators
Direct Loan Consolidation
Public Service Loan Forgiveness
Teacher Loan Forgiveness
Loan Discharge