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FVCC Home >  Admissions >  Financial Aid >  Types of Aid >  Loans

Federal Direct Loans are one type of financial aid that are offered to students.  

There are two types of Direct loans that a student may be eligible for.  The Federal Subsidized Direct Loans are loans available to student with financial need.  Subsidized loans are also loans that the government pays the interest on the loan while the student is enrolled at least half-time and during the grace period.  For subsidized loans disbursed on or after July 1, 2006 the interest rate is fixed at 6.8%.  For subsidized loans disbursed on or after July 1, 2008 the interest rate is fixed at 6.0%.The second type of loan is a Federal Unsubsidized Direct Loan.  The Unsubsidized Direct loan is a non-need based program for those students who are ineligible for any, or all, of the Subsidized loan. The major difference between the Federal Subsidized Direct Loan and the Unsubsidized Direct Loan is interest begins accruing immediately upon disbursement of the Unsubsidized loan. The interest can be capitalized (added to the principle of the loan, thereby accruing interest on interest), or can be paid quarterly by the student. Paying the interest is recommended.  The current interest rate for Unsubsidized loans are fixed at 6.8%.For both Subsidized and Unsubsidized loans:

• There is a six month grace period before beginning repayment once the student graduates or stops attending at least half-time (6 credits).  So if a student decides to take a semester off, he/she could be required to begin making loan payments before returning to school at least half-time.
• Origination and default fees of 3% of the loan amount may be taken from the disbursement.  However, most lenders in the state of Montana waive these fees for students.
• The student must sign a Master Promissory Note (MPN) before loan funds will be disbursed. Signing the MPN can be done electronically.
• All first-time borrowers at FVCC must complete entrance loan counseling.  This is a detailed session that goes over the rights and responsibilities of borrowing a student loan, as well as the disbursement process at FVCC.
• The student must choose a lender (bank or credit union) for the loan.
• Aggregate Loan Limits: The maximum outstanding total subsidized and unsubsidized limits for a dependent student is $23,000. The maximum for an independent student or a dependent student whose parents do not qualify for a PLUS Loan is $46,000, of which no more than $23,000 can be in the form of subsidized loans.

The PLUS loan is a loan that parents can apply for to assist with covering the Cost of Attendance.  This loan is specifically for parents of undergraduate “dependent” students.  A parent can borrow the Cost of Attendance minus the student’s total financial aid package.  A credit check will be performed on the parent that wished to take out the PLUS loan.  The parent must have a positive credit rating to be approved for the PLUS loan (if the PLUS loan is denied, then the student has access to an additional Unsubsidized Loan).  For loans disbursed on or after July 1, 2006 the interest rate is 8.5%.  There is a 4% default and origination fee deducted from the disbursement.  This loan is not automatically awarded.  If a student is interested in being packaged with a PLUS loan, they should contact the financial aid office at FVCC directly to start the process.