Although student loans are a convenient source of funding for your education, it is important to budget and borrow carefully.

• Consider ways to keep your costs down to reduce student loan debt.
• Borrow only what you need and can reasonably repay.
• Research the average pay of your chosen field by viewing the Occupational Outlook Handbook. It contains information on projected earnings, expected growth rates and typical work environments for most occupations.
• Plan to graduate in a timely fashion. Adding another year of study can add significantly to your debt at graduation. Meet with your academic advisor every semester to plan for efficient progress toward graduation.
• Keep track of your loan debt and the amount you will have to repay when you graduate. Use Studentaid.gov's Loan Simulator to estimate and find the best repayment strategy.

Take very seriously the responsibility of borrowing and repaying an educational loan.

• Read and understand the terms and conditions on your promissory note. You are agreeing to repay the loan with all accrued and capitalized interest and deducted fees.
• It is your responsibility to read and keep all your records and contact your lender regarding any changes in your status as a student.
• You are obligated to repay your loan regardless of whether you complete your education, are satisfied with your education, or are able to find a job.

How conscientiously you make payments on your student loan will affect your ability to borrow for a car, a house, or other purchases in the future. If you are late with your student loan payments, it will have a negative effect on your credit history. On the other hand, repaying your student loan on time can help you establish and maintain an excellent credit history.

Preventing Default

Default is a legal term used when a borrower fails to repay a loan according to the terms of the signed promissory note. For a Federal Direct Student or Parent PLUS Loan, default occurs when the borrower fails to make a payment for 270 days under the normal repayment plan, and has not requested deferment of payment according to the Department of Education's standards.

Defaulting on a loan affects not only the borrower, but also the college or university as well as the US taxpayer. The borrower will experience negative consequences to his or her credit rating, garnishment of wages and collection from federal funds such as tax refunds or Social Security benefits.

If many borrowers at a particular college or university go into default status, the institution can lose the ability to participate in federal student aid programs, denying future students the ability to receive financial aid to help pay for college.

When borrowers default, the US government eventually must write off the loss, and passes the losses on to the taxpayer, either in the form of higher taxes, higher deficits, or the loss of other programs and benefits that the funds might have been used for instead.

Contact your lender(s) if you are having problems making your payments. You might qualify for a forbearance, which allows you to stop making payments for a time period while keeping your loans in good standing.

Eligibility

To be eligible for a Federal Direct Loan, you must meet the following criteria:

• You must be enrolled at least half-time.
• You must file the FAFSA (Free Application for Federal Student Aid) every year that you are enrolled in school. Most students who apply will qualify for a subsidized or unsubsidized Direct Loan.

How to apply

The Direct Loan application is a three-step process. If you do not complete all three steps, your loan will not be processed.

• Notify the OFA how much you want to borrow in the student portal.
• Complete the Direct Loan Entrance Counseling process at StudentAid.gov.
• Sign your Direct Loan Master Promissory Note (MPN) at StudentAid.gov. The Direct Loan MPN is good for ten years provided at least one Direct Loan is disbursed to you within the first 12 months after signing.

Differences between subsidized and unsubsidized loans

Subsidized
The federal government pays the interest on a subsidized loan while the student is in school at least half-time. After the student enters repayment (six month after dropping below half-time or leaving school), interest will begin to accrue. Students should contact their federal loan servicer for more information.

Unsubsidized
Interest does accrue on an unsubsidized loan while you are in school. You may choose to pay interest while in school in order to avoid "paying interest on interest" (capitalizing interest).

Interest rates
The Direct Loan interest rate varies annually with a maximum rate of 8.25% for undergraduates and 9.5% for graduate students. The interest rate for undergraduate Direct Loans disbursed on or after July 1, 2026 is 6.52%. The interest rate for graduate Direct Loans disbursed on or after July 1, 2025 is 8.07%.

Loan fees

Direct Loans disbursed on or after October 1, 2020 require a 1.057% origination fee which is paid at the time of disbursement. Thus, 98.943% of the gross loan amount will be disbursed to your student account.

