Federal Direct Loans are loaned to you from the federal government. An administrative fee may be taken from the amount of the loan before the funds are disbursed. The maximum yearly amounts for base loans are set by the federal government and based on class rank. To be considered a second year student, you must have completed at least 45 credits that are applicable to your major. Base loans may be either subsidized, unsubsidized, or a combination of the two, depending on the student's established unmet need.
Below are the annual maximums for Direct Loans. Depending upon the amount of room
a student has under the Cost of Attendance, students may or may not be able to receive these full amounts. Your total financial
aid package cannot exceed your Cost of Attendance, which is prorated by term.
|Independent Students||Dependent Students|
|1st Year Base Loan||$3500||$3500|
|2nd Year Base Loan||$4500||$4500|
The Subsidized Direct Loan is need-based, with the government paying the interest on the loan while you are enrolled. The Unsubsidized Direct Loan is non-need based; you will be responsible for paying the interest while you are enrolled. You may choose to defer the interest by having it added to the principal; this is called capitalization. Subsidized loans disbursed during the 2020-21 academic year have a fixed interest rate of 2.75%. Unsubsidized loans also have a fixed interest rate of 2.75%. You must be enrolled at least half time, and repayment begins six months after graduation or withdrawal.
Borrowers are required to complete online Entrance Counseling and a Master Promissory Note (MPN) prior to receiving the loan funds. Entrance Counseling and MPN information is available from the LBCC Financial Aid Office. Students who have already been awarded financial aid and accepted their loans on their WebRunner account will receive an e-mail with the Entrance Counseling and MPN information.
A new limit on eligibility for Direct Subsidized Loans for new borrowers on or after July 1, 2013 was implemented effective July 1, 2013. New borrowers who begin their college enrollment on or after July 1, 2013 will not have access to subsidized loan funds beyond 150% of the credits required for their degree or certificate program.
For Subsidized Direct Loans, interest will not accrue while you are attending at least half time. However, interest subsidies during the six month grace period were eliminated for new subsidized loans made on or after July 1, 2012.
New borrowers at LBCC are subject to a federally mandated 30 day delay, meaning they cannot receive loan funds until after 30 days during their first term of enrollment. Loans during subsequent terms may disburse at the regular time.