PSU Changes Student Financial Aid Opportunities
Beginning with the 2009-10 academic year, PSU will be participating in the Federal Direct Loan program. After researching and comparing two federal loan programs—PSU’s current Federal Family Educational Loan Program (FFELP) and the Federal Direct Loan program (Direct Loans)—it became evident that the Direct Loan program would better serve students for a variety of reasons.
With this change, students will borrow directly from the Federal Government.
Please note: All new and returning students will need to complete and sign (or resign) their Master Promissory Note (MPN) for the Federal Direct Loan program. Visit the Direct Loan Master Promissory Note Web site to resign your MPN. Directions on how to set up your Direct Loan Master Promissory Note are available on the Financial Aid Web site.
Resign your MPN by Friday, March 13, 2009, and you’ll be entered into a drawing to win one of five $100 cash prizes! All degree-seeking students who are returning to PSU for 2009-2010 are eligible.
How does this affect you?
- 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.
- Added Repayment Plan: There is an additional repayment plan option through the Direct Loan program. The income contingent plan bases your monthly payments each year on your adjusted gross income. 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 percent 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.
- Smoother Delivery of Loan Funds: 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.
- One Lender: Students will be able to track their Direct Loans with one lender and in one location.
- Loans Never Sold: Loans can be sold in FFELP. Loans are never sold in the Direct Loan program.
- Consolidation Choice: 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.
The Financial Aid Team is excited about this change in access of loan funds and is looking forward to its positive impact on students. Contact the Financial Aid Team with any questions regarding the Federal Direct Loan Program.