MCAD participates in the Federal Direct Loan Program for students. Nearly every need-based financial aid award at MCAD includes student loans. Because a college education is an investment in your future, you may need to take on a reasonable amount of debt to assist with this investment. You are encouraged to only borrow what you need and to seek outside scholarship and savings in order to reduce your student loan debt.
Loans are the last type of aid considered (after grants, scholarships, and student employment). They are considered self-help financial aid because you must repay the money borrowed.
There are three main types of educational loans:
- Federal Direct Stafford Loans*
- Federal Direct PLUS Loans*
- Alternative Loans
*Students must complete the FAFSA (Free Application for Federal Student Aid) each year to be considered for federal student and parent loan programs and for some alternative education loans.
Federal Direct Stafford Loans
All students completing the FAFSA are reviewed for and awarded a Federal Stafford Loan. Stafford Loans are included on the financial aid award letter because the loan does not require a credit check. The amount of the loan is determined by your grade level and eligibility.
Federal Direct PLUS Loan Program
The Federal PLUS Loan program is available to parents of dependent undergraduate students* and graduate degree students to borrow. Under this program, the U.S. Department of Education is the lender.
- Completion of the FAFSA is required to borrow the Federal PLUS Loan.
- To be approved for the loan, the borrower must not have an adverse credit history.
- The maximum loan amount is determined by subtracting all other financial aid from the cost of attendance at MCAD.
- The PLUS loan is not included on the financial aid award letter because additional steps are required to be approved to borrow the loan. Parents and graduate students of all income levels are eligible to apply for the loan.
Federal Parent PLUS Loans
- Federal Direct Parent PLUS Loans can be borrowed by a parent of a dependent undergraduate.* The parent borrower may be the student’s mother, father, or stepparent (if the stepparent’s income and assets were reported on the FAFSA) of the student.
- Eligible parents may borrow up to the cost of attendance minus any other aid received by the student.
- The loan is borrowed and repaid by the parent and cannot be transferred to the student.
- Loans start repayment sixty days after the loan is fully disbursed. Typically, the loan is borrowed for the school year so repayment begins sixty days after the loan disbursement is received for spring semester. Deferment of repayment is available upon request with the loan servicer as long as the student is enrolled at least half-time. Interest accrues during the deferment period.
If the Parent PLUS Loan application is denied, the MCAD Financial Aid Office is allowed to increase the Federal Direct Unsubsidized Loan funds by $4,000 to $5,000, depending on the student’s grade level.
*A dependent student is defined as not meeting any of the criteria for an independent student. An independent student is one of the following: at least twenty-four years old, married, a graduate student, a veteran, a member of the armed forces, an orphan, a ward of the court, someone with legal dependents other than a spouse, an emancipated minor, or someone who is homeless or at risk of becoming homeless.
Federal Grad PLUS Loans
- Federal Grad PLUS Loans can be borrowed by a student enrolled in MCAD’s master of fine arts and master of arts programs.
- Eligible graduate students may borrow up to the cost of attendance minus any other aid received.
Federal Grad PLUS Loans are placed into deferment while enrolled at least half-time and for an additional six months after the end of at least half-time enrollment. Typically this is upon graduation or withdrawal from MCAD. Interest accrues during the deferment period. Students always have the option to make payments while in school.
Alternative Education Loans
Loans that are not part of the Federal Student Aid program are often referred to as alternative, supplemental, or private loans. Alternative education loans are not guaranteed by the Federal Government and therefore are not included as options on the financial aid award letter.
Alternative Education Loans are offered by banks, credit unions, state programs, and other lending institutions to cover educational costs not paid by the financial aid award. The borrower (either student or parent) needs to complete the application process with those lending institutions each year they wish to borrow.These loans usually require a cosigner, have variable interest rates, and accrue interest from the time loan funds are disbursed.
It is highly recommended that students exhaust eligibility with federal loan programs before borrowing through an alternative education program.
More information about alternative loans, their costs, and a repayment calculator are available at FinAid.org.
To assist you in your search for an alternative loan, we have provided a list of alternative loan sources that MCAD students have utilized in the past three years. Please understand that you may select any lender for educational loans and that MCAD does not endorse or recommend any loan program listed. Students are not required to select a lender from this list.
Processing Tips for Alternative Loans
- Processing time to complete loan approval can take up to 3 weeks.
- Plan your annual financial needs and complete the loan process by July 1 for fall and spring semester.
- Complete loan applications by November 1 if attending or borrowing for spring semester only.
- Loans are set up to be disbursed half to each semester and money is received after semester enrollment is verified. Generally within the first fifteen days of the semester.