Education loans are a form of financial aid that must be repaid with interest. Eligibility may be based on tuition costs and financial need for the loan. Student loans can come from the federal government, referred to as federal student loan, and is determined by completing a FAFSA.

Federal Direct Loans

Federal Direct Loans are low-interest loans funded by the Department of Education to undergraduate and graduate students attending school at least half-time. Undergraduate students must be in a minimum six credits, while graduate students must be in a minimum of five credits. Students must complete the Free Application for Federal Student Aid (FAFSA) for the University to determine loan eligibility.

Federal Direct Subsidized Loan

The Federal Direct Loan is subsidized by the Federal Government, which means the Federal Government pays the interest while the student is in school. The Federal Direct Loan is awarded based upon the financial need of the student. There is no priority deadline to qualify for this program.

Repayment begins after a six-month grace period, which means students do not begin repaying the loan until six months after the student either withdraws, graduates, or falls below half-time status. This loan may also carry some teacher cancellation provisions. For additional information regarding this program go to Studentaid.gov.

Federal Direct Unsubsidized Loan

The Federal Direct Unsubsidized Loan is not subsidized by the federal government. Therefore, the student is responsible for paying interest on the loan while they are in school. If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan). Students need to complete the FAFSA to qualify for this program. There is no priority funding deadline to qualify for this program. Students need to enroll at least half-time to be eligible for this loan.

Repayment will begin after a six-month grace period, which means students do not begin repaying the loan principal until six months after the student either withdraws, graduates, or falls below half-time status. This loan may also carry some teacher cancellation provisions. For additional information regarding this program go to Studentaid.gov.

The following chart shows the annual and aggregate limits for subsidized and unsubsidized loans:

 

Federal Direct Loan Annual Loan Limits:  Dependent Student Independent Student
First year  $5,500 $9,500
Second year    $6,500 $10,500
Third, fourth, fifth year $7,500  $12,500
Graduate $8,500 $20,500
 
Aggregate Loan Limits:      
Undergraduate      $31,000 $57,500
Graduate + Undergraduate   $138,500

Federal Cohort Default Rate

Federal student loans must be repaid with interest. Failure to repay student loan(s) can result in default. The default rate is the percentage of all outstanding loans that have been written off after a prolonged period of missed payments. MSUB’s most recent two-year rates are*:         

Fiscal Year 2020:        0.0% 

Fiscal Year 2019:         2% 

These rates come at a time when students loans have been in repayment pause due to the Covid 19 pandemic flexibility. Prior to the pandemic, MSUB’s rate over the previous 5 years averaged 7.94 % and is below the national average.

Federal Parent PLUS Loan

Parents of dependent students may apply for a Federal Direct PLUS Loan to help pay their child's education expenses if certain eligibility requirements are met. To be eligible for a Direct PLUS Loan for Parents:

  • The parent borrower must be the student's biological or adoptive parent. In some cases, the student's stepparentmay be eligible.
  • The student must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program.  Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married.
  • The parent borrower must not have an adverse credit history (a credit check will be done). If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances.

The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs. For additional information on eligibility requirements, visit the Federal student aid eligibility page.

To apply for a Federal Direct Parent PLUS Loan for your Montana State University Billings (MSUB) student, the following steps need to be taken:

  1. The student must be admitted as a degree-seeking student at MSUB
  2. The student must complete a Free Application for Federal Student Aid (FAFSA) and be eligible to receive Federal student aid.
  3. Must be enrolled in at least 6 credits per semester to be eligible.
  4. The parent borrower must complete a Parent PLUS Loan Application each year. Applications can be completed online at Federal Student Aid.
  5. Federal Direct Parent PLUS Loan Master Promissory Note (MPN) must be on file with the Department of Education.  To complete a Direct PLUS MPN, the parent borrower must sign in to Studentaid.gov using his/her FSAID , select "Complete MPN" and "Parent PLUS."

The annual limit on a PLUS Loan is equal to the student's cost of attendance minus any other financial aid the student receives. For example, if the cost of attendance is $6,000 and the student receives $4,000 in other financial aid, the student's parent can request up to $2,000.

Repayment Plans - The Direct PLUS Loan Program for parents offers three repayment plans (standard, extended, and graduated) that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally, borrowers will have 10 to 25 years to repay a loan. To read more about repayment plans, go to Repayment Information. 

Federal Graduate PLUS Loan

Federal Graduate PLUS Loans are unsubsidized loans made to graduate students.  The maximum PLUS Loan amount that a graduate student can borrow is the student’s cost of attendance minus other financial aid received. Interest rates for these loans vary each aid year, please contact the Office of Financial Aid and Scholarships to get the current year’s rate. Repayment of a PLUS loan for graduate students begins on the date of the last disbursement.  

 To apply for a Federal Direct Graduate PLUS Loan the following steps need to be taken:

  1. The student must be admitted as a degree-seeking student at MSUB
  2. The student must complete a Free Application for Federal Student Aid (FAFSA) and be eligible to receive Federal student aid.
  3. Must be enrolled in at least 5 graduate level credits per semester to be eligible.
  4. The student must accept the Graduate PLUS Loan via the MSUB Office of Financial Aid & Scholarships, either through their myInfo secure login or in writing.
  5. First time Direct Graduate PLUS Loan borrowers must complete:
  6. Loan Entrance Counseling.
    1. Federal Direct Graduate PLUS Loan Master Promissory Note (MPN) must be on file with the Department of Education.
    2. To complete a Direct PLUS MPN, sign in to Studentaid.gov using your Federal FSAID, select "Complete MPN" and "Graduate PLUS." NOTE: If the student is using an endorser on their loan a new MPN is required each year.
  7. Complete Graduate PLUS Loan Application each year. This can be completed online by logging into Studentaid.gov using your FSAID and selecting the “Request PLUS Loan” link. 

More information about the Federal Direct Graduate PLUS Loan online.

Exit Counseling 

The federal government requires students to complete student loan Exit Counseling before they graduate or stop attending at least half-time (less than 6 credits). Exit Counseling can be completed online at https://studentaid.gov/.  You will need your FSA ID to login.    

Federal Direct Subsidized and Unsubsidized Loans:  

  • Select the Loan Repayment menu at the top of the page   
  • Select Loan Exit Counseling, then Log in To Start with your information
    • Select your student type: Undergraduate or Graduate
  • Select Montana State University Billings as your school, and click Submit
  • When you are done you will receive confirmation that your Exit Counseling is complete 

Repaying your Loans 

After a student graduates, leaves school, or drops below 6 credits, the student may have a grace period before they begin repayment of student loans. Go to studentaid.gov for information on Loan Repayment. A record of all of the federal aid a student has received can be found in their dashboard on the same website.