Skip to main

Loans

On average, college graduates earn $1 million more in earnings over their lifetime than high school graduates. Though we realize that it can be daunting to think about borrowing money to attend college, the financial benefits of a college degree are clear. 

 

Loans can be an important part of funding your undergraduate or graduate education. More than 70% of all college undergraduates use loans to help them attain their educational goals, and when taken responsibly, loans can be a helpful tool in financial planning.

Learn More About Federal Loans
Professor interacting with students in Budapest classroom.

Federal Loans

The first step in acquiring federal loans (including federal Parent PLUS Loans) is completing the FAFSA. Once submitted, your loan eligibility will be determined.

Student Loans

Students can take out federal student loans from the Direct Loans program. Direct Loans offer a low, fixed interest rate and flexible repayment terms. Eligible undergraduates may receive federal direct subsidized interest loans, which means interest does not accrue while the student is enrolled in college. A loan origination fee is deducted from the federal loan amount before the funds are sent to the school. 

There are two types of Federal Direct Loans:

Federal Direct Subsidized Loans (undergraduate only)

  • Available to undergraduates with demonstrated financial need
  • Federal government pays the interest while in school, during the grace period, and during periods of authorized deferment

Federal Direct Unsubsidized Loans

  • Available to undergraduate and graduate students, regardless of financial need
  • Student pays all interest that accrues

Federal Direct Loan benefits:

  • Fixed interest rate 
  • No payments while enrolled in school at least a half-time and during the 6-month grace period
  • Eligibility not based on credit
clock Created with Sketch.

The Federal Loan Website

Taking out loans requires multiple steps, including Entrance Counseling, signing a Master Promissory Note (MPN) and more. You'll do each of those steps on the federal loan website.

Go To StudentAid.Gov

Federal Student Loan Changes Resulting From the One Big Beautiful Bill Act

Beginning July 1, 2026, changes resulting from the One Big Beautiful Bill Act require federal student loan amounts to be prorated for certain students who are enrolled less than full-time or who receive a federal loan for only one term of an academic year.

Part-Time Enrollment Loan Proration

For undergraduate students

Full-time enrollment is 12 credits for the Fall and Spring semester, or 24 credits for the academic year.

When an undergraduate student is enrolled in fewer than 24 credits across the Fall and Spring semesters, their annual federal loan eligibility must be reduced proportionally based on their enrollment. For Graduate students, full-time enrollment is 6 credits for the Fall and Spring Semester, or 12 credits for the academic year.

For Graduate Students

When graduate students are enrolled in fewer than 12 credits across the Fall and Spring semesters, their annual federal loan eligibility must be reduced proportionally based on their enrollment.

Schedule of Reduction Calculation:

Annual Loan Amount Eligibility × (Student's Total Academic-Year Enrollment ÷ Full-Time Academic-Year Enrollment) = Adjusted Annual Loan Eligibility

Single-Term Loan Proration

In addition to proration based on less-than-full-time enrollment, the One Big Beautiful Bill Act also includes changes affecting students who receive a federal loan for only one term of an academic year.

A student who attends for only one term — such as Fall only, Spring only, or Summer only — may be subject to a loan proration calculation. In these situations, the student's annual loan eligibility must be adjusted based on the portion of the academic year for which the student is enrolled.

Students graduating in December or otherwise attending for only a portion of the academic year:

The single-term proration calculation will be reviewed based on the student's specific enrollment and loan period.

Example 1: Undergraduate Full-Time Enrollment

An undergraduate student enrolls in 12 credits for the Fall semester and 12 credits for the Spring semester, for a total of 24 credits during the academic year.

  • Full-time enrollment: 24 credits
  • Student enrollment: 24 credits
  • Enrollment percentage: 24 ÷ 24 = 100%
  • Annual loan eligibility: 100% of the applicable annual loan limit

Because the student is enrolled at 100% of the full-time enrollment level, no loan proration is required based on enrollment.

Example 2: Undergraduate Full-Time Fall and Part-Time Spring Enrollment

An undergraduate student enrolls in 12 credits for the Fall semester and 6 credits for the Spring semester.

  • Full-time enrollment for the academic year is 24 credits (12 credits per semester).
  • Fall enrollment: 12 credits
  • Spring enrollment: 6 credits
  • Total enrollment: 18 credits
  • Full-time academic-year enrollment: 24 credits
  • Enrollment percentage: 18 ÷ 24 = 75%

Because the student is enrolled in 18 out of 24 full-time credits, their federal loan eligibility must be reduced proportionally.

