Federal Direct Stafford Loans
Beginning with the 2010-11 academic year, Southern Vermont College will be participating in the William D. Ford Direct Loan program for Federal Stafford loans. Student and parent borrowers will receive funding directly from the U.S. Department of Education rather than private lending institutions as they did previously through the Federal Family Education Loan Program (FFELP).
What are Direct loans?
Direct Loans are federally insured, low-interest education loans for students and parents. These include the Direct Subsidized Loan, the Direct Unsubsidized Loan, and the Direct Parent Loan for Undergraduate Students (PLUS).
Why is Southern Vermont College changing to the Direct loan program?
As a result of the Health Care and Education Reconciliation Act of 2010 (HCERA), no new Federal student loans will be made under the Federal Family Education Loan (FFEL) Program as of June 30, 2010. Commencing for the 2010-11 academic year, Southern Vermont College will be participating in the William D. Ford Federal Direct Loan program for Federal student and parent loans, including the Stafford and Parent PLUS loan.
Does this change impact me?
For a new or continuing student or parent borrower who plans to borrow a Federal loan for the 2010-2011 academic year, this change will affect them. After the 2009-2010 academic year, Southern Vermont College will no longer process any loans through the Federal Family Education Loan Program. The student will be required to complete a new Master Promissory Note at www.studentloans.gov
What are the benefits of Southern Vermont College students will receive from this change?
The Direct Loan Program is funded directly by the Federal Government which eliminates some of the confusion by offering a single source and process for Federal student loans.
Direct Loans are not sold so borrowers will know who holds their loans during repayment. Additionally, borrowers can consolidate their existing FFELP loans with their Direct Loans, enabling them to make one payment to one lender.
The Direct Loan Program offers a Public Service Loan Forgiveness program and an income-based repayment option for students in certain public professions or who have low incomes.
The interest rate for Direct Parent PLUS loans is 7.9% as opposed to 8.5% in the FFELP program. This is a considerable savings for parents and graduate students.
What do I need to do to apply for a Federal Direct Stafford loan?
First, a Free Application for Federal Student Aid (FAFSA) must be completed at www.fafsa.ed.gov.
First-time borrowers will need to complete the Stafford Entrance Counseling and Master Promissory Note (MPN) at www.studentloans.gov. Once both items are complete, the Financial Aid Office will be notified by the US Department of Education.
Continuing students will need to complete a new Master Promissory Note at www.studentloans.gov. Once this is complete, the Financial Aid Office will be notified by the US Department of Education.
Other SVC Financial Aid Information
- Aid Application Process
- SVC Financial Aid Forms
- Institutional Scholarships and Grants
- Southern Vermont College Alternative Financing
- Resources/Helpful Links
- Financial Aid Refund Calculations
- Support from the Financial Aid Office
- Financing Your SVC Education
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