Direct Loan Information
All Federal Students Loans are Through The Direct Loan Program - As of Fall 2010
As of the Fall 2010 semester The College of Southern Maryland (CSM) started to participate in the William D. Ford Federal Direct Loan Program. Students and parents who previously borrowed 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. Generally, Direct Loans 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 studentís school. There are also some differences in the names of the loans. The FFEL Programís 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.
Benefits of the Direct Loan Program
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, Income-Based). The interest rates for FFEL Program Stafford Loans and Direct Subsidized and Unsubsidized Loans are also the same. Direct Loans also have some benefits that are available only in the Direct Loan Program:
What do I have to do to get my loan funds?
- Lower interest rate on Direct PLUS Loans (7.21% 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
As in prior years, you must:
All First-Time Direct Loan Borrowers Must Complete Direct Loan Entrance Counseling and a Direct Loan MPN
- Complete the FAFSA (Free Application for Federal Student Aid).
- Provide any documents requested by the Financial Assistance Department (FAD).
- Be meeting SAP guidelines. For more information about this, click here.
- Go to the Direct Loans website and sign in using your Federal Student PIN and complete the following sections: 1.) Complete Entrance Counseling and 2.) Complete Master Promissory Note
- Attend a Direct Loan Information Session conducted by FAD staff at the campus closest to you, or complete the online session available here.
Note: You must complete the online or in person Direct Loan Information Session before the Financial Assistance Department will process any loan requests for the current academic year, even if you have a previous loan at CSM.
If you have not previously received a Direct Loan, you must complete Direct Loan Entrance Counseling and 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 borrow a Direct Loan.
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
Consolidating FFEL Program Loans into the Direct Loan Program
If you already have FFEL Program loans and will now be receiving Direct Loans, consolidating your FFEL 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 FFEL 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 consolidation, 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 http://www.direct.ed.gov/student.html
or the Financial Assistance Department for more information.