FEDERAL DIRECT STUDENT LOAN

EFFECTIVE 2009-10,  PSU is pleased to announce that we will be participating in the Federal Direct Loan Program (DL) and will no longer process any loans through the Federal Family Education Loan (FFELP) Program. 

Why did we make this change to DL?  PSU is committed to having access to a stable source of educational loans.  With the DL Program, PSU is able to assess funds directly from the US Government so that our students will not have delays in receiving their federal loan funds.

Federal Direct Loans (William D. Ford Direct Student Loans)

TWO (2) STEPS ARE REQUIRED:  Students are required to complete:

         1.  ENTRANCE COUNSELING SESSION

         2.  MASTER PROMISSORY NOTE (MPN)

Student loans are the major form of self-help aid available to PSU students with at least half-time enrollment in a degree seeking program (6 credits per semester for undergraduates or a Frost School Department of Education approved certificate program). Loans are available through the Federal Direct Loan Program.

There is a loan fee of 2% of the principal amount charged for each Direct Subsidized or Unsubsidized Loan that you borrow. The total fee is reduced to 1/2% due to an up front interest rebate equal to 1.5% of the loan amount.  To retain this up front rebate, when a student starts to repay their loan, they must make their first 12 consecutive payments on time. This fee helps reduce the cost of making these low-interest loans.   The fee and rebate will be applied before you receive any loan money.

The U.S. government is the lender under this Direct Loan program. All repayments will also be made back to the U.S. government through Borrower Services at the Direct Loan Servicing Center.  

 

Not sure how much your monthly payments will be? Use one of our repayment calculators to help you plan - www.finaid.org or www.ed.gov

Note: The longer your loan is in repayment, the more interest you will pay. Calculations are estimates. Values may not reflect the actual amount computer by the Direct Loan Servicing Center.

Federal Direct Parent Loans for Undergraduate Students (PLUS) are also available for parents of dependent students and information on Direct Consolidation Loans is available once students graduate.

Beginning with the 2009-2010 academic year, ALL students borrowing from the Federal Direct Loan Program must re-sign a Master Promissory Note (MPN) for their Direct Loan.  This means that students who had previously completed an MPN for their FFELP Stafford Loan will need to complete a new one for DL if borrowing for 2009-10.   This Direct Loan MPN is valid for ten years.

The online Master Promissory Note (MPN)  must be completed before funds can be credited to your term bill generated by PSU's Bursar's Office. This MPN can be signed with your federal PIN. To retrieve or apply for your federal pin, go to http://www.pin.ed.gov.

The on-line Entrance Counseling session assures that you understand your rights and responsibilities in using federal loans.   Before DL funds are credited to your term bill generated by PSU's Bursar's Office, this Entrance Counseling must be completed.

The Federal Direct loan awarded may be subsidized and/or unsubsidized, as described below:

A subsidized Federal Direct loan is awarded on the basis of financial need.  Interest is are not charged  until you begin repayment or during deferment periods.

An unsubsidized Federal Direct loan is not awarded on the basis of need. You will be charged interest from the time the loan is disbursed until it is paid in full. If you allow the interest to accrue (accumulate) while you’re in school, or during other periods of non-payment, it will be capitalized. This means the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.

Federal  Direct Loan Limits Authorized by Ensuring Continued Access to Student Loans Act of 2008 (H.R. 5715) Effective for Federal Direct loans first disbursed on or after July 1, 2008
Academic Grade Level/Lloan Type	Maximum Loan Amount
First-Year Undergraduates	Dependent Student	Independent Student or Dependent Student Whose Parent is Ineligible for Federal Direct PLUS
Base Direct Loan eligibility (subsidized and unsubsidized)	$3,500	$3,500
Additional unsubsidized Direct Loan eligibility	$2,000	$6,000
Maximum First-Year Total	$5,500	$9,500
Second-Year Undergraduates
Base Direct Loan eligibility (subsidized and unsubsidized)	$4,500	$4,500
Additional unsubsidized Direct Loan eligibility	$2,000	$6,000
Maximum Second-Year Total	$6,500	$10,500
Third- and Subsequents-Years Undergraduates
Base Direct Loan eligibility (subsidized and unsubsidized)	$5,500	$5,500
Additional unsubsidized Direct Loan eligibility	$2,000	$7,000
Maximum Third- and Subsequent-Years Total	$7,500	$12,500
Frost School Certificates:               TESOL (Must enroll minimum of 6 credit hours for eligibility.)
Base Direct Loan eligibility (subsidized and unsubsidized)	$3,500	$3,500
Additional unsubsidized Direct Loan eligibility	$2,000	$6,000
Maximum Frost School Certificates Total	$5,500	$9.500
Graduate and Professional Students
Base Direct Loan eligibility (subsidized and unsubsidized)	N/A	$8,500
Additional unsubsidized Direct Loan eligibility	N/A	$12,000
Maximum Graduate and Professional Total	N/A	$20,500
Aggregate Loan Limits
Dependent Undergraduate Student	$31,000 (no more than $23,000 of which may be subsidized)
Independent Undergraduate Student or Dependent Student Whose Parent Is Ineligible for Federal Direct PLUS	$57,500 (no more than $23,000 of which may be subsidized)
Graduate/Professional Student *	$138,500 (no more than $65,500 of which may be subsidized)

If your class level changes during the year, you may be eligible for an increase in your Federal Direct Loan. If you wish to request an increase in your loan amount, please contact us via email or stop by our office to present the request in writing. For example, a second year student might begin the fall semester with 19 credits and have a Federal Direct Loan of $3,500. During the fall semester, the student earns 12 credits, for a total of 31 credits by the beginning of the spring semester. The spring loan award could then be increased from $1,750 to $2,250 upon request.

The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans. 

You may access your prior loan information on the National Student Loan Data System (NSLDS) website at: www.nslds.ed.gov. This site contains all of your federal Title IV aid history.