By Kathy Lynch
The University of Louisville has decided to make changes to the current loan process for students and their parents when applying for loans. This decision will not only simplify the loan process, but more importantly save money for students and their families.
Effective the fall semester 2009, U of L will be offering the usual Stafford and PLUS loans funded by the Federal Direct Loan Program, which the U.S. Department of Education acts as the lender. Currently these loans are offered through lenders in the Federal Family Education Loan Program, FFELP, according to the financial aid office. The FFELP has several lenders, and some students had to switch lenders when preparing for the current school year because their lenders dropped from the FFELP program or discontinued making loans for a period of time because of the credit situation.
“Borrowing from the federal government is the best solution for student loans at this time,” said Patricia O. Arauz, executive director of the U of L Student Financial Aid Office. “It is consistent with our need to ensure a high-quality, cost-effective, dependable loan program for U of L families.”
Arauz said since the loans are being borrowed directly through the federal government, the availability of loans are not expected to be affected by credit market turmoil.
Students and their parents who want to take advantage of this new program need to start the process now for the fall semester.
According to Arauz students and their parents should do the following:
Find your PIN – Students will be required to have their U.S. Department of Education PIN, this is the same PIN used for filling out the FAFSA electronically.
Complete the entrance counseling online at http://www.dl.ed.gov. Although students must complete entrance counseling, Parents do not have to fill this out. For those who are grad or professional students and plan to borrow both Stafford and Plus loans, select the option for the Combination Stafford and PLUS LOANS entrance counseling.
Complete the new MPN online at http://dlenote.ed.gov/empn/index.jsp. Those who completed the Combination entrance counseling, two promissory notes must be signed, one for each. Parents borrowing through the Parent Plus loan program must select the MPN for the Parents Plus Loan. And, all students will sign their MPN.
It is necessary for each student or parent to sign the mandatory promissory note.
“We don’t want students to come back to school in August and not have their loan money because they have not completed the Federal Direct Loan Counseling and Master Promissory Note,” said Arauz.
According to Arauz, the biggest problem encountered by other schools who have already switched to the DL program was getting the student to understand they must complete a new MPN and new entrance counseling.
See the information to the right supplied by the Direct Student Loan Coalition to compare the programs.
