Loans

A loan is borrowed money that you must repay with interest. You must receive a financial aid award letter from MCTC for the appropriate term in order to apply for Stafford loans. The award letter will inform you if you're eligible for a federal Stafford student loan, which is a loan, not a grant. Before you borrow, make sure you:

Can afford the monthly payment
Can repay the funds you borrow and any fees associated with the loan
Can repay any interest that accrues on the loan

All fees are deducted from your loan prior to disbursement; however, you remain responsible for repaying the entire loan amount.

Loan eligibility requirements

To be eligible for a loan, you must complete student loan entrance counseling before any loan application will be processed. In addition, you must:

Have your Pell Grant eligibility determined.
Be registered for and complete a minimum of six credit hours during each term of the loan period.
Be registered for at least six credits at the time your loan is certified and disbursed by MCTC.
Declare a major and be enrolled in a degree or certificate program at MCTC.
Maintain satisfactory academic progress.
Complete EXIT counseling upon leaving MCTC.

Choosing a lender

While MCTC does not endorse any specific lenders, we have compiled a list of experienced lenders who are committed to providing efficient service to our students. We suggest that you choose a lender from this list.

Keep the following points in mind:

If you are a prior borrower at MCTC it is best to use the same lender.
Federal guidelines regulate the primary features of the student loan programs. Some lenders however, offer special incentives for borrowers, such as a reduction in up-front fees or a reduction of the interest rate during repayment.
It is not necessary to have a prior relationship with a lender for a student loan.
You need to contact the Financial Aid Office if you use a lender that does not use Great Lakes Servicing.

MCTC's experienced lenders list

Minneapolis Community and Technical College does not endorse any specific lender; however, we do encourage students and parents to choose an experienced lender that is committed to providing efficient and ongoing service. The experienced lenders list is used as a guide to help students and parents compare/contrast different lenders so that they can choose the repayment options that will provide them with the best benefits.

Criteria used to establish list

The following is a list of criteria MCTC uses when determining if a lender should be added to the experienced lenders list.

Does the lender:

Use Great Lakes as its guarantee agency?
Provide comparable benefits to the students (fees, repayment options, interest rate reduction for on-time payments, etc)?
Provide support and services for the students and the college?
Sell the loans before the end of the loan period?
Have experience in the industry and have they established themselves as a reliable entity?

MCTC uses Great Lakes Higher Education Corporation as our guarantee agency because they are a recognized leader in the student loan industry and one of the largest national guarantors and servicers of student loans. Great Lakes provides industry-leading services throughout the complete life of a loan. These services, which include loan guarantee, origination, disbursement, and servicing, are each offered in a seamless manner to minimize confusion and cost to the student.

Minneapolis Community and Technical College does not receive financial incentives from any lender as enticement to be placed on the experienced lenders list. The decision is based on the performance of the lender and the incentives given to the students.

Know your limits: maximum and aggregate loan limits

Maximum loan limits

Annual Loan Limits are based on whether you are an Independent or Dependent student and the amount of credits you've earned at MCTC, plus any accepted transfer credits. The transfer credits must be on your student record to count toward your grade level.

Grade	Federal Stafford: Dependent and Independent Students	Unsubsidized Stafford: Dependent Students	Unsubsidized Stafford: Independent Students
Grade 1 (less than 30 credits earned)	$3,500	$3,500*	$7,500*
Grade 2 (30 or more credits earned)	$4,500	$4,500*	$8,500*

*less total Subsidized Stafford for same enrollment period

Aggregate loan limits

Aggregate loan limits are the maximum amount of Stafford Loans that an undergraduate student may take out in their lifetime.

Dependent student: $23,000 – total of all Federal Subsidized Stafford and Unsubsidized Stafford loans.
Independent Student: $46,000 – total of all Federal Subsidized Stafford and Unsubsidized Stafford loans.

What you should know: repaying your loan

Your grace period to repay

After you graduate, leave school or drop below half time, you will have a six-month grace period before payments are due. There is only one grace period per loan. During the grace period:

The government will pay the interest on any Subsidized Federal Stafford loans.
The borrower is responsible for all interest on any Unsubsidized Federal Stafford loans.

Repayment starts at the end of the six-month grace period. The normal repayment time of Stafford loans is ten years and the minimum monthly payment is $50. You can contact your lender for more information about repayment.