Repayment and consolidation
When you near graduation (or drop below half-time), you will be given information on loan repayment and consolidation. This is referred to as exit counseling (or "the exit interview"). For more information, see our page on loan repayment.

Federal Direct Loan programs carry both annual and cumulative (lifetime) limits. The FAFSA Submission Summary from your FAFSA contains your cumulative borrowing history, and you may also view your entire student loan history online via studentaid.gov.

Annual Limits

Aggregate Limits

*The graduate/medical debt limits do not include loans received for undergraduate study.
**Graduate subsidized loans are no longer available as the federal government has ended the subsidized loan program for graduate students.

NOTE: If a student repays a portion of the student loan, then the aggregate amount is adjusted to reflect the outstanding principal balance owed on the loans.

Lifetime loan limits

NOTE: If a student repays a portion of the student loan, the lifetime loan limit is not adjusted to reflect the outstanding principal balance owed on the loans.

Note for legacy borrowers

If you qualify as a legacy student under the One Big Beautiful Bill, your annual and lifetime loan limits are different. Visit our page with loan limits page for legacy students for your loan limit information.

Eligibility
First, the student must have a FAFSA on file. Then you may borrow a Parent PLUS loan if:

• You are a legal parent (even if not required to provide information on the FAFSA) or you are a stepparent required to provided information on the FASFA.
• You are not in default on any federal education loans.
• You are a U.S. citizen or eligible non-citizen.
• You do not have an adverse credit history.*

*The credit approval process does not measure whether a parent can afford to borrow, it only looks to see if there is an adverse credit history. Therefore, a parent with a low income but a clean credit record is likely to be approved.

If you are not the custodial parent, you may still borrow a PLUS on the student's behalf.

How to apply
The Parent PLUS application is a multi-step process. If you do not complete each step, your loan will not be processed.

• Go to studentaid.gov. The parent will need to sign in with their FSA ID or create one if needed.
• Complete the Direct PLUS Loan application for Parents. Pay close attention when choosing the correct academic year and period for which you're applying. MSU's School code is 002290.
• Complete a PLUS loan Master Promissory Note (MPN) for Parents. The MPN will be valid for 10 years provided a PLUS loan is disbursed within 12 months of the MPN signing. If the loan is approved with an endorser, the MPN will need to be renewed annually.

When to apply
You should begin the application process at least ten days before you need the funds to ensure timely processing. Depending on the time of year, it may take up to 24 hours for the servicer to send notice of your credit approval or rejection.

Annual Parent PLUS Loan limits
for loans disbursed on or after July 1, 2026:

• Annual Parent PLUS Loan Limit: the student can have no more than $20,000 borrowed on their behalf, even if multiple parents are borrowing.
• Lifetime Parent PLUS Loan Limit: the student can have no more than $65,000 borrowed on their behalf, even if multiple parents are borrowing.
• If you qualify as a legacy student under the One Big Beautiful Bill, your annual and lifetime loan limits are different. Visit our page with loan limits page for legacy students for your loan limit information.

Disbursement & Refunds

• If the loan is approved, funds are sent directly to MSU and applied against the student's bill. Any PLUS funds that exceed MSU charges are delivered as a refund by Student Accounts to the student or parent as the parent directs on the PLUS application.
• Disbursement of Parent PLUS funds depends on when the loan is approved. By law, Parent PLUS funds cannot be disbursed until 10 days prior to the student's first day of class in a semester or summer subterm. If that date has passed and the approval process has been completed, MSU will generally disburse the funds within 2 days of approval.

Counseling
PLUS Counseling is required for borrowers who have an endorser listed on the loan or appeal an original credit decision.

Interest Rate
The interest rate for Parent PLUS Loans disbursed on or after July 1, 2026 is 9.07%. For more information on Parent PLUS Loans, including loan limits, interest rate, fees and more, visit studentaid.gov.

