Student Loans
A college education is an important investment in your future. Federal student loans can help make that investment possible, but borrowing is a financial commitment that should be carefully considered. If you are considering a Federal Direct Loan or Direct PLUS Loan to help finance your education or your dependent student’s education at Lackawanna College, we encourage you to review the information below before borrowing.
Because grants and scholarships may not cover the full cost of attendance, federal student loans can help eligible students and families meet remaining educational expenses. Students who complete the Free Application for Federal Student Aid (FAFSA) and meet federal eligibility requirements will be considered for applicable Federal Direct Loan programs as part of the financial aid process.
Lackawanna College may include Federal Direct Loans in a student’s financial aid offer based on the student’s annual and aggregate federal loan eligibility. Students are not required to borrow the full amount offered. We encourage students to borrow only what they need to meet their educational expenses and to consider their total anticipated borrowing throughout their college education.
Responsible borrowing is especially important for students who plan to continue their education or transfer to another institution. Federal student loans are subject to annual and aggregate borrowing limits, and amounts borrowed at Lackawanna College count toward those federal limits. Borrowing more than necessary now may reduce the amount of federal loan funding available to a student later in their education.
Before accepting a student loan, consider your educational costs, other available financial resources, the amount you truly need to borrow, and your responsibility to repay the loan with interest. The Student Financial Services team is available to help students and families understand their federal loan options and make informed borrowing decisions.
2026–2027 Federal Direct Loan Annual Limits
Federal Direct Loan eligibility is based on a student’s grade level, dependency status, financial need, enrollment status, cost of attendance, and remaining federal loan eligibility.
For the 2026–2027 award year, the maximum annual Federal Direct Subsidized and Unsubsidized Loan amounts for undergraduate students are:
| Undergraduate Grade Level | Dependent Student | Independent Student* | Maximum Subsidized Portion |
|---|---|---|---|
| First Year (0–23 earned credits) | $5,500 | $9,500 | $3,500 |
| Second Year (24–61 earned credits) | $6,500 | $10,500 | $4,500 |
| Third Year and Beyond (62+ earned credits) | $7,500 | $12,500 | $5,500 |
*The higher independent student limits also apply to dependent undergraduate students whose parents are unable to obtain a Federal Direct Parent PLUS Loan due to adverse credit or in certain other circumstances permitted under federal regulations.
The annual loan limit represents the combined maximum amount of Direct Subsidized and Direct Unsubsidized Loans a student may receive for an academic year. The amount shown in the “Maximum Subsidized Portion” column is the maximum amount that may be subsidized; eligibility for a subsidized loan is based on financial need. Any remaining eligible amount may be offered as a Direct Unsubsidized Loan.
For example, a dependent first-year student may be eligible for a total of up to $5,500, of which no more than $3,500 may be subsidized. An independent first-year student may be eligible for a total of up to $9,500, of which no more than $3,500 may be subsidized.
Additional Unsubsidized Loan Eligibility
Independent undergraduate students and dependent undergraduate students whose parents are unable to obtain a Parent PLUS Loan may qualify for higher Direct Unsubsidized Loan amounts. The additional eligibility is reflected in the independent student limits shown above.
Students are not required to borrow the maximum amount offered and are encouraged to borrow only what is necessary to meet their educational expenses.
Important Change Beginning July 1, 2026
Beginning with periods of enrollment on or after July 1, 2026, federal law requires annual Direct Loan limits for students enrolled less than full-time in term-based programs to be reduced proportionally based on the student’s enrollment status. Therefore, a student enrolled less than full-time may not be eligible to receive the full annual loan amount shown above.
Federal annual and aggregate loan limits apply, and a student’s actual eligibility may be lower based on enrollment, cost of attendance, financial need, other financial assistance, remaining aggregate loan eligibility, and other federal requirements.
Federal Direct Subsidized and Unsubsidized Loans
For the 2026–2027 award year, the interest rate for Federal Direct Subsidized Loans and Federal Direct Unsubsidized Loans for undergraduate students is 6.52% for loans first disbursed on or after July 1, 2026, and before July 1, 2027. The interest rate is fixed for the life of the loan.
A 1.057% loan fee is deducted from each Direct Subsidized and Direct Unsubsidized Loan. Because the loan fee is deducted before the funds are disbursed, the amount credited to the student’s account will be slightly less than the amount borrowed.
Federal Direct Loans are generally the first student loan option students should consider when additional funding is needed to help pay educational expenses. Students must be enrolled at least half-time to be eligible for a Direct Subsidized or Direct Unsubsidized Loan. For undergraduate students, Lackawanna College defines half-time enrollment according to the student’s eligible program and applicable enrollment requirements.
A Federal Direct Loan may be either subsidized or unsubsidized. With a Direct Subsidized Loan, the federal government generally pays the interest while the student is enrolled at least half-time and during applicable deferment periods. With a Direct Unsubsidized Loan, interest begins accruing from the date the loan is first disbursed.
