Federal Direct Loan Program Transition
Due to recent legislation passed by Congress and signed into law by the President, NEO will be transitioning to the Federal Direct Loan Program for all Stafford loans beginning July 1, 2010. We are making this change because the loan program that we currently participate in, the Federal Family Education Loan Program, (FFELP) has been eliminated by this new legislation. The transition will not affect the availability of loans for students, just the source of funding. The funds for FFELP loans came from banks. Under the Federal Direct Loan Program, the funds for student loans will come directly from the U.S. Department of Education. Below is a list of frequently asked questions about Direct Loans. If you have any questions not answered by the FAQ, please call the Office of Financial Aid.
Will I have to complete a new Master Promissory Note (MPN) as a continuing student?
- · Yes. All continuing and new students will need to sign a new MPN if they receive a loan after July 1, 2010. New MPN’s for Direct Loans will be completed online using your FAFSA PIN number as your electronic signature. There will be no more paper MPN’s. There will be a link on the NEO Financial Aid webpage that will connect you to the Direct Loan website where you can complete an electronic MPN.
Will I have to complete Entrance Counseling for Direct Loans?
- · Yes. All students have to complete entrance counseling each year. You will complete entrance counseling online at the same website where you sign your electronic MPN.
Will my parents be able to get a PLUS loan through Direct Loans?
- · Yes. Your parents will be able to apply for a Direct PLUS loan online at the same website where you will complete your MPN and entrance counseling. They will not apply for a PLUS loan through a bank as they did in the past. You will need to let NEO know that your parents have applied for a Direct PLUS loan so we can process the loan if it is approved.
Will I have to choose a new lender when I accept my loans for next year?
- · No. Banks will no longer be able to originate FFELP loans after July 1, 2010. You will simply accept or decline your loan. All new loans will have one funding source, the U. S. Department of Education.
For more information on Direct Loans click below . . .
Direct Loan Information