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Direct Loans

Types of Aid

Students and parents who previously received loans through the Federal Family Education Loan (STAFFORD LOAN) Program will now borrow through the Direct Loan Program. The Direct Loan Program offers the same types of loans as the STAFFORD LOAN Program and Direct Loans generally have the same terms and conditions as STAFFORD LOAN Program loans, but instead of a bank lending the money, the U.S. Department of Education lends the money directly to students and parents. There are also some differences in the names of the loans. The 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.

How to Apply

To apply for a Direct Student Loan, students must meet basic eligibility criteria:

Complete a Free Application for Federal Student Aid or Renewal Application. You can submit the form online or pick up a paper copy in the Financial Aid Office.
Be a United States citizen or an eligible non-citizen.
Be admitted to or enrolled in an eligible degree or certificate program at the College.
Be making Satisfactory Academic Progress as defined by the College.
Not owe a refund on a federal student grant or be in default on a federal student loan.

Students must complete the following steps:

Complete Direct Student Loan Entrance Counseling.
Complete a Direct Student Loan Master Promissory Note
Complete and submit a Loan Request Form to the Financial Aid Office via mail, fax or in-person.

How to Apply for a Direct Parent Loan

To apply for a Direct Parent Student Loan, students must meet the basic eligibility criteria listed above and parents must complete the following steps:

Complete the Direct Parent Loan Promissory Note.
Complete and submit a Direct Parent PLUS Loan Request Form to the Financial Aid Office via mail, fax or in-person.

Benefits of the Direct Loan Program

Direct Loans have the same annual and aggregate loan limits, the same deferment and cancellation provisions, the same interest rates; and most of the same repayment plans (Standard, Graduated, Extended, Income-Based) as the Stafford Loan program. Direct Loans also have some benefits that are available only in the Direct Loan Program

Lower interest rate on Direct PLUS Loans (7.9% vs. 8.5% for Federal PLUS Loans)
Up-Front Interest Rebate
Income Contingent Repayment Plan (in addition to the Income-Based Repayment Plan)
Public Service Loan Forgiveness Program
No interest charged (for up to 60 months) during qualifying periods of active duty military service (for loans first disbursed on or after October 1, 2008

First-Time Direct Loan Borrowers

If you have not previously received a Direct Loan, you must complete a Direct Loan Master Promissory Note (MPN). A Stafford Loan 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. You also have the option of completing a paper Direct Loan MPN.

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

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 STAFFORD LOAN or Direct Loan program loan, you must complete Direct Loan Entrance Counseling before you can receive a Direct Loan.

You may complete Direct Loan Entrance Counseling electronically at https://studentloans.gov. A Federal Student Aid PIN is required to complete online Direct Loan Entrance Counseling.

Consolidating STAFFORD LOAN Program Loans into the Direct Loan Program

If you already have STAFFORD LOAN Program loans and will now be receiving Direct Loans, consolidating your STAFFORD LOAN and Direct Loan program loans together into a Direct Consolidation loan may make loan repayment easier. If you consolidate, you will have just a single monthly payment. Consolidating your STAFFORD LOAN Program loans into a Direct Consolidation Loan may also allow you to take advantage of certain benefits that are offered only in the Direct Loan Program, such as Public Service Loan Forgiveness and the Income Contingent Repayment Plan.

To learn more about when you may consolidate; the pros and cons of doing so, and the application process, visit www.loanconsolidation.ed.gov or call 800/557-7392 (TDD/TTY: 800/557-7395).