BSC participates in the William D. Ford Federal Direct Loan Program providing federally insured, low-interest, long-term loans to students and/or their parents to help cover the costs of college. The Federal Government is the lender, not a bank or other lending institution, and makes the loan directly to the student and/or their parents through the school.
The school determines eligibility, calculates the loan amount, verifies submission of the electronic master promissory note & entrance counseling, and disburses the money. Once the loan is made, it is managed and collected by the U. S. Department of Education. A direct loan is money that is borrowed and must be repaid.
BSC offers 3 types of Federal Loans:
Federal Direct Loan - Subsidized
The Federal Direct Subsidized Loan is a need-based loan offered to the student. The annual limits for borrowing are:
1st year $3,500
2nd year $4,500
3rd year $5,500
4th year $5,500
If necessary, a student may borrow an additional $2, 000 unsubsidized loan.
There is an aggregate limit for undergraduate borrowing of $23,000 subsidized loan and combined aggregate limit for both loans of $31,000.
The interest rate for the Federal Stafford Subsidized Loan is 3.4% and does not accrue on the subsidized loan until repayment begins 6 months after graduation or upon termination of education.
The borrower is charged a 1.0% loan fee for student loans which is taken directly from the loan and used by the U.S. Department of Education to cover defaulted loans. For example, the $3,500 first year loan will net $3,466.
Federal Direct Loan - Unsubsidized
The Federal Stafford Unsubsidized Loan is a non-need-based loan offered to the student. The annual limits for borrowing are:
1st year $5,500
2nd year $6,500
3rd year $7,500
4th year $7,500
These annual loan limits reflect the combined amount that may be borrowed through the Federal Stafford Subsidized and Unsubsidized loans. A student may be offered a combination of the subsidized and unsubsidized loans.
Independent students may borrow $4,000 more per year in year 1 and 2, and $5,000 more per year in year 3 and 4.
There is an aggregate limit for undergraduate borrowing of $31,000, of which, only $23,000 may be subsidized.
The interest rate for the Federal Stafford unsubsidized Loan is 6.8% and begins to accrue as soon as the loan is disbursed.
The borrower is charged a 1.0% loan fee for student loans which is taken directly from the loan and used by the U.S. Department of Education to cover defaulted loans. For example, a $2,000 loan will net $1,980.
Federal Parent PLUS Loan
The Federal Parent PLUS Loan is a non-need-based loan offered to the parent of a student. The annual limit for borrowing is equal to the yearly cost of education less any other financial aid. The interest rate for the Parent PLUS Loan is 7.9%. Repayment begins 60 days after the full amount borrowed for a school year has been disbursed.
To request a PLUS loan and submit the required electronic promissory note (eMPN) go to www.studentloans.gov.
Acceptance or Rejection of Loans
Returning students who are offered a loan as part of their Financial Aid Award Letter, should accept or reject their loan offers in TheSIS. For new students, once deposited, you may accept or reject your loans in TheSIS, as well, or send an email to firstname.lastname@example.org asking the Financial Planning staff to accept or reject them on your behalf.
All Direct Loan or PLUS Loan borrowers must:
- Submit a FAFSA (Free Application for Federal Student Aid) for the academic year in which they wish to apply for a loan
- First-time Direct Loan borrowers complete loan entrance counseling at https://www.studentloans.gov
- Submit/sign an electronic Master Promissory Note (eMPN) at https://www.studentloans.gov
NOTE: Loan amounts are not credited to a student’s account until after loan entrance counseling has been completed and an eMPN is on file with the Dept. of Education.
Entrance Counseling and eMPN Instructions - This site provides the borrower with information regarding what is needed in order to complete entrance counseling and submit their respective eMPN (Direct or PLUS Loan)