September 2, 2010

Loans

MVSU NEW STUDENT LOAN PROCESSES

DIRECT LOANS

IT'S MANDATORY -- DON'T MISS OUT!

Effective July 1, 2010, Mississippi Valley State University will begin participating and processing all federal student loans through the William D. Ford Loan Program. Student and parent borrowers will receive funding for their federal student loans directly from the U.S. Departmetn of Education rather than from private banks and other lending institutions. To sign your Direct Loan Master Promissory Note, go to www.studentloans.gov (SEE INSTRUCTIONS).

The Federal Direct Loan Program has been in existence since the 1990s. Several schools throughout the United States participate in the program. The federal eligibility requirements and repayment policies are the same as the Federal Family Education Loan Program (FFELP). With the implementation of the Direct Loan Program, all current student and parents will have to sign their Direct Loan Master Promissory Note (MPN) and complete Entrance Loan Counseling with the Department of Education. Direct Stafford and PLUS Loans will NOT disburse until an MPN has been signed and entrance counseling completed. We encourage all borrowers to sign their MPN now to experience the smooth transition that will occur.

INSTRUCTIONS for STUDENTS and PARENTS regarding the studentloans.gov site:

- Obtain or use your current PIN to sign in. Go to www.pin.ed.gov if you do not have one.

- Before you begin, you will be asked to verify your personal information. The personal information that will display is based on the information returned from the Federal Student Aid PIN Web site.

- You will then be asked, "What do you want to do?" At this point you can begin to:

1. Complete Entrance Loan Counseling and

2. Sign your Master Promissory Note.

The financial aid team at MVSU is here to assist in anyway possible. Please contact our office at 662.254.3335 or 3765 for information.

DIRECT LOANS

Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (the Department) rather than a bank or other financial institution.

With Direct Loans, you

  • Borrow directly from the federal government and have a single contact-the Direct Loan Servicing Center - for everything related to the repayment of your loans, even if you receive Direct Loans at differenct schools;
  • Have onlien access to your Direct Loan account information 24 hours a day, 7 days a week at Direct Loans on the Web at: www.dl.ed.gov.
  • Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you may switch repayment plans if your needs change.

TYPES OF DIRECT LOANS

The following Direct Loans are made through the William D. Ford Federal Direct Loan (Direct Loan) Program, which is administered by the U.S. Department of Education.

Direct Subsidized Loans

Are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period and during deferment periods.

Direct Unsubsdized Loans

Are not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.

Direct PLUS Loans

Are subsidized loans for the parents of dependent students and for graduate/professional students. PLUS Loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.

Parent eligibility requirements for a Direct PLUS Loan

You must be the student's biological or adoptive parent or the student's stepparent, if the biological or adoptive parent has remarried at the time of application. Your child must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. For financial aid purposes, a student is considered "dependent" if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid is submitted. (Exceptions are made for veterans, wards of court, and other special circumstances.) If a student is considered dependent, then the income and the assets of the parent have to be reported on the FAFSA.

Additional requirements to receive a PLUS loan

Parent PLUS loan borrowers cannot have an adverse credit history (a credit check will be done). In addition, parents and their dependent child must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs.

Direct Consolidation Loans

Eligible federal student loans can be combined into one Direct Consolidation Loan.


Your Rights

Before MVSU can make your first loan disbursement, you have the right to receive the following information about your federal student loan from your school, lender, and/or the Loan Servicing Center:

  • The full amount of the loan and the interest rate;
  • The date you must start repayment;
  • A Complete list of any charges you must pay (loan fees) and information on how those charges are collected;
  • Informtion about the yearly and total amounts you can borrow;
  • An explanation of default and its consequences; and
  • An explanation of available options for consolidating your loans and a statement that you can repay your loan(s) without penalty at any time.

Your Responsibilities

  • To receive entrance counseling before being given the first loan disbursement, and receive exit counseling before leaving school;
  • To understant that by signing the promissory note, the student is agreeing to repay the loan according to the terms of the note;
  • To make payments on the student loan even if the student does not receive a bill or repayment notice;
  • To make payments on the student loan even after applying for a deferment or forbearance, until notificaiton that the request has been granted; and
  • To notify the appropriate representative (institution, agency, or lender) that manages the student loan when the student graduates, withdraws from school, or drops below half-time status; changes his/her name, address, social security number, or transfers to another institution.

Entrance Counseling

Loan Entrance Counseling is a one time requirement for all first time borrowers of Federal Stafford and Federal Unsubsidized Stafford Loans. Student Loan funds can not be released until this requirement is met. Currently entrance counseling is performed in the Financial Aid Office.

Exit Counseling

Loan Exit Counseling is required if you:

  • Withdraw from school
  • Drop below half-time status
  • Graduate

Exit loan counseling is performed in the Financial Aid Office.