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CAMPUS ANNOUNCEMENT FOR DIRECT LOAN TRANSITION
The College is currently participating in the Federal Family Educational Loan Program (FFELP) for the Stafford and Parent PLUS loan programs and has been for many years. On March 30, 2010, President Obama signed the Health Care and Education Reconciliation Act (HCERA) of 2010, which included Title IV provisions from the Student Aid and Fiscal Responsibility Act. Specifically, the passage of HCERA converts all new federal student lending to the Department of Education's Direct Loan Program beginning July 1, 2010. Below are facts you need to know about the Direct Loan program:
- FFELP funds are disbursed through private lenders. The Direct Loan Program is funded by the Federal Government, eliminating the middle man.
- There are more repayment plans through the Direct Loan Program, specifically, the income contingent plan. Under this plan if a student does not repay their loans in 25 years, the government forgives the balance of the loan. In addition, the interest never exceeds 10% of the loan principle.
- Direct Lending has the new Public Service Loan Forgiveness program that will forgive remaining debt after 10 years of eligible employment and qualifying loan payments for people working in key public service professions such as teaching, government, social work, law enforcement, and non-profit 501 (c)(3) organizations.
- The Direct Loan program is fully integrated with the federal financial aid process, simplifying the administration and oversight of the government funds. The College already has the software and business processes in place to administer this program due to the other federal programs we administer.
- Students will only have to track their loans with one lender instead with multiple lenders.
- Reconciliation of the Federal Direct Loan program is required, and ensures that the students are receiving the funds and are only repaying what they actually received.
- Benefits advertised are part of the Master Promissory Note, unlike the benefits advertised with the FFEL program which are not a part of the FFEL promissory note. Borrowers are assured to receive borrower benefits only if they are part the signed promissory note.
- Loans can be sold in FFEL, negating their borrower benefits. Loans are never sold in the Direct Loan Program
- Direct Loans can be consolidated in the Direct Loan Program, or in the FFEL program. There is still a choice in repayment options for the College's students.
The college will begin the Direct Loan program in the summer of 2010. When award letters are sent to the students in the spring, new and returning students will be required to complete new entrance counseling and new Master Promissory notes for the Direct Loan Program. This can be done through this website under Printable Financial Aid documents. For further assistance, contact the Financial Aid office.
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