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.
To apply for a Direct Student Loan, students must meet basic eligibility criteria:
Students must complete the following steps:
To apply for a Direct Parent Student Loan, students must meet the basic eligibility criteria listed above and parents must complete the following steps:
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
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.
In some cases, you may need to complete Direct Loan Entrance Counseling.
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.
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).
For additional information about Direct Loans, visit www.direct.ed.gov/student.html or the Financial Aid office for more information.
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