Federal Direct Loans

A federal student loan program under which eligible students and parents borrow directly from the U.S.Department of Education to help cover the cost of higher education. Direct Subsidized, Direct Unsubsidized and Direct PLUS Loans are types of Direct Loans. After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you are required to begin

Important Loan Details

For students interested in taking out a federal Direct Loan, complete the following steps:

Step 1 - FAFSA

Fill out the FAFSA and complete any required additional documentation.

Applying for Financial Aid/FAFSA

Step 2 - Complete Financial Aid file

Make certain that your financial aid file is complete.

    • High School/Prior College transcript(s) on file with MC Records Office
    • Verification (via Gateway Online Portal) completed if selected
      For details about Verification, visit the Applying for Financial Aid/FAFSA page.

Step 3 - Complete the MC Direct Loan Application

    1. Log into Financial Aid Portal
    2. Verify "Current Award Year" (top right corner)
    3. Click 'Menu' (top left corner)
    4. Select 'Loan Application'
    5. Select 'Direct Loan Application'
    6. Complete and Submit

Email confirmation will be sent upon receipt of application.

Financial Aid Portal

Step 4 - Entrance Counseling & Master Promissory note

Complete Entrance Counseling and sign your Master Promissory Note (MPN). 

Step 5 - Accept your loan award

    • Accept your loan award through your Financial Aid Portal
    • Designate your Direct Deposit option in MyMCPortal

Loan Application Deadlines

Loans will be disbursed after all of the above steps are completed.

Fall – October 31
Spring – March 31
Summer – July 1

Annual Direct Loan Limits for Undergraduate Students

Freshman (0-29 Hours)


$5,500 – no more than $3,500 in Subsidized


$9,500 – no more than $3,500 in Subsidized

Sophomore (30-59 Hours)


$6,500 – no more than $4,500 in Subsidized


$10,500 – no more than $4,500 in Subsidized

Junior/Seniors (60+ Hours)


$7,500 – no more than $5,500 in Subsidized


$12,500 – no more than $5,500 in Subsidized

*The loan limits for Juniors and Seniors will only be considered for students in the Bachelor of Applied Technology and Bachelor of Applied Science programs.

Aggregate Limits

The aggregate loan limits (maximum amounts) undergraduate students are allowed to take out:

Dependent Students - $31,000 – no more than $23,000 in Subsidized Loans
Independent Students - $57,500 – no more than $23,000 in Subsidized Loans

Interest Rates for Direct Loans

Interest rates and loan fees are determined by Congress and subject to change every academic year.

Loan Type

Disbursed between
7/1/2021 - 6/30/2022

Disbursed between
7/1/2022 - 6/30/2023

Direct Subsidized Loans



Direct Unsubsidized Loans



Direct Parent PLUS Loans



Loan Fees

Most federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted from each loan disbursement you will receive. This means the money you receive will be less than the amount you actually borrow. You are responsible for repaying the entire amount you borrowed and not just the amount you received.

Loan Type

First Disbursement Date

Loan Fee

Direct Subsidized and Unsubsidized Loans

Between 10/1/2020 and before 10/1/2023


Direct Parent PLUS Loans

Between 10/1/2020 and before 10/1/2023



Exit Counseling

  • Once a student withdraws from Midland College, drops below 6 hours minimum enrollment or graduates, they are required to complete an online Exit Counseling session. This counseling session is a great tool to help you understand the repayment options and what you can do if you are struggling to make payments.
  • If you do not complete the Exit Counseling in a timely fashion, a hold will be placed on your records at Midland College, including your transcripts. > Exit Counseling

Repayment of Loans

  • Begins 6 months after you have finished college or drop below the required 6 hours minimum enrollment. There is a 6-month grace period the government provided, which allows you to get on your feet and find a job. Interest will begin accruing during this time, but repayment of student loans will not begin until the end of this 6-month grace period.
  • During and after the 6-month grace period, servicers will begin contacting you regarding the repayment of you student loans through letters and phone calls. Do not ignore their attempts to communicate with you, as they most likely want to find out your preference for repayment options and verify that they have the correct contact information.

Federal Student Aid

Figure out how much you owe in federal student loans and who will service your loan. > Manage Loans

Standard Repayment

    • Fixed monthly payments of at least $50 until loan is paid in full (up to 10 years)
    • Loan is highest payment, repaid in shortest amount of time with the least interest paid

Graduated Repayment

    • Payments start low and increase every two years (for up to 10 years)
    • This plan is a good option if you expect your income to increase steadily over time
    • Amount due each month must cover interest

Extended Repayment

    • Fixed annual or graduated repayment (up to 25 years)
    • Must have a total amount of Direct Loans exceeding $30,000
    • More interest is paid due to the longer loan term
    • Loans must have been disbursed on or after October 7, 1998

Income-Based Repayment (IBR)

