Direct Loan FAQ

Why did Helena College decide to switch to the Direct Loan Program?

Federal Direct lending provides the most stable source of loan funding available at this time because the funds are provided by the U.S. Department of Education.

How will this change affect my current loans?

All loans for the 2009-2010 academic year will continue to be processed as in the past. The change to the Direct Loan program will begin with loans for 2010-11. Any loans borrowed for the 2009-10 academic year or prior will remain with those lenders; they will not be converted to Direct Loans. For the 2010-11 academic year, borrowers will receive new loans directly from the U.S. Department of Education.

I have previously completed entrance counseling under the FFELP Program, do I have to complete Direct Loan entrance counseling?

Yes, you will be required to complete entrance counseling even if you have previously completed it for the Federal Stafford Loan program.

Do I have to complete another Master Promissory Note?

Yes, you must sign a new Direct Loan Master Promissory Note (MPN) because you will be borrowing from a new “lender”. The Direct Loan MPN is completely on-line. You will need to have your Federal PIN (used to complete the FAFSA) in order to electronically sign the MPN.

When do I complete a Direct Loan Master Promissory Note?

If you have borrowed a loan in the past, and plan to use a Federal Stafford Loan during 2010-11, you will need to complete a new MPN for Direct Loans. You can choose to complete the MPN at any time – whether or not you have received your Financial Aid Award Letter. Once you’ve completed your MPN, your loan will not be processed until after you have been awarded a loan and accepted it. You will have an opportunity to specify the precise amount of your loan when you accept it.

What happens if I have prior federal student loans through a lender, and now will have some through the Department of Education?

It is not unusual for a student to have loans from both Federal Stafford loan programs (FFEL & Direct). Any previous loans you borrowed from another lender may continue be maintained by the lender/servicer you selected upon signing your original MPN with the FFEL Program. Once your loans enter a repayment status, you can proceed in one of two ways:

  1. You can keep your loans separate – and make payment to your FFEL loans as well as a payment to your Direct Loans.
  2. You can take out a consolidation loan which combines both types of loans into a single loan – providing you with just one payment to one source.

I am a parent and plan to borrow a PLUS Loan for my student in 2010-2011. What should I do this year?

You should not apply through any lender other than the Department of Education. Application instructions for applying for a PLUS loan are provided by clicking here. After you apply for the PLUS loan, we will submit your information to the Department of Education for a credit check.

How do I contact the Direct Loan Program?

The U. S. Department of Education Direct Loan Program Customer Service phone number is 1-800-848-0979.
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