Student Loan Options
The U.S. House of Representatives approved the current student loan bill on March 21, 2010. The student loan bill will end the federally-guaranteed student loan program, where banks and financial institutions make federal education loans that are guaranteed against default by the U.S. Department of Education. Instead, all new loans, starting July 1, 2010, are made through the Direct Loan program, where the funding comes directly from the federal government.
The Direct Loan program offers the same Stafford, PLUS and consolidation loans as the federally-guaranteed student loan program. Students now obtain their loans from the college financial aid office instead of having to find a lender.
There are a few loan processes that need to be completed before loan funds can credit a student's account. Many of these processes can be completed at www.studentloans.gov.
Loans: What you need to do
Once you have completed the FAFSA, there are additional steps you will need to complete if you wish to pursue a Federal Direct subsidized or unsubsidized loan.
**Sign a Master Promissory Note (MPN)**
The Master Promissory Note (MPN) is a binding legal document a student or parent signs in order to obtain a federal educational loan. It lists the conditions under which you are borrowing and the terms under which you agree to pay back the loan.
For instructions on how to complete the MPN, please view the following: Completing your Direct Loan MPN.pdf.
**Complete Entrance Loan Counseling**
Before receiving a student loan, borrowers must complete an entrance counseling session. This quick and easy interactive counseling session provides useful tips and tools to help you develop a budget for managing your educational expenses and helps you to understand your loan responsibilities. Federal Direct Subsidized and Unsubsidized Loan Counseling can be completed by going to www.studentloans.com.
Federal Perkins Loans
The Federal Perkins Loan Program provides low-interest (5% fixed) loans to students showing financial need. Financial need is determined by the U.S. Department of Education through an evaluation of financial information provided by the student on the FAFSA. The U.S. Department of Education provides Perkins Loan funding to the school. Since these funds are very limited, the school must determine the students who have the greatest need to receive the Perkins Loans. If you are offered a Perkins loan and decide to pursue it, you will be required to come into the Financial Aid Office to complete a Perkins promissory note. You will also need to complete Perkins entrance loan counseling at www.mappingyourfuture.org/oslc.
Parent PLUS Loans
PLUS Loans are available to parents of dependent undergraduate students enrolled at least half time in an eligible program at an eligible school. These are unsubsidized loans (7.9% fixed interest) available to parents to supplement their children's aid package, up to the school's cost of attendance.
If a parent is interested in applying for a PLUS Loan, the parent will need to go to www.studentloans.gov, using his or her FAFSA PIN. Once the parent has entered the site, he/she should click on Start the PLUS Application Process and then select the loan type Parent PLUS. Full instructions on how to complete the PLUS Loan process are available by clicking here.
What's the difference between a federal and a private student loan?
Currently all private education loans are processed using a separate application, which can be obtained from the participating lender or online at the lender's website. The application should be completed by the student borrower or co-signer and submitted online directly to the lender.
Private education loans are available to students as an option if the aid that the student has been awarded does not cover all of the student's educational expenses and the student has exhausted their eligibility for the federal loan programs. If parents choose not to pursue the PLUS loan, a private loan can be an option. Be aware that benefits can be lost when choosing the private loans over the federal PLUS loan.
How to Determine the Best Lender and Loan for You
It is very important (and may save you time and money down the road) that you carefully consider the characteristics of the many lenders and educational loan programs available before determining which loans are best for you. Each application or brochure may look different, but all have similar loan characteristics.
Click the link above to access an online loan comparison solution, customized for the Mayville State University, to make the right education loan choice for your situation.
FASTChoice is not a lender. This site provides an independent web-based student loan comparison solution. You can even apply online directly from this site (where available). No personal information is required before you apply.
Please keep in mind that you may select any lender of your choice, even if they do not appear in FASTChoice.
By visiting National Student Loan Data System online, you can view all of your federal loan and grant history. The site displays information on loan and grant amounts, outstanding balances, loan statuses and disbursements. Check it out!
Find out how loan consolidation can simplify and lessen the burden of loan repayment. Direct consolidation loans allow borrowers to combine one or more of their federal education loans into a new loan that offers several advantages, such as one lender and reduced monthly payments. For additional information on loan consolidation, visit www.loanconsolidation.ed.gov.