Federal Direct Loans
The Federal Direct Loan Program provides loans to students to help pay college costs. The student is responsible for repayment, which begins six months after the student graduates or stops attending at least half-time.
Students must file the Free Application for Federal Student Aid (FAFSA) at https://studentaid.gov/ to be eligible for federal direct loans. Students must also enroll at least half-time — eight credits for undergraduate students and four credits for graduate students — and be making satisfactory academic progress.
Some students may be eligible for a direct subsidized loan, in which the government pays the interest while the student is in school; a direct unsubsidized loan, in which the interest is the responsibility of the borrower; or a combination of both. Interest accrues on the unsubsidized loan while the student is in school. The student may pay the interest while in school, or capitalize it and pay it along with the principal upon leaving school.
The 2022-23 interest rate for the Federal Direct Subsidized and Federal Direct Unsubsidized undergraduate loans is 4.99 percent.
New borrowers must complete online entrance counseling and electronically sign a master promissory note at studentaid.gov before funds can be disbursed. We encourage all students to complete these two action items as soon as possible before school begins.
After the electronic master promissory note and entrance counseling notifications have been received by Merrimack College, the net amount of the loan will be credited to the student’s account, half in each semester.
The federal government deducts an origination fee from the gross loan amount before forwarding the proceeds to the school. The Federal Direct Loan origination fee for loans disbursed through September 30, 2023 is 1.057%. The amount that a student may borrow depends on the number of earned credits.
Annual Direct Loan Limits
|Junior, Senior, Fifth-year||$7,500||$12,500|
Note: If your grade level changes in the middle of an academic year, and you wish to be considered for an increase in your loan, please contact our office.
Lifetime Direct Loan Limits
|Student Status||Subsidized||Total Limit|
Federal Direct Parent (PLUS) Loans
Due to time limits on credit approval, parents should wait until after July 1 to apply for a Parent PLUS loan.
Loan applications submitted prior to July 1 may not be processed and are subject to cancellation due to credit expiration. If a family’s Parent PLUS loan expires, the parent must reapply.
Please note: If you have submitted more than one Parent PLUS loan application for an academic year, or if you have been approved with an endorser, please contact our office to ensure proper processing.
The Parent PLUS loan is available to creditworthy parents of dependent undergraduate students, and is not based upon financial need. Parents may borrow up to the full cost of attendance, less any financial aid, annually for each dependent undergraduate student. The first step in applying for a Parent PLUS loan is to be sure that the student for whom a PLUS loan is being processed has filed the FAFSA. A completed FAFSA is required for all Parent PLUS applications.
The 2022-2023 interest rate for the Federal Direct Parent PLUS loan is 7.54 percent fixed. An origination fee is deducted from the loan before the funds are sent to the college. The origination fee for these loans disbursed through September 30, 2023 is 4.228%. Repayment begins 60 days after the final disbursement and is based on a 10-year repayment. The borrower may also contact the loan servicer to make interest-only payments, or defer payments until the student is no longer enrolled in school at least half-time.
Parents may apply for the Parent PLUS loan at studentaid.gov. Parents must electronically sign a master promissory note before the funds can be disbursed to the college. Parent PLUS must be evenly allocated over the course of the academic year, so the amount applied for will be automatically split in half for fall and spring semesters.
The recommended deadline for applying is at least 30 days prior to enrollment. Parents must apply using their social security number, date of birth and FSA User ID, and credit decision is determined by Direct Loan Applicant Services. Our office will receive electronic notification once your loan has been approved, and we will process all approved loans with a valid master promissory note. Once the loan is processed, students may view their financial aid or billing statement on myMack.
Students whose parents are denied a Parent PLUS loan become eligible for an additional Direct Unsubsidized Loan, in addition to their yearly annual award amount. For freshmen and sophomores, this is an additional $4,000; for juniors and seniors, this is an additional $5,000 for the year.
Students may contact the Office of Financial Aid for further instruction about requesting additional unsubsidized student loan funds as a result of a PLUS denial.
Federal Perkins Loans
Note: This program has been discontinued and new loans cannot be made as of Oct. 1, 2017.
Massachusetts No-Interest Loans
The Massachusetts No Interest Loan Program is a state-funded, no-interest, deferred loan offered to qualified Massachusetts residents. Repayment does not begin until six months after graduation. Loan amounts range from $1,000 to $4,000 per year. Students must file the FAFSA and have an expected family contribution range of $0 to $15,000. Funding is limited and is not guaranteed for renewal.