Understanding Your Financial Aid

A federal loan program 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.

• Federal Direct Subsidized Loan
  A Federal Direct Subsidized Loan is awarded based on your demonstrated financial need. The federal government pays interest on a subsidized loan, while you are enrolled in school at least half-time and during grace and other deferment periods. The interest rate for Federal Direct Subsidized loans disbursed on or after July 1, 2019 until June 30, 2020 is fixed at 4.53%.
• Federal Direct Unsubsidized Loans
  A Federal Direct Unsubsidized Loan is not based on your financial need. The interest rate for Federal Direct Unsubsidized Loans disbursed on or after July 1, 2019 until June 30, 2020 is fixed at 4.53%. 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 the loan 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.

Loan Limits

Annual Subsidized Limits

• First year undergraduates = $3,500
• Second year undergraduates = $4,500
• Remaining undergraduate years = $5,500
• Preparatory coursework 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 no longer eligible for Subsidized Loans for loan periods beginning on or after July 1, 2012.

Annual Unsubsidized Limits

• Dependent undergraduates whose parents can borrow PLUS = $2,000
• First and second year undergraduate dependent students whose parents cannot borrow PLUS and independent students = $6,000
• Remaining undergraduate years for dependent students whose parents cannot borrow PLUS and independent students = $7,000
• 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

Aggregate Limits

• Undergraduate dependent students = $31,000 (up to $23,000 may be subsidized)
• Undergraduate independent students and dependent students whose parents cannot borrow PLUS = $57,500 (up to $23,000 may be subsidized)
• Graduate students = $138,500 (up to $65,500 may be subsidized)

Steps to Apply

1. You must complete the FAFSA each year.
   To be eligible, you must be enrolled in a degree major for at least six credits per semester and maintain LBC’s 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 be disbursed. In most cases, you will only need to complete one MPN during your college career. E-sign your federal Direct loan MPN at studentloans.gov using your Federal Student Aid PIN by selecting Sign-In. After you sign in, choose Complete MPN and then select Subsidized/Unsubsidized. Follow the four-step process listed on the studentloans.gov website to sign your MPN.
3. Complete Loan Entrance Counseling
   If you are a first-time borrower of the Federal Direct Loan, you are required to complete Loan Entrance Counseling before the loan funds can be disburse. To take the counseling, select Entrance Loan Counseling on the studentloans.gov 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.

*Please note that this requirement is separate from e-signing the loan MPN.*

Fees

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

Receiving Federal Direct Loan Funds

It’s 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 a Loan

If you wish to reduce or cancel your loan(s), please go to the LBC Student Portal and choose Financial Aid Awards where you can reduce or cancel your loan.

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 studentloans.gov. 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

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.

When undergraduate students need funding beyond the Direct Subsidized/Unsubsidized Loans or Perkins Loan, parents may need to consider the PLUS Loan. LBC participates in the Direct Lending Program with the U.S. Department of Education. This program allows parents of dependent undergraduate students to borrow a Federal Direct Parent PLUS Loan to help pay for educational expenses.

• Borrow up to the total cost of attendance, minus all other sources of financial aid
• 7.08% fixed interest rate on loans disbursed on or after July 1, 2019 until June 30, 2020
• Required net fees of 4.292% deducted from each loan disbursement
• Option to defer repayment while student is enrolled in school
• Request Parent PLUS Loan Instructions & Request Form available to parents

Eligibility

A student must be enrolled at least half-time (six credits) in a degree major and meet all other eligibility requirements, which includes maintaining satisfactory academic progress.

• Parent borrower consents to a credit check by the U.S. Department of Education by submitting the Parent PLUS Loan Instructions & Request Form.
• Adverse credit typically results in a denied credit check.

Borrowing Limits

• Yearly borrowing limits are equal to your student’s estimated cost of attendance (tuition, fees, room and meals, books, transportation and supplies), minus other financial aid your student receives. Students can view their estimated cost of attendance through the Student Portal by choosing Financial Aid Awards.
• Loan term dates are fall only, spring only or fall/spring combined. Be sure to take the loan period into consideration when determining the amount to borrow.
• We recommend waiting until the student receives the tuition bill before applying for the Parent PLUS Loan.

Applying for Parent PLUS Loan

• Parent must e-sign the Parent PLUS loan by going to studentloans.gov
• Parent must sign with their Department of Education PIN number.
• Parent must select “Parent PLUS Loan” and complete the Master Promissory Note.

Credit Decisions

The U.S. Department of Education will mail the credit check results to the parent borrower and electronically transmit the results to LBC.

• Approved Parent PLUS Loans with a signed MPN appear in the student’s financial aid report on My Community
• Denied Parent PLUS Loans allow the student to borrow an additional amount of unsubsidized loan.
  • Borrowers have the option to either appeal the credit decision with the U.S. Department of Education or get an endorser for the loan.

Processing and Receipt of Funds

• Once the credit check is approved and a valid MPN is on file, the Parent PLUS loan funds will be applied toward payment of tuition and fees, room and board and other LBC charges on the student’s tuition bill.
• Borrowers that apply for a fall/spring combined loan period can expect the loan to be split in two equal installments.
• Loan decreases can be requested by contacting the LBC financial aid office at financialaid@lbc.edu or by calling 717.560.8254.
• Loan increases can be processed by completing the Parent PLUS Loan Instructions & Request Form on Account Center for only the additional amount needed.

Refunds

If a credit balance remains after all charges are paid in full on the tuition bill, the credit will be refunded to the parent borrower.

Repayment and Deferment

• Repayment begins 60 days after the final loan disbursement during the academic year. Parents have up to 10 years to repay the loan.
• Deferment allows parents to delay repayment until after their student is no longer enrolled at least half-time (six credits).
• Parents may request a deferment of each new Parent PLUS Loan by calling the Direct Loan Servicing Center toll-free at 800.848.0979. Parents may need to provide a copy of their student’s academic record to the center.

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 required 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 www.elmselect.com/#/. 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.