Lackawanna's Federal & Alternative Loans | Lackawanna College

Federal & Alternative Loans

Student Loans

A college education is one of the most important investments in your life. Please review the following information if you are considering a federal Direct Loan or a Direct PLUS Loan to help finance your education or your child’s at Lackawanna College.

Because grants and scholarships are limited, many students rely on student loans to cover educational expenses. Students who indicate an interest in loans on the FAFSA are automatically considered for loans. Although Lackawanna College awards students up to their maximum yearly eligibility, we encourage students to borrow wisely. Students transferring to a four-year school may run out of eligibility at the four-year school if they borrow too much at Lackawanna.

Federal Direct Subsidized and Unsubsidized Loans

The Federal Direct Loan interest rate for subsidized and unsubsidized loans is 5.50%, and there is a loan fee of 1.057% deducted from each loan disbursed on or after October 1, 2020.  This is the first loan option that students should consider as long as they are registered for 6 or more credits a semester (half-time enrollment). Repayment begins 6 months after the student ceases to be a half-time student. This loan may be subsidized or unsubsidized.


  • Based on financial need as determined by the FAFSA, other aid sources, and educational costs.
  • The federal government pays the interest on the loan while the student is enrolled at least half-time in school.


  • Not based on financial need.
  • The student pays the interest while in school or it can be capitalized into the principal thus increasing the amount owed.

Freshman may be eligible to borrow a maximum of $5,500, of which no more than $3,500 can be subsidized. Students who have earned 24 or more credits may be eligible for a maximum of $6,500 per year, of which no more than $4,500 can be subsidized. Independent students may be eligible for an additional maximum of $4,000 per year in unsubsidized loan funds.

Federal Direct PLUS Loan

The Federal Direct PLUS Loan is for parents of dependent students. A parent must not have an adverse credit history.  The loan amount is based on educational costs minus any other aid the student is receiving. The interest rate for the Plus is 8.05% first disbursed on or after July 1, 2023, and before July 1, 2024.  The loan fee of 4.228% deducted from each loan disbursed on or after October 1, 2020.

Lackawanna ds to the student’s school account to pay for tuition, fees, room and board, and other school charges. If any loan funds remain after the payment of tuition, fees, room and board, and other institutional charges, the credit refund can be issued at your request to you as the borrower or to your student.  Repayment usually begins 60 days after the final disbursement of the PLUS loan. A deferment is available while the student is enrolled in school.

A Dependent student’s whose parents are denied the Direct PLUS Loan may be eligible to receive an additional Unsubsidized Loan based on their academic level at the College.

Steps to Receive a Federal Direct Loans or a Direct PLUS Loan

A Master Promissory Note (MPN) needs to be completed if you wish to borrow through the federal Direct Subsidized and Unsubsidized Loans or for the Direct PLUS Loan program. The Master Promissory Note is a legal document. By signing the MPN, you promise to repay current and future federal loans. This note is valid for 10 years and does NOT require you to complete another MPN for subsequent borrowing unless you elect to attend another institution.

Please follow these simple steps to complete the Federal Direct Master Promissory Note (MPN) online:

  • Visit and follow the online instructions to get information and to apply.
  • You need to use your FSA ID and password (same as from the FAFSA). If you have not done so already, you can obtain an FSA ID at For questions regarding your FSA ID, please call 1-800-4FEDAID.
  • Sign your Master Promissory Note (MPN) electronically.

You will need this information to apply:

  • Social Security Number, date of birth, permanent home address, and driver’s license number.
  • The name of the colleges/universities you plan to attend.
  • The names, addresses, and telephone number of two separate references (Please note the references must NOT be living at the same U.S. address).

Federal Direct Loans and Direct PLUS Loans are guaranteed by the Department of Education. The loan funds will be delivered through Electronic Funds Transfer (EFT) directly to your student account. The first disbursement will occur 30 days into the semester.

Entrance Counseling

Federal Student Aid regulations require all federal Direct Loan borrowers to complete Loan Entrance Counseling before the first disbursement of your Federal Direct Loan. To complete this requirement, please visit and click on Loan Entrance Counseling. The purpose of the counseling is to make you aware of your rights and responsibilities associated with student loan borrowing.

Exit Counseling

Federal regulations require all federal Direct Loan borrowers to complete Loan Exit Counseling before your enrollment ends. To complete this requirement, please go online to and click on Loan Exit Counseling. The purpose of the counseling is to make you aware of your rights and responsibilities as you enter the repayment stage of student loan borrowing. Please note that the Loan Exit Counseling requirement must be met before receiving your diploma.

Alternative Loans

Private alternative loans are not part of the federal Direct Loan programs and should be used as a last resort. Students should first consider the federal Direct Loans and the Direct PLUS Loan program as they offer the lowest fees and interest rates. However, if those loan programs do not cover your educational expenses, you may want to consider the alternative loan option.

Students and their parents can review and compare alternative student loans option on ELM Select

Please feel free to contact the Office of Student Financial Services with questions regarding alternative loan options at (570) 961-7859 or by email at


Please use the following information to contact the FSA Student Loan Ombudsman Group.