Student Loans
Learn about federal loans and how to apply for them, borrowing limits, repayment plans, private loans, and responsible borrowing guidance.
Learn About Federal Direct Loans
When students complete the Free Application for Federal Student Aid (FAFSA), they are applying for federal grants, other need-based aid, and student Federal Direct Loans. The U.S. Department of Education’s federal student loan program provides all students that apply with a valid FAFSA the opportunity to borrow a yearly amount of loans in which the U.S. Department of Education is the lender. There are multiple types of Federal Direct Loans available:
Direct PLUS Loans
Direct PLUS Loans are loans made available to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required.
Direct Subsidized Loans
Direct Subsidized Loans are loans made available to eligible undergraduate students who demonstrate financial need. The interest on this loan is subsidized (paid for) by the federal government while the student is enrolled at least a half-time status.
Direct Unsubsidized Loans
Direct Unsubsidized Loans are loans made available to undergraduate, graduate, and professional students who complete a FAFSA. The loan’s interest is not subsidized (not paid for) by the federal government and will accrue while the student is enrolled. Eligibility is determined by the FAFSA and the Office of Financial Aid.
Students may borrow from $5,500 to $7,500 annually with low interest and deferred repayment. The maximum amount a student can borrow for undergraduate study is $31,000.
- First-year students can borrow up to $5,500 annually.
- Second-year students can borrow up to $6,500 annually.
- Third- and fourth-year students can borrow up to $7,500 annually.
Federal Direct Loan eligibility is determined by the college’s cost of attendance, expected family contribution, and other aid provided.
In addition to the FAFSA, first-time borrowers will need to also complete Student Loan Entrance Counseling and sign a Master Promissory Note.
Steps to Complete the Federal Direct Loan Process
Step 1: Submit the Free Application for Federal Student Aid (FAFSA).
Step 2: Accept, decline, or reduce the Federal Direct Loan(s) through the financial aid portal. Use the menu link to access the student’s financial aid offer. Muhlenberg College will never reduce or accept a loan on the student’s behalf.
Step 3: Complete Loan Entrance Counseling for an undergraduate student. Learn more about this step on our Loan Entrance Counseling page.
Step 4: Sign a Master Promissory Note for an undergraduate student. Learn more about this step on our Master Promissory Note page.
Step 5: Check the documents and messages link in the financial aid portal to verify that no other requirements or documents need to be submitted to the Office of Financial Aid.
Once your loan has been certified, the Department of Education will send you a disclosure statement in the mail. It will provide you with the loan disbursement amount and scheduled disbursement date.
Then, your loans will be ready for disbursement. They will be disbursed in two equal disbursements minus the origination fee. The first disbursement will be on the first day of the fall semester; the second disbursement will be on the first day of the spring semester. Any delay in the steps above can result in a delay in the disbursement of a student’s aid.
Alternative Student Loans and Payment Options
For many families, the question of how to pay for college is ultimately as important as where a student is going to college. Few families today can afford to pay for college out of discretionary income. Even after a financial aid package, the “how do I pay for the rest of it” question often looms large.
Muhlenberg offers several alternative financing options to make education more affordable:
- Alternative student loans are provided by private lenders, such as banks and credit unions. These loans can offer attractive interest rates and flexible repayment terms.
- Families can compare lenders through ElmSelect, a tool that can help identify reputable options.
- Families also have the option of starting a Muhlenberg College Monthly Payment Plan to help manage their cash flow while meeting educational costs.
Please keep in mind that if a student chooses to apply for an alternative loan they will be completing the application and providing any additional information for the loan to the lender they have chosen.
We hope you will take a moment to consider these financing options. You may find, as many families have, that they are very helpful in making the Muhlenberg educational experience affordable.
Contact the Office of Scholarships and Financial Aid
Please direct questions to finaid@muhlenberg.edu or 484-664-3175.