Notice to All Student and Parent Borrowers: Participation in the Direct Loan Program Begins July 1, 2010
Drew University will participate in the William D. Ford Federal Direct Loan (Direct Loan) Program began on July 1, 2010. Students and parents who previously received loans through the Federal Family Education Loan (FFEL) Program will now borrow through the Direct Loan Program. The Direct Loan Program offers the same types of loans as the FFEL Program and Direct Loans generally have the same terms and conditions as FFEL Program loans, but instead of a bank lending the money, the U.S. Department of Education (the Department) lends the money directly to students and parents through the student’s school. There are also some differences in the names of the loans. The FFEL Program’s Federal Stafford Loans (subsidized and unsubsidized) are called Direct Subsidized Loans and Direct Unsubsidized Loans in the Direct Loan Program. Federal PLUS Loans are called Direct PLUS Loans.
Direct Loans and FFEL Program loans have the same annual and aggregate loan limits, the same deferment and cancellation provisions, and most of the same repayment plans (Standard, Graduated, Extended, and Income-Based). The interest rates for FFEL Program Stafford Loans and Direct Subsidized and Direct Unsubsidized Loans are also the same. Direct PLUS Loans have a slightly lower interest rate that FFEL PLUS Loans.
First-Time Direct Loan Borrowers Must Complete a Direct Loan MPN
If you have not previously received a Direct Loan, you must complete a Direct Loan Master Promissory Note (MPN). Although you may have previously signed an MPN to receive FFEL Program loans, a FFEL MPN cannot be used to make Direct Loans.
The MPN is the legal document through which you promise to repay your Direct Loans and any accrued interest and fees to the Department. It also explains the terms and conditions of your loans. A Direct Loan MPN can be used to make loans for up to ten (10) years. You may complete a Direct Loan MPN electronically via the StudentLoans.gov Web site at https://studentloans.gov.
To complete a Direct Loan MPN electronically, you must have a Federal Student Aid PIN. The Federal Student Aid PIN is the same PIN used to complete the Free Application for Federal Student Aid (FAFSA). To apply for a PIN if you do not already have one, or for customer service regarding a previously assigned PIN, visit www.PIN.ed.gov.
First-Time Student Loan Borrowers Must Complete Direct Loan Entrance Counseling
In some cases, you may need to complete Direct Loan Entrance Counseling.
- If you are an undergraduate or graduate/professional student and have not previously received a FFEL or Direct Loan program loan, you must complete Direct Loan Entrance Counseling before you can receive a Direct Loan.
- If you are a graduate/professional student and have not previously received a PLUS loan through the FFEL or Direct Loan programs, you must complete Direct Loan Entrance Counseling before you can receive a Direct PLUS Loan.
Types of Loans
- Perkins Loans
- Federal Direct Student Loans
- Direct PLUS Loans
- Private Educational Loans
- United Methodist Loans
- Payment Schedules
- Entrance/Exit Interviews
- Loan Problems