Alternatives if you are not approved
These are some options the family may want to consider:

• Parent may be approved with an endorser (co-signer).
• Students may contact the Office of Financial Aid and request a "PLUS replacement," which allows them to borrow an additional amount of Federal Direct Unsubsidized Student Loan.
• Private (alternative) loans may be available (see below).

MSU Short Term Loans
MSU provides low-interest short term loans (7% per year). Loans are usually granted in amounts up to:

• $500 for undergraduate students
• $1000 for graduate students
• $1,500 for law students
• $1,700 for medical students

Short term loans are available to students who are registered for the current semester and who can demonstrate the ability to repay within 60 days.

Apply for a Short Term Loan at student.msu.edu. Visit your Student Accounts tile and choose "Short-Term Loans" from the "MSU Loans" option in the left-hand menu. Select the Short Term Loan application from the "Loans" menu at the top right. If you meet the criteria, you will be instantly approved and have your funds direct deposited into your bank account.

COGS Loans
The Council of Graduate Students (COGS) offers interest-free 60-day loans up to $500 to MSU graduate students. Please visit the Spartan One-Stop in the Hannah Administration Building, Room 140, to apply for a COGS loan. Loans are administered solely by the Office of Financial Aid and are subject to the availability of funds and the applicant meeting fund qualifications. 

ASMSU Loans
Associated Students of Michigan State University (ASMSU) offers interest-free loans up to $300 through the 6th week of each semester (available to both undergraduate and graduate students). For more information, visit the ASMSU website.

Repayment
MSU loans not paid by the due date result in a late fee and a hold on the student's account that prevents a student from enrolling or registering for classes. The student must repay the loan in order to have the hold removed.

Payment options
Students may prepay all or any part of the loan at any time without penalty. There are three payment options available:

• Pay Online: ECSI is MSU’s third-party billing service provider. One-time or recurring payments can be set up on Heartland ECSI’s website at https://heartland.ecsi.net/
• Drop off a check or money order at the Administration Building. Drop boxes are located outside Room 110 (Spartan One-Stop) and in the circle drive parking lot. Include your payment remittance from your most recent monthly bill from ECSI (a third -party billing service provider) or use the yellow short-term loan payment slips outside Room 110. Place payment remittance or payment slip and the check or money order in an envelope prior to placing in the drop box. Checks and money orders should be payable to Michigan State University and include your student ID.
• Mail your payment remittance on your most recent monthly bill with your payment to (checks need to be payable to Michigan State University):
  
  Michigan State University
  c/o Educational Computer Systems Inc
  PO Box 1287
  Moon Township, PA 15108

Private educational loans are available from a number of lenders for students whose cost of attendance has not been met with other financial aid. The FAFSA (Free Application for Federal Student Aid) is normally not required to apply for a private loan.

Private loan programs differ from federal student loans, and also from Federal Direct Parent PLUS or Grad PLUS loans, in several ways:

• Annual and total loan limits are higher than federal student loans.
• Interest rates and fees vary by lender.
• Rates are normally variable and change on a quarterly basis.
• Loan approval and the rate of interest are based on credit approval and approval is not guaranteed.
• Most students will be required to secure a co-signer.
• Loans are not federally guaranteed; therefore, they do not have the same deferment, cancellation and consolidation benefits.
• The terms and conditions for private loans vary greatly.

Michigan State University has partnered with ELMSelect to offer a tool that will help students and families. ELMSelect has collected all private lenders used by MSU students in the past five years. The tool allows you to select lenders that specialize in your area of study, and to compare rates and conditions in order to select the loan product that best fits your need.

When can I apply for a loan?
You should begin the application process 4 to 6 weeks before you need the funds to ensure timely processing.

When will the loan be disbursed to my MSU Student Account?
Disbursement of funds depends on when the loan is approved. MSU policy is to disburse no earlier than 10 days prior to the student's first day of class in a semester or summer subterm. If that date has passed and the approval process has been completed, MSU will generally disburse the funds within 2 days of receiving the funds from the lender (most lenders release disbursements 10 business days after the loan is approved by the school).

Use the ELMSelect comparison tool to find out when repayment begins on your loan, the interest rate, and any other fees.

