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Types of Loans

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Entrance/Exit Loan Counseling

  • Taking on a loan is a huge responsibility. Therefore it is pertinent that students must understand their rights and responsibilities regarding the repayment of these types of loans.  To accomplish this goal all students must complete  Loan Entrance Counseling prior to the first loan disbursement. Upon graduation, withdrawal, or enrollment of less than half-time, all students are required to complete Loan Exit Counseling.

Master Promissory Note (MPN)
The MPN is a promissory note that can be used to make one or more loans for one or more academic years (up to 10 years).

  • If you are a student borrower under the Direct Loan Program attending a school that is authorized and chooses to make multiple loans under the same MPN for more than one academic year, you will only sign one MPN. It will be used for all of your loans over multiple academic years. For example, if you enroll in college as a freshman and borrow under the Direct Loan Program for all years of study, you may be able to borrow under this one MPN for all years.
  • If you are a parent borrower under the Direct Loan Program whose child is attending a school that is authorized and chooses to make multiple loans under the same MPN for more than one academic year, you will only sign one MPN. It will be used for all of your loans over multiple academic years. For example, if your child enrolls in college as a freshman and borrows under the Direct Loan Program for all years of study, you may be able to borrow under this one MPN for all years.

Electronic MPN
The electronic MPN site allows you to complete and sign an MPN over the web as an alternative to using a paper MPN.

The process for completing an electronic MPN is simple. You will need to have your Department of Education issued PIN to begin the process. If you do not have your PIN, please visit the official PIN site.

You can begin the process by choosing Complete New MPN for Student Loans or Complete New MPN for Parent PLUS Loans.

Types of Direct Loans

Loans provide an opportunity for families to spread out college costs over a repayment period. Most student loans provide an opportunity for deferment of principal payment until after graduation or until the student ceases to be enrolled at least half time in a degree-seeking program. Most parent loans require payment while the student is in college.

There are a number of Direct loan programs which can help you meet your expenses at Bethune-Cookman. Education loans come in three major categories: student loans (for example, the Stafford Loan), parent loans (such as the Parent PLUS loan), and private student loans (also called alternative student loans).  To begin the process, students must complete the Free Application for Federal Student Aid (FAFSA) application, which determines the eligibility for student loans. The student is always the applicant/borrower, and annual maximum loan amounts apply.

Federal Direct Stafford Loans

The main federal loan for students is called the Stafford Loan and has two variations.

Federal Direct Loan Stafford Master Promissory Note

Federal Direct Loan Stafford Application & Master Promissory Note.

  • Federal Direct Student Loan Program (FDSLP) loans administered by the university are provided by the US government directly to students and their parents.

There are two types of Stafford Loans:

  • Stafford Direct Subsidized Loan

This is a low-interest loan made to students by the federal government "directly". Eligibility for a "subsidized" Federal Stafford Loan is based on financial need as determined by a federally mandated formula. "Subsidized" means that the federal government will pay the interest on the loan while a student is in school and during specified deferments.

Eligible freshmen may borrow up to $3,500 per year, sophomores up to 4,500; and juniors and seniors may borrow up to $5,500 per year. The maximum allowable undergraduate indebtedness is $23,000.

Stafford Loans have a fixed interest rate of 5.6% for loans with a first disbursement after July 1, 2009 through June 30, 2010. This rate usually changes yearly on July 1 of each year.

Federal Direct Stafford Loans are disbursed in two installments: one in the fall semester and one in the spring semester, after enrollment for each semester. When the loan is disbursed, federally required origination fee (which is used to offset administrative costs of the program) is DEDUCTED from the loan by the government or lender.  For example, a loan of $3,500 is disbursed in two installments of $1,733 each, totaling $3,466 after the fees are deducted.

Repayment begins six months after the borrower's last enrollment on at least a half-time basis.

  • Stafford Direct Unsubsidized Loan

The Higher Education Amendments of 1992 created a new program offering "unsubsidized" Federal Stafford Loans to students who do not qualify in whole or in part for "subsidized" Federal Stafford Loans.

A Federal Direct Stafford Unsubsidized Loan is a low interest loan made to students by the Federal government "directly". Under this program, the student borrower (and not the Federal government) pays the interest that accrues on the loan while the student is in school. Eligibility for a Federal Stafford Unsubsidized loan is determined by the Financial Aid Office using a federally mandated formula.

Eligible dependent freshmen may borrow up to $3,500 per year, sophomores up to $4,500; juniors and seniors may borrow up to $5,500 per year, less any amount of subsidized Stafford Loan eligibility. A student who shows need for only part of an annual subsidized Federal Direct/Stafford Loan may borrow the remainder through an unsubsidized loan. The maximum allowable loan indebtedness for an undergraduate student is $31,000.

Federal Direct Stafford Subsidized Loans have a fixed interest rate of 3.4% and Unsubsidized loans have a fixed interest rate of 6.8% effective 07/01/2012 with the first disbursement made after 07/01/2012.

Federal Direct Stafford Loans are disbursed in two installments: one in the fall semester and one in the spring semester after enrollment for each semester. When the loan is disbursed, federally required loan fees (used to offset administrative costs of the program) are DEDUCTED from the loan by the government or lender.  For example, a loan of $3,500 is disbursed in two installments of $1,733 each, totaling $3,466 after the fees are deducted.

Federal Direct PLUS Loan (Parent's Loan)

Federal Direct Parent PLUS Loan Program

The Federal Direct PLUS Loan is a federally insured loan made by private lenders or "directly" by the federal government. Repayment of principal and interest begins 60 days after the loan proceeds have been disbursed. Eligibility for this loan is based on credit-worthiness as determined by the lender.

The interest rate for the Federal Direct PLUS Loan is fixed at 7.9.

Federal Direct PLUS Loans are disbursed to the college in two installments: one in the fall semester and one in the spring semester, after enrollment for each semester. When the loan is disbursed, federally required loan fees of 4% (used to offset administrative costs of the program) are deducted from the loan by the government or lender. Parents of dependent students may borrow up to the cost of education minus any financial aid. These loans, in combination with all other aid (including loans) may not exceed the educational cost. Financial need is not an eligibility factor.

In the event that a Parent is denied for a Federal Direct PLUS loan for their dependent student, the student then becomes eligible to accept the additional Direct Unsubsidized Stafford loan based on the grade level of the student at the time and within the financial aid award limits.

Aggregate Direct Stafford loan limits are the maximum amount you can take out in student loans.

Dependent Undergraduate students are eligible for up to 31,000 in a combination of Stafford Subsidized and Unsubsidized loans with no more than 23,000 of that in Subsidized loan funds.

Independent Undergraduate students are eligible for up to 57,500 in a combination of Stafford Subsidized and Unsubsidized loans with no more than 23,000 of that in Subsidized loan funds.

Graduate students are eligible for up to 138,000 in Unsubsidized loans.

Private loans
Private loans help bridge the remaining amount of funds needed for your education. A separate application is required directly with the lender. Below are a few lenders you and your Parent may want to consider.

www.salliemae.com (SMART loan)                                        1-888-272-5543
www.discoverstudentloans.com                                            1-877-728-3030
www.pnconcampus.com                                                       1-800-762-1001
www.53.com (Fifth Third Bank)                                             1-800-222-7192
www.wellsfargo.com/student                                                1-800-378-5526

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Julianne Malveaux to Keynote B-CU Commencement on May 14

Thought leader, author and noted economist Julianne Malveaux will be the keynote speaker at the Bethune-Cookman University spring commencement. The ceremony will be held at 2 p.m., Wednesday, May 14 in the Ocean Center.

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