Federal Direct Loan Program
William D. Ford Federal Direct Loan Program
PrattMWP along with Pratt Institute transitions to the William D. Ford Federal Direct Loan Program effective July 1st, 2010 for the 2010 -2011 academic year.
On March 30 2010, President Obama signed into law the Health Care and Education Reconciliation Act of 2010 (HR 4872), a bill to eliminate the Federal Family Education Loan Program (FFELP) and have all federal student loans originated through the Department of Education's Direct Lending Program. Effective July 1st, 2010 Pratt Institute will join thousands of other college in the William D. Ford Federal Direct Loan (Direct Loan) Program.
Students and parents who previously received loans through the Federal Family Education Loan (FFEL) Program (private lenders) prior to July 1st 2010 will now borrow through the Direct Loan Program. The Direct Loan Program offers the same types of loans as the FFEL Program and Direct Loans generally 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 (7.9% 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
APPLYING FOR LOANS
New and Continuing Student Loan Borrowers Must Complete a Direct Loan MPN
If you intend to borrow Stafford Loan, Parent PLUS or Graduate PLUS loan funds beginning July 1st, 2010 or thereafter, you must complete 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 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 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 pin.ed.gov
First-Time Student Loan Borrowers Must Complete Direct Loan Entrance Counseling
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 FFEL or Direct Loan program loan at Pratt Institute, you must complete Direct Loan Entrance Counseling before you can receive a Direct Loan.
- If you are a graduate/professional student and have not previously received a PLUS loan through the FFEL or Direct Loan programs at Pratt Institute, you must complete Direct Loan Entrance Counseling before you can receive a Direct PLUS Loan.
You may complete Direct Loan Entrance Counseling electronically via Student Loans A Federal Student Aid PIN is required to complete online Direct Loan Entrance Counseling.
Contacts for the Direct Loan Program
Necessary Forms
- Complete and return the form you will receive regarding your Stafford Loan and the Parent PLUS Loan. This is a necessary step in the loan process. If you do not intend to take either loan please indicate that on the form and return it as well.
- If you are being asked for additional documentation, please return that as soon as possible along with the original request sheet that you will receive.
PrattMWP and Pratt Institute look forward to participating in the Direct Loan Program and offering the benefits of Direct Loans to our students. We are committed to providing our students and families with the necessary guidance and assistance as we aim to make this transition as seamless as possible.
For additional information about Direct Loans or contact the Financial Aid Office at 315-797-0000 ext. 2222 or email the Financial Aid Director at rhartson@mwpai.edu.
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310 Genesee Street
Utica, New York 13502
(800) 755-8920
(315) 797-0000 x2248
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