Federal Direct Loans

Beginning fall 2010, Stafford and PLUS loans through participating lenders such as CitiBank, Chase, Wachovia, Wells Fargo, etc. will be replaced by the William D. Ford Federal Direct Loan Program.

We encourage you to frequently check our website to for more information as we move thourgh the transition.

See below for what we anticipate will be frequently asked questions.

Direct Loans FAQ

1. If I have previously received a Stafford or PLUS through another the lender, do I have to change to the Direct Loan Program?

Yes. All students and parents needing Stafford or PLUS loans for the 2010-2011 school year will need to apply through the Direct Loan Program.

2. Will the fees be different?

Yes. There will a 1% origination fee and a .5% rebate fee for Stafford loans disbursed after July 1, 2010. There will be a 4% origination fee and a 1.5% rebate fee for PLUS loans disbursed after July, 1, 2010.

3. Are the terms for repayment similar to those offered through other lenders?

Yes. Go to www.direct.ed.gov/student.html for more information.

4. Does the Direct Loans Program allow borrowers to defer payments?

Yes. The Direct Loan Program allows the same deferments that are available to borrowers in the Federal Family Education Loan Program (FFELP).

5. If I borrowed through a private bank last year, will I have to repay two different lenders now?

Your Direct Loan will be serviced by the Department of Education, so you will receive correspondence and payment information from both the Department of Education and your prior lender or servicer. You have the option of consolidating all of your federal loans with the Direct Loan program (or any other lender that offers federal consolidation loans) after you graduate to combine the loans. If you consolidate, your previous federal loans would be paid in full and all of your payments would be made to the Direct Loan program.

6. Do I need to complete a new master promissory note?
   
   Yes. Go to www.studentloans.gov and have your FAFSA pin to sign the new mpn.



7. What happens to the Stafford loans I borrowed via my bank or lender in prior years? Will they still be deferred now that CSU Fullerton is changing its loan processing?

As long as you are enrolled in school on at least a half time basis, your prior year federal loans will continue to be deferred. Enrollment information is reported to lenders by the school on a scheduled basis.

This page is maintained by the Cal State Fullerton department of Financial Aid. Report problems to fa@fullerton.edu

California State University, Fullerton ©2009. All Rights Reserved.