Action Alert for JSC Student Borrowers: Major Changes in Student Loan Procedure
Congress has recently passed a law changing the way education loans are processed and administered. Effective immediately, all education loans are being processed and funded directly by the U.S. Department of Education through the school and are now called the William D. Ford/Federal Direct Loans Program (Direct Loans). This law affects all students (and all colleges) in the U.S.
HOW THIS AFFECTS YOU
If you currently have a loan and plan to borrow again for the 2010-2011 academic year, you (or your parent, in the case of a PLUS Loan) must IMMEDIATELY sign a new “master promissory note” (MPN) with the U.S. Department of Education.
If you wait to sign the new promissory note, your loan(s) could be delayed — especially if you intend to use the aid for summer courses, because the 2010-11 academic year starts with the summer 2010 semester.
The promissory note is a legal document specifying the terms of your loan. You must sign a new promissory note because you now have a new lender: the U.S. Department of Education. This will replace the note you signed with your current lender (whether VSAC, Sallie Mae, a private bank or another lender) when you originally took out your loan(s). Grace periods and standard repayment terms are the same. In fact the Department offers additional repayment terms to assist student borrowers.
The only other change you will notice will be in the titles of the loans. From now on, these loans will be called Federal Direct Loans (formerly Stafford Loans) and Direct PLUS Loans.
HOW TO COMPLETE YOUR NEW PROMISSORY NOTE
Go to www.studentloans.gov\ and enter your FAFSA PIN. (Forgot it? This Web site provides instructions on how to retrieve it.) If your parent has a PLUS loan, your parent must enter his/her PIN to sign the note.
Enter contact information (name, address, phone number) for two references as required. (Except for PLUS loans, the first reference should be a parent or guardian).
That’s all there is to it!
Want more information about this change? We’ve provided answers to some frequently asked questions below, and you can refer to www.studentloans.gov for more details. In addition, as always, the staff of the JSC Financial Aid Office is happy to answer any questions you may have.
IF YOU ARE A DEPENDENT STUDENT, PLEASE SHARE THIS INFORMATION WITH YOUR PARENTS. OUR GOAL IS TO MAKE THIS TRANSITION AS SMOOTH AS POSSIBLE.
FREQUENTLY ASKED QUESTIONS
How soon do I need to sign the new master promissory note?
Now! To prevent delays in loan disbursement, complete promissory notes TODAY even if you have not yet received your financial aid award for 2010-11 (especially if you are enrolling in summer courses.) Visit www.studentloans.gov.
I completed “Entrance Counseling” previously. Do I need to do this again?
No. (Entrance counseling is not required at all for Parent PLUS loans.)
I am graduating this May. Do I need to sign a new master promissory note?
No — unless you are continuing your studies and will be taking out another loan. If so, you will need to sign a new note.
Will Parent PLUS Loans still require credit checks?
Yes, Direct PLUS Loans will still require a yearly credit check. This should be done after July 1.
Instant credit decisions will soon be available online at www.studentloans.gov
What else should I know?
Summer refunds will not be available until mid-July because first disbursements are made after July 1; it is the start of a new academic year for the Department of Education.
If you have questions about your existing education loans, contact your current lender (i.e., VSAC, Sallie Mae, Discover, etc.)
Remember that this is a federal law that affects every college in the U.S. The law requires all colleges to participate in the newly established William D. Ford Federal Direct Loan Program, which establishes the U.S. Department of Education as the sole lender for education loans. This means that student loans are no longer available from the Vermont Student Assistance Corp. (VSAC) or other lenders.
Questions?
Contact the JSC Financial Aid Office at 802-635-1380 or email JSC.FinancialAid@jsc.edu
