Loan Programs

Several loan programs are available. A student is not required to accept a loan in order to receive other types of aid. Students may consider replacing part of the value of a loan with a job. Contact Student Employment to determine whether employment is available.

Loans must be repaid. Repayment may take ten years or longer after leaving Central Michigan University. Students are urged to consider their ability to repay a loan, their future credit rating, and their potential indebtedness before accepting a loan. The staff of the OSFA are available to discuss the implications of loans on the student’s future financial situation.

Federal Stafford Direct Loan Program

Subsidized Loans. Subsidized loans are made to a student by the federal government and applied directly to the student’s account. These loans are based on need, and eligibility is determined by the OSFA. All applicants must file a FAFSA. Loan applications are not required. The student must log into their financial aid portal to take action on the offered loan(s); they may accept, reduce, or decline the loan(s). Loan(s) without action taken will not process.

Undergraduate students making satisfactory academic progress who carry at least six (6) semester hours may borrow up to $3,500 for the first year of undergraduate study, $4,500 for the sophomore year, and $5,500 for the junior and senior years of undergraduate study, depending on financial need. The subsidized loan aggregate maximum for undergraduate study is $23,000. Application is usually made for one semester or an academic year (9 months). Summer is the end of our academic year. Summer aid will be offered after you have registered for summer courses.

Repayment begins six months after ceasing to be enrolled at least half-time. Several repayment options are available; contact your federal servicer. Payment of principal may be deferred under certain conditions. Refer to your promissory notes for details.

Unsubsidized Student Loans. Provisions are the same as the Federal Direct Subsidized Loans, except that the loan is not based on need. The program is open to students who do not qualify for the Federal Direct Subsidized Loan or who do not qualify for the full amount. The student is responsible for the interest that accrues while enrolled in school. Dependent students who demonstrate financial need for a subsidized loan based on grade level may borrow up to $2,000 in an unsubsidized loan, not to exceed the cost of attendance. Independent students may borrow the Federal Direct Subsidized Loan limits as well as an additional Federal Direct Unsubsidized Loan up to $6,000 per year for freshmen and sophomores and up to $7,000 per year for other independent undergraduates, not to exceed the cost of attendance.

The aggregate maximum for undergraduate study is $31,000, which may be a combination of subsidized and unsubsidized loans. The aggregate maximum for an independent undergraduate student is $57,500.

Direct PLUS (Parent) Loans

The Federal Direct PLUS Loan program makes loans available to parents to pay for the costs of study at postsecondary schools. Under the program parents are eligible to borrow on behalf of dependent undergraduate students. Loan funds may be used only to pay for students’ educational costs. The maximum eligibility for a Federal PLUS equals the cost of attendance minus estimated financial aid for the loan period. All applicants must file a FAFSA for the student for whom they wish to borrow and complete the PLUS loan application online at https://studentaid.gov/. Processing will be initiated when the parent borrower provides requested information for the promissory note. Upon receipt of the signed promissory note, funds will be deposited to the student’s account. The federal servicer is required to check the credit worthiness of all Federal Direct PLUS Loans applicants.

Parents may choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half time and pay accruing interest monthly or quarterly, or allow interest to be capitalized quarterly. Interest begins to accumulate at the time the first disbursement is made. Parents may choose to repay both principal and interest while the student is in school or take advantage of deferring payments.

Loan Counseling

Entrance Interviews. Students who have applied for a Federal Direct Student Loan as a first-time borrower are required by federal regulations to complete an entrance interview before their loan funds may be applied to their accounts. Important information on loans, debt management, repayment options and consequences of default will be presented. Information regarding this mandatory session is found within the student’s financial aid portal. Loan entrance counseling is completed online at https://studentaid.gov/

Exit Interviews. Students who receive a Federal Direct Loan are required by federal regulations to complete a loan interview before graduating or withdrawing from the university. Important information regarding deferment and payment schedules will be discussed. Students are contacted electronically to complete on-line exit counseling at https://studentaid.gov/ During exit counseling CMU is required to obtain the following information from the borrower:

expected permanent address
name and address of the borrower’s expected employer
address of the borrower’s next of kin
any corrections to CMU’s records concerning name, address, social security number, references, and driver’s license number.

For Federal Direct loans, CMU is required to provide the above information to the federal servicer within 60 days of the exit counseling completion.

Loan Agreement (Master Promissory Note/MPN)

The Master Promissory Note is a legal document in which a borrower promises to your loans, accrued interest and fees. The MPN explains the terms and conditions of the loan. You may receive more than one loan under an MPN over a period of up to 10 years. The MPN is completed online at https://studentaid.gov/

Annual Student Loan Acknowledgment

Borrowers accepting a subsidized/unsubsidized loan or PLUS loan for parents may complete the acknowledgment every year. Borrowers acknowledge they understand their responsibility to repay loans. The acknowledgment is completed online at https://studentaid.gov/