For example, if the student's applicable annual loan limit is $5,500:

$5,500 × (18 ÷ 24) = $4,125

Therefore, the student's adjusted annual loan eligibility would be $4,125.

  • Fall: $2,750
  • Spring: $1,375
  • Total: $4,125

Parent PLUS Loans

Parents of dependent undergraduate students borrow the federal Parent PLUS Loan to help their children pay for college. The federal Parent PLUS Loan offers a fixed interest rate and flexible loan limits. To be eligible, a parent can’t have an adverse credit history. Federal Parent PLUS Loans have a  origination fee that is assessed.

Previously, parents could borrow up to the full Cost of Attendance. Effective July 1, 2026, parents are now limited to an annual maximum of $20,000 and a lifetime maximum of $65,000 per student. To ensure your student has the financial support they need to reach graduation, utilize the Balanced Borrowing Strategy shown below.

If you borrowed a Parent PLUS loan for your student for a term beginning before July 1, 2026, you may be eligible to continue borrowing under the old limits for up to three years or until program completion.
Academic YearBalanced Borrowing Strategy (Recommended)Unbalanced Borrowing Strategy (Annual Cap Per Year)
Freshman Year$16,250$20,000
Sophomore Year$16,250$20,000
Junior Year$16,250$20,000
Senior Year$16,250$5,000 (Remaining Eligibility)
Total Borrowed$65,000$65,000
ResultEven PLUS loan aid all four yearsA gap of $15,000 senior year compared to previous years

Graduate PLUS Loan

Beginning July 1, 2026, Graduate PLUS Loans are no longer available to new graduate or professional student borrowers.

The federal Grad PLUS Loan is a federal student loan available to students attending graduate school and professional school. The federal Grad PLUS Loan offers a fixed interest rate and flexible loan limits. To be eligible, a student can’t have an adverse credit history. A loan origination fee is deducted from the loan amount before the funds are sent to the school. 

Students who meet the federal legacy provisions may continue to be eligible for a Graduate PLUS Loan. Eligibility is generally limited to students who were enrolled in the same graduate or professional program and received a Direct Loan before July 1, 2026, subject to federal requirements

If you believe you may qualify under the legacy provisions and need additional federal loan funding beyond your Federal Direct Unsubsidized Loan eligibility, please contact the McDaniel College Financial Aid Office before applying for a Graduate PLUS Loan.

Important: Graduate PLUS Loans are not available to new borrowers who do not meet the federal legacy provisions. For questions about your eligibility, please contact the Financial Aid Office at 410-857-2233 or finaid@mcdaniel.edu.

Alternative Loans

You have the freedom to borrow from any lender of your choice; you're not restricted to this list. To apply for a private loan not listed, you should apply directly with that lender. As part of your application, your lender will require you to complete a Private Loan Self-Certification Form. This form will be provided by your lender. Or you can access it here: https://www.mcdaniel.edu/media/6788

After school certification, it takes approximately 7-10 business days to receive the funds. We recommend applying about 60 days prior to the requested semester. Applying earlier might risk your credit check expiring before processing, while applying late could lead to disbursement delays.

McDaniel College adheres to its Student Lending Policy.

Selecting a Private Loan Lender can be difficult. McDaniel College offers a tool called FAST Choice, enabling you to compare and research terms and conditions from various lenders before applying for a private loan. The list features the most utilized lenders at McDaniel College in the past year. These lenders provide competitive products, excellent customer service, inclusivity, online processing, and the ability to handle disbursements and refunds via electronic funds transfer (EFT) through Great Lakes, ensuring timely fund distribution. Lenders also use Great Lakes to provide detailed loan record information to McDaniel College for accurate account details. This list is evaluated annually. You can choose any lender; you're not limited to this list.

Private/Alternative loans are not subsidized by the government and are subject to lender approval, including a credit check. Private loans should be considered only after exhausting all other available financing options. We encourage all students to complete the FAFSA to explore Federal and State aid programs that might offer more favorable terms than private education loans.

Lender disclosures for those on McDaniel College's preferred lender list can be found in FAST Choice. Individual lender disclosures are accessible by selecting one or more lenders in FAST Choice, then choosing "compare." Please see the link to the lender list below.

https://choice.fastproducts.org/FastChoice/home/210900/1

clock Created with Sketch.

The Federal Loan Website

Taking out loans requires multiple steps, including Entrance Counseling, signing a Master Promissory Note (MPN) and more. You'll do each of those steps on the federal loan website.

Go To StudentAid.Gov
McDaniel College
2 College Hill
Westminster, MD, 21157
© McDaniel College All Rights Reserved