Student Loans

Federal Direct Student Loan Information

Federal Direct Loans
 
If you don't receive enough free money to pay for college and you aren't able to cover your costs with savings or other resources, there are Federal Direct student loans. 
 
These type of loans through the U.S. Department of Education will likely have lower interest rates. 
 
There are also Federal Direct loans for parents, enabling your parents or stepparents to borrow money to aid you in paying for the cost of your schooling.

Federal Direct Student Loans

Master Promissory Note

Students borrowing under the Federal Direct Student Loan Program are required to complete a Master Promissory Note before receiving loan proceeds.  This should be the very first step in applying for a loan through NMCC.  To complete an MPN, click the link above.
 
Students borrowing under the Federal Direct Student Loan Program are required to complete loan entrance counseling before receiving loan proceeds. 
 
Students are also required to complete the loan exit counseling when graduated, withdrawn or dropped below half-time enrollment.

Helpful Information

Subsidized Federal Direct Stafford loans are based solely on financial need. The federal government pays the interest while you’re in college at least half-time.  You’ll make no loan payments until your six-month grace period ends. To qualify, you must meet all the requirements for federal aid.

Unsubsidized Federal Direct Stafford loans are for all eligible students, regardless of income or assets. You must meet the same requirements as for the subsidized Federal Direct loan, except for demonstrating financial need. You’re responsible for paying all the interest on your loan, but you can defer payments while you’re in school at least half-time. If you do, the interest will be added to the amount you borrowed when repayment begins and future interest costs will be based on the higher loan amount. If you’re an independent student, you may be eligible to receive additional unsubsidized Federal Direct loans to help cover unmet financial need or replace some of your expected family contribution.
Federal Direct Parent PLUS loans enable your parents or stepparents (but not your legal guardians) to borrow up to the total cost of your undergraduate study, minus any other aid you may receive. These loans aren’t based on your family’s income or assets and require a credit check. You must be enrolled at least half time. In addition, some colleges may require you to submit the FAFSA first.
 
Origination Fees

There is a 4.292% (2014-15) origination fee that will be automatically deducted from the loan amount. 

Borrowers are better off when they borrow conservatively, budget wisely, and plan ahead to repay their student loans. Knowing the monthly payments for the amount you borrow is a great start to planning your financial future.  
 
You can use this repayment estimator from the Department of Education to determine your approximate monthly loan payment.  It allows you to either import your current student loan data or create a projection based on the amount you think you may borrow.  
In general, your student loan debt should not be more than 8 percent of your annual salary. The following chart ties income to estimated repayment amounts, demonstrating the amount of debt you may be able to afford based on your income. Use this chart to see if you fit within the recommended 8 percent. If you don’t meet these guidelines, you may want to contact your lender to discuss repayment options.

*Payments are based on a 10-year repayment term and 6.8 percent interest

Loan Debt/Annual Salary

Annual Salary   8% of Salary* Cumulative Debt
 $20,000  $133  $11,584
 $25,000  $167  $14,480
 $30,000  $200  $17,376
 $35,000  $233  $20,272
 $40,000  $267  $23,168
 $45,000  $300  $26,064
 $50,000  $333  $28,960
 $55,000  $367  $31,856
 $60,000  $400  $34,752
 $65,000  $433  $37,648
 $70,000  $467  $45,544
 $75,000  $500  $43,440
 $80,000  $533  $46,337
 $85,000  $567  $49,233
 $90,000  $600  $52,129
 $95,000  $633  $55,025
 $100,000  $667  $57,921
 $120,000  $800  $69,505


The Educational Opportunity Tax Credit (EOTC) can provide significant
state income tax savings for eligible Maine residents that graduated with
an associate’s or bachelor’s degree from an accredited Maine college or
university and continue to live and work in the state.
 
For more information, visit the website here:  www.opportunitymaine.org.