Repayment generally begins after the student graduates, leaves school, or drops below half-time enrollment. Direct Subsidized and Direct Unsubsidized Loans generally provide a six-month grace period before repayment is required.
Federal Direct Unsubsidized Loans for Graduate Students
For the 2026–2027 award year, the interest rate for Federal Direct Unsubsidized Loans for graduate students is 8.07% for loans first disbursed on or after July 1, 2026, and before July 1, 2027. The interest rate is fixed for the life of the loan.
A 1.057% loan fee is deducted from each Direct Unsubsidized Loan. Because the loan fee is deducted before the funds are disbursed, the amount credited to the student’s account will be slightly less than the amount borrowed.
Graduate students are not eligible for Direct Subsidized Loans. Eligible graduate students may receive Direct Unsubsidized Loans and must generally be enrolled at least half-time.
Effective July 1, 2026, new federal annual and aggregate loan limits apply to graduate and professional students who do not qualify for the federal transition exception. Graduate students may generally borrow up to $20,500 per year, subject to an aggregate graduate loan limit of $100,000.
Interest begins accruing when the loan is disbursed. Repayment generally begins after the student graduates, leaves school, or drops below half-time enrollment, following the applicable grace period.
| Student Level | Annual Loan Limit | Aggregate Loan Limit | Loan Type |
|---|---|---|---|
| Graduate Student | $20,500 | $100,000 | Direct Unsubsidized |
Federal Direct PLUS Loans
For the 2026–2027 award year, the interest rate for Federal Direct PLUS Loans first disbursed on or after July 1, 2026, and before July 1, 2027, is 9.07%. The interest rate is fixed for the life of the loan.
A 4.228% loan fee is deducted from each Direct PLUS Loan. Because the loan fee is deducted before the funds are disbursed, the amount credited to the student’s account will be less than the amount borrowed.
Parent PLUS Loans
Federal Direct Parent PLUS Loans are available to eligible parents of dependent undergraduate students. Effective July 1, 2026, new Parent PLUS borrowing limits generally apply to students who do not qualify for the federal transition exception. The maximum Parent PLUS amount that may be borrowed by all parents on behalf of a dependent student is generally $20,000 per academic year, with a $65,000 aggregate limit per dependent undergraduate student.
Eligibility is subject to federal requirements, including a credit review. The amount a parent may borrow may also be limited by the student’s cost of attendance, other financial assistance, and applicable federal loan limits.
Graduate PLUS Loans – Limited Transition Exception
Effective July 1, 2026, Federal Direct Graduate PLUS Loans are no longer available to new graduate or professional student borrowers. Graduate students may receive a Grad PLUS Loan only if they qualify for the federal transition exception.
To qualify for the limited exception, a graduate or professional student generally must have:
- been enrolled in the applicable program of study as of June 30, 2026;
- received a Direct Loan for that program before July 1, 2026; and
- remained continuously enrolled in the same program at the same institution.
Students who do not qualify for the exception should review their eligibility for Federal Direct Unsubsidized Loans and other available financing options.
Steps to Receive a Federal Direct Loan or Direct PLUS Loan
If you plan to borrow a Federal Direct Loan, you must complete all applicable federal loan requirements before Lackawanna College can disburse your loan funds. These requirements help ensure that you understand the terms of your loan, your responsibility to repay the funds you borrow, and your rights and responsibilities as a federal student loan borrower.
Step 1: Complete Your Master Promissory Note (MPN)
A Master Promissory Note (MPN) is a legal document in which you agree to repay your federal student loan(s), including applicable interest and fees, to the U.S. Department of Education.
An MPN may generally be used for multiple Direct Loans received over a period of up to 10 years, although there are circumstances in which a new MPN may be required.
Different MPNs apply depending on the type of loan and borrower:
- Undergraduate students borrowing a Direct Subsidized and/or Direct Unsubsidized Loan must complete the MPN for Subsidized/Unsubsidized Loans.
- Graduate or professional students borrowing a Direct Unsubsidized Loan must complete the applicable MPN for Direct Unsubsidized Loans.
- Parents borrowing a Direct Parent PLUS Loan must complete the PLUS MPN for Parents.
- Graduate students who qualify for the federal transition exception allowing continued Grad PLUS borrowing beginning July 1, 2026, must complete the applicable PLUS MPN.
To complete your MPN, visit StudentAid.gov and sign in using your StudentAid.gov account.
Step 2: Complete Entrance Counseling
If you are a first-time student Direct Loan borrower, you must complete federal Entrance Counseling before receiving the first disbursement of your Direct Loan.
Entrance Counseling provides important information about:
- Your rights and responsibilities as a borrower;
- How interest and loan fees affect the amount you owe;
- Responsible borrowing and budgeting;
- Federal student loan repayment requirements; and
- The consequences of failing to repay your loan.
Complete Entrance Counseling through StudentAid.gov.
