The following information on the Federal Student Loan Programs is meant to give you a brief overview of the programs available at the School of Mines. Links to detailed information on the Federal Loan Programs is provided below within each program description. Unlike the private lender based Federal Family Education Loan Programs, you do not need to select a lender for any of the Direct Loan programs. Loan funds through the Direct Loan Programs are disbursed directly from the Federal Government.
In order to be considered for the Federal Student Loan Programs listed below (other than the Federal Consolidation Loan), students must file a new Free Application for Federal Student Aid (FAFSA) each year. You must be a fully admitted degree-seeking student at the School of Mines in order to have disbursed Federal Student Aid of any type. Unless otherwise noted, these programs are available to both graduate and undergraduate students who are enrolled at least half time.
Whether you borrow a Perkins or a Direct loan, you must carefully consider your Responsibilities and Rights as a student loan borrower. Borrowing a student loan can open windows of opportunities for pursuing a post-secondary education that would not otherwise be possible. However, borrowing more than you really need to finance your college education can also have the effect of dictating your career choices after graduation. Without a doubt, SDSM&T students have the potential to make above average incomes once they have graduated. However, students should always carefully consider the amount of loan funds they borrow throughout the course of their college education.
Students who borrowed student loans (Direct Sub/Unsub, Perkins or Stafford) at some time during the course of their academic career (not just at the School of Mines) and graduated from the School of Mines with a Bachelors Degree during the 2010-2011 academic year, had an average federal student loan indebtedness of $26,408. If taking the full 10 years to repay at an assumed interest rate of 6.8%, the monthly payments on this average indebtedness would be approximately $304 per month. Your payments could be less depending on the interest rate(s) on the Federal Loans you have taken out to fund your education. How much you borrow depends on your situation and your committment to borrow as little as possible. Consider your options carefully and make the right decision for you based on your career goals and future earning potential.
From the following list, click on the type of loan you wish to review for further information.
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Federal Perkins Student Loan
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Federal Direct Student Loan
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Federal Consolidation Loans
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Federal Direct Grad PLUS Loan
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Federal Direct Parent PLUS Loan
Federal Perkins Student Loan:
The Federal Perkins Student Loan program is administered by the School of Mines and like any loan, must be repaid. Awarding priority is given to students who show financial need through the FAFSA and who have filed their FAFSA on January 1 (prior to the fall semester the student will be attending Mines) and thereafter until funds are exhausted for the award year. Although the annual loan limits set by Congress are $5500 a year for undergraduate students and up to $8000 a year for graduate students, in an effort to make this loan program available to as many of our students as possible, the maximum annual award at this time at the School of Mines is $2500 (however, depending on the situation and available funds, this amount can be more). Students who borrowed Perkins loans at some during their academic career and graduating from the School of Mines during the 2010-2011 academic year, had an average Perkins indebtedness of approximately $2,360. This would result in a minimum monthly payment of $40. Students are under no obligation to accept a student loan and should do so only after considering the long-term implications of borrowing more than what is really needed to attend college.
Arrangements will be made to obtain the student's signature on a Master Promissory Note (MPN) before the first disbursement of the Perkins Loan. Students must also sign a statement prior to each disbursement showing their total Perkins borrowing at the School of Mines. Repayment is to be worked out with the Business Office when the borrower graduates or are no longer enrolled at least half time. No payments are required during any period of at least half time enrollment at at an eligible post-secondary institution or when approved for one of the many available deferments. (However, it is the borrowers responsibility to file the necessary paperwork with the Business Office or our loan servicing agent before an eligible deferment will be processed.) During the repayment period, the interest rate on this loan is 5% on the unpaid principal balance. Depending on how much has been borrowed, repayment may be up to 10 years. The MPN will detail the deferments that are available and under what circumstances the Perkins Loan can be canceled. This information is also available at the Perkins Loans and Responsibilities and Rights links.
Perkins Loan borrowers should also review the information available from the SDSM&T Perkins Loan Office for further information regarding benefits and available services.
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Federal Direct Student Loan
With the Federal Direct Loan Program you borrow loan funds directly from the Federal Government, and like any loan, must be repaid. Subsidized Direct Loans for undergraduate borrowers with a first disbursement on or after July 1, 2011 (but before July 1, 2012) have a fixed interest rate of 3.4%. Subsidized Direct Loans for undergraduate borrowers with a first disbursement on or after July 1, 2010 (but before July 1, 2011) have a fixed interest rate of 4.5%. Subsidized Direct Loans for undergraduate borrowers with a first disbursement on or after July 1, 2009 (but before July 1, 2010) have a fixed interest rate of 5.6%. Subsidized Direct Loans for graduate borrowers and Unsubsidized Direct Loans for all borrowers have a fixed interest rate of 6.8%. While you are in school, the Federal Government pays interest on the Subsidized Direct Loan for you; however, you are responsible to pay the interest on the Unsubsidized Direct Loan.
