The School of The Museum of Fine Arts, Boston will participate in the William D. Ford Federal Direct Loan (Direct Loan) Program beginning July 1, 2010. Students and parents who previously received loans through the Federal Family Education Loan (FFEL) Program will now borrow through the Direct Loan Program. The Direct Loan Program offers the same types of loans as the FFEL Program and Direct Loans generally have the same terms and conditions as FFEL Program Loans, but instead of a bank lending the money; the U.S. Department of Education (the Department) lends the money directly to students and parents through the student's school. There are also some differences in the names of the loans. The FFEL Program's Federal Stafford Loans (subsidized and unsubsidized) are called Direct Subsidized Loans and Direct Unsubsidized Loans in the Direct Loan Program. Federal PLUS loans are called Direct PLUS loans.
Benefits of the Direct Loan Program
Direct Loans and FFEL Program loans have the same annual and aggregate loan limits, the same deferment and cancellation provisions, and most of the same repayment plans (Standard, Graduated, Extended, Income-Based). The interest rates for FFEL Program Stafford Loans and Direct Subsidized and Unsubsidized Loans are also the same. Direct Loans also have some benefits that are available only in the Direct Loan Program.
- Lower interest rate on Direct PLUS loans (7.9% vs. 8.5% for Federal PLUS loans
- Up-Front interest Rebate
- Income Contingent Repayment Plan (in addition to the Income-Based Repayment Plan)
- Public Service Loan Forgiveness Program
- No interest charged (for up to 60 months) during qualifying periods of active duty military service (for loans first disbursed on or after October 1, 2008)
Consolidating FFEL Program Loans into the Direct Loan Program
If you already have FFEL Program Loans and will now be receiving Direct Loans, consolidating your FFEL and Direct Loan Program Loans together into a Direct Consolidation Loan may make loan repayment easier. If you consolidate, you will have just a single monthly payment. Consolidating your FFEL Program Loans into a Direct Consolidation Loan may also allow you to take advantage of certain benefits that are offered only in the Direct Loan Program such as Public Service Loan Forgiveness and the Income Contingent Repayment Plan.
To learn more about when you may consolidate, the pros and cons of doing so, and the application process, visit
www.loanconsolidation.ed.gov or call 800-557-7392.
