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MIAD participates in Federal and non-federal loan programs. Loans are a primary source for students and families to help meet the cost of education. The Federal Stafford Loan Program is the main source of loans used by MIAD students. Families also utilize the Parent Loan for Undergraduate Students (PLUS); a federal loan applied for by parents of an eligible students. Students and families also participate in alternative/non-federal private loans. Federal rules and individual lending institutions govern these loans. Loans are monies that have to be paid back. Subsidized Federal Stafford Loan
Stafford loan eligibility is based on financial need as determined by the needs analysis process. Maximum loan amounts per academic year are $3500 for foundations students, $4500 for sophomores, and $5500 for juniors and seniors. Loan limits are based on the student’s class year standing at MIAD. The maximum total limit for undergraduate study is $23,000. Students usually apply for a Federal Stafford loan for an academic year (two semesters.) One-half of the total loan amount will be disbursed each semester. Funds are automatically credited to the student’s account in the MIAD Business Office. The federal government pays the loan interest while the student is enrolled at least half time, and during a six month grace period after the student leaves school. The interest rate is 6.8% in 2007-2008. The minimum monthly payment if $50, with up to ten years to repay the loan. Deferments, loan consolidation, and refinancing options are available. Unsubsidized Federal Stafford Loan
This is a federal loan for students who do not qualify for a Subsidized Federal Stafford Loan. Eligibility for this loan is not based on financial need or family income. “Unsubsidized” means that the federal government does not pay the interest on the loan. Students are charged interest while they are enrolled in school. Unsubsidized Stafford loans have the same loan terms as the Subsidized Federal Stafford Loans (interest rate, monthly payments, deferments, etc.) Federal PLUS (Parent) Loan
"PLUS" stands for Parent Loan for Undergraduate Students. This is a federal loan for parents of dependent students. Eligibility for this loan is not based on financial need or family income. Parents applying for a PLUS Loan undergo a credit check. The loan amount is determined and approved by the financial aid office. The interest rate is 8.5% for 2007-2008. Repayment begins within 60 days of disbursement. Alternative Loan Programs
MIAD participates in a wide variety of non-federal loan programs. Alternative loans are private loans through a lending institution that are not part of the federal government programs. Alternative loans are more expensive than federal government guaranteed loans and should only be used when all other options have been exhausted. Research all possibilities for scholarships, grants, work study, and federal loan programs before borrowing from an alternative loan program. You can only borrow what it costs to attend MIAD (tuition, housing, food, and supplies) minus any other financial aid you are receiving. The amount borrowed must be approved and certified by MIAD Staff. MIAD financial aid staff will help you determine the amount of your alternative loan. Also, alternative loans have yearly limits set by the participating banks. All alternative loans require students to have a cosigner. Students are the borrowers with the cosigner taking responsibility if the student does not pay the loan. Cosigners are usually parents or other close relatives. Lenders for alternative loans all use credit checks/scores to make fast and objective decisions on which MIAD students are likely to repay their loans on time. Credit scoring is calculated using many pieces of your bill payment history (number and types of accounts, late payments, outstanding debt, and the age of your accounts). The way you and your family have handled credit in the past is often a good indication of how you will manage credit in the future. Therefore your credit score is like a snapshot of your level of credit risk at a particular point in time: when your credit information changes, so does your credit score. Please contact the MIAD Financial Aid Office for any further information.
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