Plymouth State University will change access to federal loans in order to secure low-cost student loans under a new program adopted by the University’s Financial Aid office. Beginning with the 2009-10 academic year, PSU will be participating in the Federal Direct Loan program.
Currently, PSU uses the Federal Family Educational Loan Program (FFELP). However, after thoroughly researching the best options for PSU students and their parents, PSU decided to participate solely with the Direct Loan program. Financial Aid Director June Schlabach said the switch has many benefits for students seeking loans.
“We are excited about providing better access to federal loans for our students and parents beginning with the 2009-10 academic year,” said Schlabach.
The Direct Loan program benefits include:
• Access to Funds- The Direct Loan program is funded directly by the Federal Government, eliminating the concern for access of funds from banks and other lenders who may be exiting the FFELP program. PSU has chosen to participate in a loan program which will have funds available – Direct!
• Lower Costs to Parents-The Federal PLUS Loan is available through the Direct Loan program at a lower cost to parents. Parents of dependent students are able to access Federal PLUS at 7.9% interest with Direct Loans versus 8.5% in FFELP.
• Added Repayment Plan- There is an additional repayment plan option through the Direct Loan program, specifically, the income contingent plan. The government forgives the balance of the loan if it is not repaid after the 25th year of being in repayment. In addition, the interest never exceeds 10% of the loan principle.
• Public Service Forgiveness- For PSU graduates working in key public service professions such as teaching, government, social work, law enforcement, and non-profit 501(c)(3) organizations, Direct Loans have a new Public Service Loan Forgiveness program that will forgive remaining debt after 10 years of eligible employment and qualifying loan payments.
• Easier Delivery of Loan Money- The Direct Loan program is fully integrated with the federal financial aid process, simplifying the administration and oversight of the loan funds. PSU has the technology and business process in place to administer this program which is similar to other federal programs we administer.
• Single Lender- Students will be able to track their Direct loans with one lender and in one location.
• Loan Consolidation- All federal loans can be consolidated to the Direct Loan program, or to the FFELP program. There is still a choice in repayment options for PSU students.
PSU junior Jordan Wilkinson, an Auburn, N.H., environmental science major, said the change in the federal loan program is great news.
“It’s exceptionally important to have a lower cost loan since it will literally cost less to repay upon graduation, and with the economy being “iffy” at best, it’s coming not a moment too soon,” Wilkinson said. “This benefits PSU students as the entire process becomes simpler; there is only one lender and students are assured of receiving the funds quickly and efficiently from the government, to PSU, at a lower cost.”
With this change in students borrowing directly with the government, all new and returning students will need to complete and sign (or resign) their master promissory notes for the Federal Direct Loan program.
PSU is the only institution in the University System of New Hampshire to adopt the Federal Direct Loan program.
For more information about this release, contact Bruce Lyndes, PSU Media Relations Mgr., (603) 535-2775 or Bruce Lyndes