Direct Loan Transition
Updated: May 10, 2010
Recent legislation eliminates the Federal Family Education Loan Program (FFELP) that Regent University has used since 1996 to provide federal loan funds to students. As a result, Regent will begin participating in the William D. Ford Direct Loan Program (DL) beginning with all loans disbursed after July 1, 2010.
In the coming weeks and months, Central Financial Aid will keep all current loan borrowers updated of any changes that significantly impact you. Please feel free to bookmark this page as it will be periodically updated with new information related to the direct loan transition.
Below are some frequently asked questions to help explain the new loan program. If after reading this, you have questions or concerns, please feel free to contact the Central Financial Aid Office for more details.
You may also watch a series of videos related to the direct loan transition on our Financial Aid TV website.
What is the Federal Direct Loan Program?
The Direct Loan Program provides “low-interest” loans for students and parents to help pay for the cost of education after high school. The Department of Education serves as your lender for all federal loans (Subsidized and Unsubsidized Stafford Loans, Graduate Plus Loans, and Parent Plus Loans). These loans were previously processed under the FFEL Program which required students to select a private lender who funded the federal loan for the student.
What do I need to do?
Complete a new Master Promissory Note (MPN) at www.studentloans.gov for all loans you will be pursuing: Stafford, Parent PLUS or Graduate PLUS. You will need your FAFSA PIN to access this site. Parents completing the PLUS Loan application will use their individual PIN. Students must complete a new MPN, even if they recently completed an MPN on a lender's website.
What is the difference between DL and FFEL?
The main difference is the source of funding. Under the FFEL Programs, student loan capital was provided by private lenders while under the DL Program the funds are provided by the Department of Education through the U.S. Treasury. Also, in the DL Program the interest rate on the Grad Plus and the Parent PLUS Loans are 7.9 percent instead of 8.5 percent.
Will my annual loan limits remain the same?
Yes, the annual loan limits are the same in the DL and FFEL Programs.
Can I keep my current lender?
No. All future loans will be originated, disbursed and serviced by the Department of Education and their appointed servicers.
Do I have to complete a new Master Promissory Note?
Yes, you need to complete a new Direct Loan Master Promissory Note (MPN), because you will now have a new lender. Access www.studentloans.gov to complete a new MPN for all federal loans you are pursuing. You will need your Federal PIN that was used to complete the FAFSA in order to e-sign the MPN.
If I have loans under both the FFEL and DL Programs, will I have to make payments to two different lenders?
Yes. Depending on how many FFEL lenders you utilized in the past, you will have to make payments to at least two different lenders (your FFEL lender and the Department of Education). However, you may consolidate all federal loans into a direct loan consolidation and only make payments to the Department of Education. For more information on direct loan consolidation, please visit the Direct Loan Consolidation website.
How do I apply for my 2010/11 loans?
The first step is to complete the 2010/11 FAFSA at www.fafsa.gov if you haven’t done so. The process will be the same as in prior years, except all students must complete a new MPN for their federal loans. We are working diligently to make this transition as seamless as possible. We appreciate your understanding and patience during this transition period. We encourage you to contact us with any questions or concerns you have.
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