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Michigan Students First*
The Michigan Students First benefits applied to eligible Federal Stafford Loans, Federal PLUS Loans, and Grad PLUS Loans first disbursed and purchased between January 1, 2003 through April 17, 2008. Effective June 30, 2010, student loans with MHESLA will no longer become eligible for an interest rate subsidy from MHESLA. If a borrower's 36th payment is due on or before July 31, 2010, by making this payment on or before June 30, 2010, the loan may still qualify for the reduced interest rate benefit (all future payments must be made on time).
Through Michigan Students First (MSF) borrowers can lower the cost of their student loans with:
Payment or Reimbursement of the Federal Origination Fee
The federal loan origination fee was either paid on your behalf by your lender or your loan was credited with an amount equal to the origination fee after it has been fully disbursed.
Zero Percent (0%) Interest Rate
After the first 36 monthly on-time payments are received, the interest rate on your loan will be reduced to 0%.
The 0% interest rate will continue as long as your loan remains current. You can keep your loan current by payment, or if eligible, by deferment and/or forbearance.
Federal PLUS Loan 7.9% Reduced Interest Rate
The Federal PLUS Loan interest rate is fixed at 8.5% for loans disbursed on or after July 1, 2006. With Michigan Students First, these Federal PLUS Loan borrowers receive a reduced interest rate of 7.9% on their loans. PLUS loans were originally for parent borrowers. Effective July 1, 2006, graduate and professional students may also apply for a PLUS loan, often referred to as a Grad PLUS loan. Before applying, a graduate or professional student must first complete the Free Application for Federal Student Aid and must be eligible for his or her maximum loan amount under the Federal subsidized and unsubsidized Stafford Loan Program.
Michigan Students First Savings
Your savings depend on the amount of eligible student loans you have and the length of repayment.
Sign up for Electronic Payment Savings (EPS) and receive a one-quarter of one percent (.25%) interest rate reduction while making your first 36 monthly payments. Through EPS the amount of your monthly payment is automatically deducted each month from your checking or savings account. Once your interest rate has been reduced to zero, the .25% interest rate reduction no longer applies, but EPS still provides you with the convenience of automatic payments.
Federal Consolidation Loans do not qualify for the Michigan Students First program. Therefore, if you consolidate loans in the Michigan Students First program, you will lose the zero percent interest benefit. Please be aware that the current statutory interest rate, and not the zero interest rate, will be used to calculate the consolidation loan interest rate.
If you run into financial difficulties while paying back your student loan(s), the worst thing you can do is simply miss payments or habitually be late in making them. There are several repayment options including deferments and forbearances that borrowers should not miss out on.
Borrowers with additional questions should visit the MSF Frequently Asked Questions document.
For additional information, or if we can assist you in any way, please contact our office:
Lansing: (517) 373-3662
TTY callers may access our office through the Michigan Relay Service at 800-649-3777
* MHESLA reserves the right to revise or discontinue offering borrower benefit options at any time.
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