Loan proration impacts undergraduate students applying for fall graduation who are receiving federal student loans. When a student will complete their degree in the middle of an academic year, federal student aid regulations require that we prorate the loan based on the student's enrollment level for that final semester.

Max loan amounts by fall credit load
Please note that the actual loan amount may be less if a student has reached their annual or lifetime loan limits prior to fall semester. For prorated loan amounts above 11 credits, visit the full table here.

Before federal loan money can be disbursed, the borrower must sign a Master Promissory Note (MPN). Once signed, the note is good for multiple years (with a few exceptions). If you have any questions, please feel free to contact us.

Federal Direct Loans
The MPNs for the following loans are available at studentaid.gov:

• Federal Direct Subsidized / Unsubsidized Loan
• Parent PLUS Loan
• Grad PLUS Loan

Be sure to correctly specify the type of loan you are signing for, as signing for the wrong loan will delay processing. If you have both subsidized and unsubsidized Direct Loans, you only need to complete one Direct Loan MPN.

Perkins Loan and Health Profession Loans
If you would like to view a previously signed Perkins Loan Promissory Note or Health Profession Loan Promissory Note, please visit controller.msu.edu/receivables/loans-receivables for additional information.

Loan Exit Counseling (The Exit Interview)
When you are prepared to graduate from MSU, we will invite you to participate in Loan Exit Counseling, which you can do in person, by mail, or on the Internet. Loan counseling provides information on what to expect as you begin repaying your loans.

Who to contact after you graduate or leave MSU

• For Federal Direct Unsubsidized and Federal Direct PLUS loans:
  Your studentaid.gov dashboard provides contact information for all Federal Direct Unsubsidized and PLUS loan servicers and lets you look up information about your loans, including how much you owe and who your lenders and servicers are.
• For Health Professions, Institutional and Federal Perkins loans:
  • Please be aware that ECSI is our third-party billing service provider. Once you begin repayment, you will receive statements from ECSI.
  • For questions regarding your loan, please contact MSU Loans Receivables at 1-517-355-5140.
• For private (alternative) loans, refer to your loan applications to find your lender or servicer.

Repayment Plans
Options for repayment of federal loans are discussed here.

Loan Forgiveness Programs
Under certain circumstances, the federal government will cancel all or part of an educational loan. This practice is called loan forgiveness or loan cancellation.

• Federal loan forgiveness, cancellation, and discharge
• Loan forgiveness through volunteer work
  AmeriCorps and Peace Corps offer the opportunity to reduce your student loan indebtedness.

Loan Consolidation
A Direct Consolidation Loan allows you to consolidate multiple federal student loans into one loan at no cost to you.” For more information, visit studentaid.gov's loan consolidation page.

Financial Hardship, Deferment, Forbearance, Default
If you are unable to make your student loan payments, there are deferment and forbearance options available. The consequences of defaulting on your student loans are severe, so explore your options BEFORE you default. 

More info from the Department of Education on repaying your loans

Direct student loans, both subsidized and unsubsidized, are the loans that most students rely on to fund their education if they choose to borrow. A small number of students will borrow private loans in addition to Direct loans. Only Direct Loan amounts for seniors are included in the chart below.

Visit the Graduate Student Loans page for graduate summer aid information.

General information about summer sessions can be found on MSU's Summer Study website.

There is no separate summer application. Students will be processed for summer financial aid based on actual summer enrollment. Students with a FAFSA application for the current aid year will be considered for available financial aid.

Summer aid eligibility

Students must be admitted into an aid eligible program to receive summer aid.

Summer aid and study abroad

If you are planning to study abroad during the summer, contact the Office of Financial Aid about possibly adjusting your budget to account for expenses.

Summer disbursement

Summer enrollment periods vary throughout the session, since a course may last a few days or the entire summer. Summer aid disbursement cannot occur until 10 days prior to your first day of summer classes.

Students should finalize their schedules before their first day of class. Dropping courses after starting a course may result in a financial aid bill.