Parent PLUS Loan borrowers are not required to complete Entrance Counseling. However, additional PLUS Credit Counseling may be required when a PLUS applicant has an adverse credit history and becomes eligible by obtaining an endorser or documenting satisfactory extenuating circumstances.
Step 3: Accept Your Loan and Complete Lackawanna College Requirements
Review your financial aid offer carefully and complete any additional requirements identified by Student Financial Services.
You are not required to borrow the full amount of a federal student loan offered to you. Before accepting a loan, consider your actual educational expenses and borrow only what you need.
Students must meet all applicable federal eligibility requirements, including enrollment requirements, before Federal Direct Loan funds can be disbursed.
Federal Loan Disbursement
Once all eligibility requirements have been satisfied, Federal Direct Loan funds are sent electronically to Lackawanna College and applied to the student’s account toward eligible educational charges.
Federal Direct Loans are generally disbursed in more than one installment according to the students’ loan period and applicable federal requirements.
First-year, first-time Direct Subsidized and Direct Unsubsidized Loan borrowers may be subject to a 30-day delayed disbursement requirement. When applicable, the College may not disburse the first loan proceeds until 30 days after the first day of the student’s program of study.
After financial aid has been applied to the students’ eligible institutional charges, any remaining Title IV credit balance will be provided to the student or parent, as applicable, in accordance with federal regulations and the College’s refund procedures.
Exit Counseling
Federal student loan borrowers must complete Exit Counseling when they graduate, withdraw from the College, or drop below half-time enrollment.
Exit Counseling provides important information to help borrowers prepare for repayment, including:
- Reviewing federal student loan debt;
- Understanding repayment obligations and available repayment options;
- Identifying the student’s federal loan servicer;
- Understanding deferment and forbearance;
- Avoiding delinquency and default; and
- Updating borrower contact information.
Complete Exit Counseling through StudentAid.gov.
Lackawanna College may also require completion of Exit Counseling as part of its graduation clearance process. Students should complete all College graduation requirements to avoid delays in graduation processing.
Private Alternative Education Loans
Private alternative education loans are non-federal loans offered by private lenders to help students and families pay educational expenses that are not covered by financial aid or other available resources. Private loans are not part of the Federal Direct Loan Program, and their interest rates, fees, repayment terms, eligibility requirements, and borrower protections vary by lender.
Students are encouraged to exhaust federal, state, institutional, scholarship, grant, and Federal Direct Loan eligibility before considering a private education loan. Federal student loans generally provide benefits and protections that may not be available with private loans, including federal repayment options and certain deferment, forbearance, and loan forgiveness provisions.
Before borrowing a private education loan, students and families should carefully compare:
- Fixed versus variable interest rates;
- Loan fees and other charges;
- Repayment terms and monthly payment requirements;
- Credit and cosigner requirements;
- In-school payment or deferment options;
- Cosigner release provisions; and
- Borrower benefits and protections.
Private education loans are generally credit-based, and a lender may require the student to apply with a creditworthy cosigner. Approval, interest rates, and loan terms are determined by the individual lender.
Compare Private Loan Options
Students and families may use ELMSelect to review and compare private education loan options available to Lackawanna College students. ELMSelect provides information that can assist borrowers in comparing lenders, interest rates, repayment terms, and other loan features.
Students are not required to select a lender listed on ELMSelect. Lackawanna College will process an eligible private education loan from any lender selected by the student, consistent with applicable requirements.
Students and families should carefully review all loan terms and conditions directly with the lender before making a borrowing decision. Borrow only what is necessary to meet educational expenses.
For assistance understanding private education loan options or how a private loan may affect your financial aid, please contact the Office of Student Financial Services at (570) 961-7859 or sfs@lackawanna.edu.
Federal Student Aid Ombudsman Group
The Federal Student Aid (FSA) Ombudsman Group, part of the U.S. Department of Education, is a resource available to students and borrowers who need assistance resolving disputes or concerns involving federal student aid or federal student loans.
Before contacting the Ombudsman Group, students and borrowers are encouraged to first attempt to resolve their concern by contacting the appropriate party, such as Lackawanna College Student Financial Services, their federal student loan servicer, or Federal Student Aid.
If the issue remains unresolved, a complaint or dispute may be submitted to Federal Student Aid through the Federal Student Aid Feedback Center.
Online: Visit the Federal Student Aid Feedback Center at StudentAid.gov to submit a complaint or request assistance.
Mail:
U.S. Department of Education
FSA Ombudsman Group
P.O. Box 1854
Monticello, KY 42633
When requesting assistance, borrowers should be prepared to provide information about the issue and any steps already taken to resolve it. Students should retain copies of relevant correspondence and documentation related to their concern.
The FSA Ombudsman Group is a free federal resource and does not replace the normal processes available through the College, Federal Student Aid, or a student’s federal loan servicer.
Loan Websites
Official Cohort Default Rate Information
| Cohort Fiscal Year | Official Default Rate |
|---|---|
| 2023 | 0.8 |
| 2022 | 0 |
| 2021 | 0 |