Student Loan ($2,500/Year) Process

MHS graduates are required to borrow $2,500 in Direct Subsidized Loan funds each academic year ($1,250 per semester, $833 per trimester, or $625 per quarter) as an investment in their own education before any CES funds are paid. No Direct Unsubsidized Loan is permitted. For students graduating from post-secondary school within six (6) years of activating their CES funds, MHS may repay up to $2,500 in student loans per academic year IF the student has CES funds remaining after graduation! This section explains the process of securing a Direct Subsidized Loan and gives some examples of specific loan situations.

First-time student loan borrowers need to complete three elements to obtain a Direct Subsidized Loan: (1) inform their Financial Aid Office how much student loan funds they need (2) complete Entrance Counseling and (3) complete a Master Promissory Note (MPN). Returning/Repeat borrowers usually only need to inform the Financial Aid Office how much student loan funds they need EACH YEAR because the Entrance Counseling and MPN elements normally remain valid for 10 years after initially completing them.

How do you get your $2,500 Direct Subsidized Loan:

(1) Inform the Financial Aid Office at your college how much loan money you need
(2) Complete Entrance Counseling at https://studentloans.gov (use FSA ID)
(3) Complete Master Promissory Note (MPN) at https://studentloans.gov (use FSA ID)

Details on the 3 steps needed to get your loan:

(1)   Inform the Financial Aid Office at your college how much loan money you need – Your college will offer you a $3,500 Direct Subsidized Loan as part of the normal financial aid application process. Remember that you only need to borrow $2,500 of this $3,500 loan as per CES rules. They will also offer you a $2,000 Direct Unsubsidized Loan that you cannot accept. Read the letters and emails the Financial Aid Office sends you to learn exactly how your college expects you to inform them how much loan money you want (letter, email, online)!

(2)   Complete your Entrance Counseling at https://studentloans.gov – Entrance Counseling is like a student loan “quiz” in a question and answer format that you complete to ensure that you are an informed borrower. The goal is to educate you about the basics of what a Direct Stafford Loan is and what your rights and responsibilities are as a borrower. This requirement takes about 30 minutes to complete and you will “sign in” using your FSA ID. Complete Entrance Counseling only after you know what college you will be attending.

(3)   Complete your Master Promissory Note (MPN) at https://studentloans.gov — Master Promissory Note (MPN) is the legally binding document between you and your lender (the federal government) that you are borrowing money from the federal government that needs to be repaid (hopefully by MHS if you do well in college, graduate in 6 years  and  have  CES funds remaining). The MPN is normally valid for a 10-year time frame and can be used by multiple colleges so you usually only have to complete one MPN in your college career. The MPN takes 20 – 30 minutes to complete and you should have the names, phone numbers, and addresses of two adults (ex. parent, uncle, older sibling) with different U.S. addresses with you to use as references on the promissory note. Complete the MPN only after you know what college you will be attending. You will “sign” the MPN using your FSA ID.

Who are you borrowing loan money from?

You are borrowing a Direct Loan. The Direct Loan program is owned and operated by the federal government through the U.S. Department of Education. The federal government (good old “Uncle Sam”) is your lender. The federal government maintains a website and customer service center dedicated to the administration of these student loans. You will be completing your Entrance Counseling and MPN requirements via this website. Below is the contact information for the Direct Loan Program:

https://studentloans.gov   (1-800-557-7394) *

*Option 1, then Option 2 (General Loan Questions) or Option 3 (Entrance Counseling or MPN Questions)

Direct Loan Borrowing Chart

Year in College Direct Subsidized Loan Eligibility Amount MHS Direct Subsidized Loan Borrowing Requirement
Year 1 $3500 $2500
Year 2 $4500 $2500
Year 3 $5500 $2500
Year 4 $5500 $2500
Year 5 (if needed) $5500 $2500

The CES program requires students to borrow only $2500 in Direct Subsidized Loans per academic year. If you choose to borrow more than $2500 to pay for books, supplies or other educational costs, you can do so as long as you do not borrow more than the “Direct Subsidized Loan Eligibility Amount” listed above. However, any such “extra loans” are your responsibility to repay, not Milton Hershey School’s.

Examples of Student Loan Borrowing Situations:

Example A: {On-Campus Student}

Tuition, fees, room & board = $18,000

Minus Grant Aid of $6,000

Equals Balance Due of $12,000

Student Borrows $2,500

MHS Pays $9,500 to college

Example B: {On-Campus Student}

Tuition, fees, room & board = $22,000

Minus Grant Aid of $9,000

Equals Balance Due of $13,000

Student Borrows $3,500 ($1,000 more than needed)**

MHS Pays $10,500 to college

**MHS will only repay $2,500 of this $3,500 loan!

Example C: {Commuting from Home}

Tuition & fees = $10,000

Minus Grant Aid of $6,000

Equals Balance Due of $4,000

MHS  also allows students $3,000 for meals

Student Borrows $2,500 for meals

MHS Pays  $500 to student for meals

MHS Pays $4,000 to college

 

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