Financial Aid - Seminary & Graduate Student Loans

Understanding Student Loans

Because grants and scholarships are limited, many students must rely on loans to cover at least some portion of college costs. Graduate students may borrow money for education. In fact, approximately 80% of Capital’s aid recipients borrow educational loans.

The following steps represent borrowing options, beginning with the best value and proceeding to other, less favorable loan options based on interest rates, loan terms and conditions, and repayment options. These loan options may be used alone or in combination with each other.

We are committed to providing students and their families with the best information regarding student borrowing.  For that reason, we have adopted a Student Lending Code of Conduct.

Federal Direct Loans

A federal loan program which is available to all students.

Federal direct loans are available to eligible students who complete the Free Application for Federal Student Aid (FAFSA). This federal student aid is made available through the William D. Ford Federal Direct Loan Program to help pay for educational expenses. The financial aid office awards a Direct Subsidized or Direct Unsubsidized Loan, or a combination of both loans, based on financial need.

The information you report on your FAFSA is used to determine your Expected Family Contribution (EFC), which is a calculated formula established by law. Your EFC is not equal to the amount you and your family must pay, but rather an index that allows colleges to determine financial need. To determine your financial need, your EFC is subtracted from your cost of attendance.

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Loan Types

  • Federal Direct Subsidized Loan. Graduate students are not eligible for subsidized loans. 
  • Federal Direct Unsubsidized Loans. A federal direct unsubsidized loan is not based on your financial need. The interest rate for unsubsidized loans disbursed on or after July 1, 2018 until June 30, 2019 is fixed at 6.6%. You are not required to pay the interest on this loan while in school, but we recommend that you do. You will be charged interest starting at disbursement until it is paid in full. If the interest accumulates, it will be added to the principal amount of the loan and increase the amount to be repaid.
  • Federal Direct Grad Plus Loan. This is an additional loan if more funds are needed. Students must be credit worthy. The interest rate for Grad Plus Loans disbursed on or after July 1, 2018 until June 30, 2019 is fixed at 7.6%.
  • Additional loans and grants may be available to you. We recommend visiting the following sites:

Loan Limits

Annual Subsidized Limits

  • Preparatory course work needed to enroll in graduate program if student has a baccalaureate = $5,500
  • Teacher Certification if student has a baccalaureate = $5,500
Note: Graduate students not eligible for Subsidized Loans for loan periods beginning on or after July 1, 2012.

Annual Unsubsidized Limits

  • Preparatory coursework needed to enroll in graduate program if student has baccalaureate = $7,000
  • Teacher Certification if student has a baccalaureate = $7,000
  • Graduate students = $20,500 or up to cost of attendance if less than $20,500

Aggregate Limits

  • Graduate students = $138,500 (up to $65,500 may be subsidized)

Private Education Alternative Loans

Private Education Alternative loans are private loans (not part of the federal government programs) that are obtained through a lending institution.

Give yourself credit! Credit scoring is calculated using many pieces of your past bill payment history. The way you managed credit in the past is often a good indication of how you will manage credit in the future. Lenders use credit scores to make fast and objective decisions on which applicants are likely to repay their loans on time.

What should I look for in an alternative loan?

• Annual Percentage Rate (APR) - What is the annual cost of the loan, including interest and the effect of any fees and charges?

• Pre-approval - Does the lender offer an opportunity to find out quickly if you qualify?

• Repayment Period - How long is the time allotted to repay the loan?

• Electronic Signature - Can the federal application be completed online with an electronic signature?

• Repayment - When does repayment begin and what are the options for repayment.

• Cosigner Release - Is a cosigner requried and does the lender offer a cosigner release option if you make a required number of on-time payments?

• Repayment Incentives - Does the lender offer any rewards or incentives for on-time payments?

• Loan Cancellation Features - Does the lender offer cancellation of the loan in case of death or permanent disability?

• Loan Limits - Is there a loan limit and will the limit meet your needs?

• Interest Capitalization - When is the interest added to your principle balance?

• Servicer - Does the lender service its own loans?

Is a private loan the right option for you?

At LBC, we think it's important to factor Christ into any decision. Deciding how to finance your college education is an important decision. You should consider all of the factors that are important to you. Paying for your education is a life-long investment.

For more information, go to On this site, you can find a list of lenders that offer private loans. Please note that you are free to select whoever you wish. This is only a partial listing of lenders that other LBC students have used. Note: A FAFSA is not required to apply for an alternative loan.

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An origination fee of 1.073% will be deducted from the gross amount of loan borrowed, so you need to take that into consideration when determining the amount you need to borrow. 

Receiving Funds

It is important to know that loan funds will automatically credit to your student account if the Direct Loan Processor has a valid MPN on file for you, and you have completed loan entrance counseling. After you have completed your registration and semester classes begin, your student financial aid will begin to disburse into your student account.

Reduce or Decline Loan

If you wish to reduce or cancel your loan(s), please login to mycommunity, and click on Financial Aid Awards.

Application Process

  1. To apply for a federal direct loan, you must complete the FAFSA each year. To be eligible, you must be enrolled in a degree program for at least six (6) credits per semester and maintain satisfactory academic progress standards.
  2. E-sign your Federal Direct (subsidized or unsubsidized) Loan Master Promissory Note (MPN). If you are a first-time borrower of the federal direct loan, you will be required to complete a Master Promissory Note (MPN) before the loan funds can disburse. In most cases, you will only need to complete one MPN during your college career.

    E-sign your federal direct loan MPN at using your Federal Student Aid PIN.
    • Select Sign-In.
    • After you sign in, choose Complete MPN.
    • Select Subsidized/Unsubsidized.
    • Follow the four-step process listed on the website to sign your MPN.
  3. If you are a first-time borrower of the federal direct loan, you are also required to complete loan entrance counseling before the loan funds can disburse. Complete this required counseling session by selecting Entrance Loan Counseling on the website. This counseling session provides you with information that will help you understand your rights and responsibilities as a loan borrower, as well as other tools to assist you with managing your loans.

    Note: This requirement is separate from e-signing the loan MPN.*

Student Loan Repayment and Disputes

Students and parents who borrow Federal Direct Loans will repay their loans to a Federal Loan Servicer. Students are required to participate in Entrance Loan Counseling prior to their first disbursement of a federal student loan, and will be notified of the requirement to complete Exit Loan Counseling at the time of withdrawal or graduation. Exit Loan Counseling will inform students of their Federal Loan Servicer. This information is also available to students and parents at any point during their education on the National Student Loan Data System.

Detailed information about federal student loans, repayment and deferment is found at Students are also encouraged to contact their LBC Financial Aid Advisor with any questions.

If issues arise during student loan repayment that cannot be resolved with the Federal Loan Servicer, students or parents may contact the FSA Student Loan Ombudsman Group. The Federal Student Aid Ombudsman Group of the U.S. Department of Education is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, Guaranteed Student Loans, and Perkins Loans. The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans.

FSA Student Loan Ombudsman Group Contact Information: 

FSA website

Phone: 877.557.2575   |    Fax: 606.396.4821

Mail: FSA Ombudsman Group
PO Box 1843, Monticello, KY 42633

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Lancaster Bible College|Capital Seminary & Graduate School is an equal opportunity institution that does not discriminate on the basis of race, color, sex (except where sex is a bona fide occupational qualification), ancestry, national origin, age, disability, veteran status, or genetic information. This policy applies to all terms and conditions of employment, admission to and enrollment with the College.