    • Payments are capped at the amount determined to be affordable based on your Adjusted Gross Income (AGI) and family size and are adjusted every year
    • In order to be initially eligible, you must have a Partial Financial Hardship, which is based on your total loan debt, AGI and family size
    • After you are no longer in Partial Financial Hardship status, payments will not be any higher than they would have been under a 10-year standard repayment schedule
    • Balance remaining after 25-year term is forgiven

Income-Contingent Repayment (ICR)

    • Payments are calculated based on AGI, family size and total Direct Loan debt and are adjusted annually
    • Any unpaid interest (due to payment amount) is capitalized annually, meaning that it is added to the principal balance
    • Remaining balance after 25-year term is forgiven

Pay as You Earn (PAYE)

    • You must be a new borrower with no outstanding loan balances as of October 1, 2007 and your federal student loan debt must be high, relative to your income
    • Monthly payments will be lower and if your payment amount does not cover the full amount of interest that accrues on your loans each month, the government will pay your unpaid accrued interest on subsidized loans for up to three consecutive years from the date you begin paying your loans under Pay As You Earn
    • Remaining balance will be forgiven after 20 years of qualifying repayment
    • You will more than likely pay more total interest over the life of the loan and you must submit annual documentation each year about income and family size

Revised Pay as You Earn (REPAYE)

    • Any Direct Loan borrower with an eligible loan type may choose this plan
    • You will more likely pay more total interest over the life of the loan  and you must submit annual documentation each year about income and family size
    • Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 or 25 years of qualifying repayment


A period when payment on the principal of a loan is postponed. After the grace period (the six months after graduating or dropping below half-time status) has expired, borrowers are entitled to a deferment if they meet regulatory requirements. Your eligibility for deferment depends on when the loan was made and the individual deferment’s requirements. Any unpaid interest will be capitalized (added to the principal balance) at the end of the deferment period, likely increasing the total balance and your monthly payments.

Common Types of Deferment

    • In-School Deferment
    • Unemployment Deferment
    • Economic Hardship Deferment
    • Military Deferment
    • Temporary Total Disability, Parental Leave


A borrower who is willing but unable to make payments and does not meet the qualifications for a deferment, may request a forbearance. Forbearance allows you to temporarily postpone your payment for a specified period of time. The forbearance will eliminate any delinquency that currently exists on the account, but won’t reverse any derogatory credit information previously reported. No fees are assessed for obtaining forbearance, but interest will continue to accrue on your loan during the forbearance period. Any unpaid interest will increase the amount that must be repaid and may result in an increased monthly payment amount.

Common Types of Forbearance

    • Hardship
    • Reduced Payment
    • Internship/Residency
    • Student Loan Debt Burden
    • Department of Defense Loan Repayment Program
    • Corporation for National and Community Service Loan Repayment Program/Hardship
  • The entire amount of your loan, including accrued interest and late fees, can become immediately due and payable, unless payments are placed in forbearance or deferment.
  • Delinquency and default will be reported to all national credit bureaus, making it difficult to buy a car, a home, lease an apartment, apply for a credit card, etc.
  • Legal action can be taken against you and you could possibly be responsible for all attorney fees and court costs.
  • A collection agency can be hired to collect the loan balance and you will be responsible for paying all collection costs.
  • Your wages and federal income tax return can be withheld (garnished) to pay the loan balance.
You will not be eligible for any other federal financial aid until your loan is in acceptable payment status.

Texas Higher Education Fair Lending Practices (pdf)

Private Loans

Students may have the option of taking out a private loan from a qualified lending company. These loans are not part of the federal government loan programs – they are credit-based and may require a cosigner.

  • Interest rates are variable and may depend on your credit rating or that of your cosigner.
  • Private loans are generally more expensive than federal guaranteed loans, so it is important to research which one suits your needs best and only take one out after all other options have been exhausted.
  • A student can borrow up to the cost of attendance minus other financial aid awarded for the loan period, which is certified by the school before the first disbursement is made. Cost of attendance budget is prorated based on your financial aid eligible hours of attendance.

Responsibilities of the borrower

To receive private education loan funds, the borrower must submit a self-certification form to the lender. Do not submit to Midland College.

Be sure to contact the lender to inquire about any additional requirements that may be needed before your loan funds can be disbursed.


  • If you have not already applied for federal and state financial aid, you are encouraged to do so by completing the FAFSA.
  • You may wish to delay your private loan until you receive your financial aid award notice because you could qualify to receive enough financial aid to replace the private loan you intend to borrow.
  • For more information about applying for financial aid at Midland College, (e.g., grants, federal direct loans, scholarships, and work study) visit the Financial Aid and Scholarships website.

Private Loan Self-Certification (pdf)

What are the differences between federal and private student loans? Federal student loans are made by the government, with terms and conditions that are set by law, and include many benefits (such as fixed interest rates and income-driven repayment plans) not typically offered with private loans.

Federal vs Private Loans Graphic (pdf)