Direct Loan Program
All federal student loans are through the Direct Loan Program.
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 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.
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:
- 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)
What do I have to do to get my loan funds?
As in prior years, you must:
- 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.
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.
All First-Time Direct Loan Borrowers Must Complete Direct Loan Entrance Counseling and a Direct Loan MPN
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 10 years. You may complete a Direct Loan MPN electronically via the StudentLoans.gov website at studentloans.gov.
To complete a Direct Loan MPN electronically, you must have a FSA ID. The Federal Student Aid ID is the same ID used to complete the Free Application for Federal Student Aid (FAFSA). To apply for a FSA ID if you do not already have one, or for customer service regarding a previously assigned FSA ID, visit studentaid.ed.gov/sa/fafsa/filling-out/fsaid.
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 studentaid.ed.gov/sa/repay-loans/consolidation or call 800-557-7392 (TDD/TTY: 800-557-7395).
For additional information about Direct Loans visit studentaid.ed.gov/sa/types/loans or the Financial Assistance Department for more information.
Loan Counseling
Entrance & Exit Interviews
Students who borrow under the Federal Direct Loan Program (DL) are required to complete loan entrance counseling before receiving loan proceeds from their first loan and loan exit counseling before graduating or otherwise leaving school. Only complete one of the following counseling sessions, as appropriate, if you have been instructed by the CSM Financial Assistance Department to do so.
New Federal Direct Loan Recipients
If you recently applied for and have been approved by the CSM Financial Assistance Department for your first Federal Direct Loan, click here to complete Loan Entrance Counseling and your Master Promissory Note.
Federal Loan Exit Counseling
Exit Counseling is required when you graduate, leave school, or drop below half-time enrollment. Exit counseling provides important information you need to prepare to repay your federal student loan(s). Click here for Federal Direct Loan Exit Counseling.