Deferring the repayment of your loan

If you are returning to school and have prior loans that are in repayment, you could be eligible for a deferment. This means that:

While you are in school at least half time, the principal payments for your Stafford loans will be deferred (no payments will be due).
The government will pay the interest on any subsidized loans, but the borrower is still responsible for interest payments on unsubsidized loans.
The interest that is earned on an unsubsidized loan can be paid by the borrower while in school or in deferment.
If the borrower chooses not to pay the interest while in school, the interest will be capitalized (added to principal balance of loan).

Please contact your lender or service for more information about deferments.

Differences between loans

There are three different types of loans:

Stafford Loan
Student Educational Loan Fund (SELF Loan)
PLUS Loan

A federal Stafford loan is a loan, not a grant. PLUS Loans enable parents to borrow money to help pay for college for their dependent student who is enrolled at MCTC for at least six credits. The SELF loan is a low interest educational loan offered by the Minnesota Higher Education Services Office.

Stafford Loan

A federal Stafford loan is a loan, not a grant. To apply for a Stafford loan, you must first have received a financial aid award letter, which indicates your eligibility for federal Stafford student loans, from MCTC for the appropriate term. Here are a few key points to keep in mind before you borrow:

Make sure you can afford the monthly payment.
You must repay the funds you borrow, any fees associated with the loan, and any interest that accrues on the loan.
All fees are deducted from your loan prior to disbursement; however, you may remain responsible for repaying the entire loan amount.

Loan disbursements

No loan proceeds are disbursed prior to the eighth day of the term.
A Stafford loan is subject to multiple disbursements, meaning that the amount you borrow will be split evenly and given to you in two separate payments.
If your loan period is for fall and spring terms, two disbursements will be issued (one for each term) and each will be for one-half of your total loan.
If your loan period is just one term, you will receive half your loan at the beginning of that term and the second halfway through the term.
If you are a first year student and this is your first loan, the first half of your loan cannot be disbursed until 30 days into the term.

Apply for a Stafford loan

Student Educational Loan Fund (SELF Loan)

The SELF loan is a low interest educational loan offered by the Minnesota Higher Education Services Office. It is designed to provide an additional funding source for students who have educational expenses exceeding other sources of federal/state aid. Before applying for the loan, you must first receive a current award letter from MCTC and complete the FAFSA application. Here are other key points to consider:

There is a maximum annual loan limit of $7,500 and a minimum of $500 for the freshman and sophomore grade levels.
It requires a credit-worthy co-signer who is a U.S. citizen and the borrower must be enrolled for at least six credits.
Borrowers are required to make quarterly interest payments while in school.
After graduating or leaving school, you are required to pay the monthly interest for up to three years. Then, you will begin repaying the loan principal as well as interest monthly (repayment period is seven to nine years).

Apply for a SELF loan

PLUS Loan

PLUS Loans enable parents to borrow money to help pay for college for their dependent student who is enrolled at MCTC for at least six credits. To apply for a PLUS Loan, students must have completed the FAFSA application and received a current award letter from MCTC. The annual limit on this loan is equal to the cost of attendance, minus any other financial aid the student has received. To be eligible for a PLUS Loan:

Parents are required to pass a credit check.
If a parent doesn't pass the credit check but can demonstrate that extenuating circumstances exist, you may qualify for a loan.
Parents and students also must meet other general eligibility requirements for federal and student financial aid.

In addition, the PLUS Loan:

Has a variable interest rate, but does not exceed nine percent. Interest begins to accumulate at the time the first disbursement is made.
Requires a first loan payment within 60 days after the final loan disbursement (for the period of enrollment in which you borrowed).
Doesn't include a grace period.
Requires parents to repay both the principal and interest while their student is still in school.
Requires the lender to send the loan funds to MCTC. (When the lender sends a paper check to the school, you will need to come to Business Services to endorse the check.)
Is disbursed in two installments.
Will first pay any outstanding charges owed to MCTC for the student. If any loan money remains, the student will receive the amount as a check unless the parent indicates they want any excess funds to be sent to the parent. This will cause a delay in the disbursement of excess funds. Any remaining loan money must be used for educational expenses.

Apply for a PLUS loan

Financial aid