On June 26, 2014 the following letter was mailed to MCU students who have had interaction with the Federal Student Loan program from August 1 2013 - June 30, 2014.
NOTICE TO STUDENTS
June 26, 2014
You are receiving this notice because you have a remaining balance owed to Mid-Continent University for previous educational services which you have received. Mid-Continent University is a non-profit institution and amounts collected in payment for educational services are used to continue the institution’s mission and do not and cannot as a matter of law enrich any individual or entity.
As you may be aware, MCU is experiencing a difficult financial situation, in large measure the result of the U.S. Department of Education not approving certain documentation necessary for the University to receive payment on Federal Direct Loans and Federal Pell and Federal Supplemental Educational Opportunity Grants (SEOG) intended to defray the costs of your MCU education (and the education of others like you) during the period from August 13, 2013 to June 30, 2014. However, instead of exercising our legal right to require immediate payment of your unpaid balance, MCU has decided that in fairness to our students who assumed they would pay for their educational program over time, the University will offer you an interest-free institutional loan, to be repaid over a period of 10 years, in the remaining amount of your balance due to the institution. This institutional loan will be for the exact amount you remain obligated to pay MCU, after applying any Pell and SEOG you received or to which you would have been entitled. Mid-Continent University will therefore provide you with an MCU Institutional Grant in the amount exactly equal to the Pell and SEOG to which you would have been entitled but did not receive. You will not be charged any origination fees or incur any costs in receiving this loan. The loan will be repayable over the span of ten years, in equal monthly installments. This calculates to a monthly repayment amount of $8.33 per $1,000 of loan.
As at no time will any interest be charged, you can estimate the substantial savings you can obtain by visiting the Repayment Estimator website at https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action.
Repayment on this loan will begin the month following your agreeing to its terms. As it is directly paying your MCU balance there is no further grace period. There will also be no automatic deferment or forbearance as in the case of a Federal Direct Loan. However, should your circumstances warrant, the University will consider such assistance on a case-by-case basis.
You will be receiving documents you will need to sign in order to receive this interest-free loan, along with documentation describing in detail the amount you owe MCU. In the event that we do not receive a response from you, we will assume that you have made other arrangements to pay the amounts due to the institution for the education you have received.
If you have any questions about this, you may contact Mid-Continent University at 270-247-8521. Please visit the MCU website on a regular basis to remain updated on important information for students.
R. Tom Walden, PhD