Students who borrowed a Direct or Stafford loans while attending and graduating from the School of Mines during the 2010-2011 academic year, had an average indebtedness for these types of loans of approximately $25,542. Using the current maximum interest rate on a Direct Loan of 6.8%, this would result in an approximate monthly payment of $294. Students are under no obligation to accept a student loan and should do so only after considering the long-term implications of borrowing more than what is really needed to attend college.
Your award letter shows the eligible loan program and the maximum amount you are able to receive based on your grade level, Estimated Cost of Attendance, Expected Family Contribution and other financial aid you are receiving. You are under no obligation to accept a student loan and should do so only after considering the long-term implications of borrowing more than you really need to attend college.
Repayment will be according to the provisions of your Direct Loan Master Promissory Note. You are expected to contact your Direct Loan servicer when you graduate or cease to be enrolled on at least a half time basis.
First-time Direct Loan borrowers must complete a Master Promissory Note (MPN)and Loan Entrance Counseling.
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Federal Consolidation Loans
Applying for a Federal Consolidation Loan can help to lower monthly payments while giving the borrower more time to repay. Although a consolidation loan can help to ease the burden of monthly payments, the borrower will pay much more in interest over the life of the loan and lose many of the provisions of their original loan promissory note. The advantages and disadvantages should be weighed carefully before agreeing to a loan consolidation. In addition to the information provided by the U.S. Department of Education via the link at the beginning of this paragraph, your first stop should be to contact your student loan servicer to discuss loan consolidation options available through them.
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Federal Direct Grad PLUS Loan
The Federal Direct GRAD PLUS Loan is available only to Graduate students who have been awarded their annual maximum for the Subsidized & Unsubsidized Direct Loan programs or have exhausted their full $138,500 of eligibility as a graduate student. Like any loan, a Direct GRAD PLUS loan must be repaid. Direct GRAD PLUS loans have a fixed interest rate of 7.9%. The Direct GRAD PLUS Loan Program is available to students with good credit histories who are enrolled at least half time. The annual loan limit is the estimated cost of education minus any financial aid received by the student (i.e., grants, loans, scholarships, work, etc.). All fees that are required to be withheld from the loan disbursement will be disclosed on the Notice of Guarantee and Disclosure Statement. Repayment of the GRAD PLUS loan begins within 60 days of the loan period's final disbursement on the loan (for example, after the spring semester disbursement for a fall/spring loan). Instructions for repayment are included with the application.
Applicants for the GRAD PLUS loan must file a new FAFSA each school year. Direct GRAD PLUS loan funds will be electronically received and applied to the student's account.
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Federal Direct Parent PLUS Loan
The Federal Direct Parent PLUS Loan program is available only to the parents (natural or adoptive) of dependent students pursuing an undergraduate degree. The Direct Parent PLUS loan, like any loan, must be repaid. Direct Parent PLUS loans have a fixed interest rate of 7.9%. The Direct Parent PLUS Loan Program is available to parents with good credit histories who wish to borrow for a dependent student enrolled at least half time. The annual loan limit is the estimated cost of education minus any financial aid received by the student (i.e., grants, loans, scholarships, work, etc.). However, parents should never borrow more that what is absolutely necessary to help the student offset their costs for attending the School of Mines. All fees that are required to be withheld from the loan disbursement will be disclosed on the Notice of Guarantee and Disclosure Statement. Repayment of the Parent PLUS loan begins within 60 days of the loan period's final disbursement on the loan (for example, after the spring semester disbursement for a fall/spring loan). The parent borrower can elect to defer payments on the principal until six months after the date the student ceases to be enrolled at least half time; however, interest continues to accrue, which can be paid monthly, quarterly or allowed to capitalize the interest quarterly (add accrued interest to the principal balance). Instructions for repayment are included with the application.
Federal Regulations now require that the student for whom a Parent PLUS loan is borrowed must have a valid FAFSA record on file in the SDSM&T Financial Aid Office. In the case of a student with divorced parents, whose parental information used on the FAFSA does not dictate which parent can borrow a Parent PLUS Loan; the fact that there is a valid FAFSA record for the student dictates if a Parent PLUS loan can be processed on behalf of the student. If a parent wants to apply for a Parent PLUS loan, we ask that the Federal Direct Parent PLUS Loan Form be printed off, completed and returned to our office for processing. Direct Parent PLUS loan funds will be electronically received and applied to the student's account. Any funds in excess of what is needed to pay the student's bill are expected to be used to assist the student in paying for educationally related expenses. Parents should carefully consider how much they agree to borrow and not borrow more than what is needed for the academic year.
Feel free to contact our office if you have further questions regarding any of the information provided on this page.
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For more information contact...
Financial Aid Office
SDSM&T
501 E Saint Joseph Street
Rapid City, SD 57701-3995
Work Phone 605-394-2274
FAX 605-394-1979
Toll Free 1-877-877-6044
financialaid@sdsmt.edu
Contact: SDSM&T Financial Aid
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