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In a pro-active effort to adhere to President Obama’s efforts to restructure educational loans across America, Neumann University will switch to Direct Lending for graduate and undergraduate students who wish to obtain federal loans for educational costs. The change will take effect with the first summer session for the 2010-11 academic year. Currently, students and their parents rely on private lenders whose loans are
backed by the Federal Family Education Loan Program (FFELP).
“This switch from FFELP to Direct Loans essentially eliminates a middle man in the lending process,” said Christopher Corrato, Associate Director of Neumann Financial Assistance. “Loans from private lenders in the FFEL Program have always been backed by the Federal Government. Now the money will simply go from the Federal Government directly to the school. This eliminates the need to search for lenders and
protects the student from dealing with a lender who may leave the market.”
During the coming academic year, all continuing graduate and undergraduate students will need to complete the new Direct Loan Master Promissory Note. Graduating students can choose to consolidate their current loans if they are being handled to note that these changes are recommended by the United States Government. Neumann’s Financial Assistance staff has acted to serve its students and facilitate a smooth transition to the new system for every student receiving Federal Stafford loans. The only duty that students have to complete in this process is signing a new Master Promissory Note
online this spring. This note is a document in which students agree to pay off their loans
upon graduation. Students who currently receive loan money may have already signed one of these notes, which they will have to do so again in order to receive their loans for the fall of 2010.
Direct Loans will offer students a single application process and reduced origination fees. Money will be available sooner because schools will not have to wait for financial institutions to disperse the money. Interest rates of 7.9 percent will be applied to Direct
PLUS loans for parents and Direct Grad PLUS loans for Graduate students. This is lower than the current 8.5 percent rate offered in the FFEL program. Additional information can be found on the www.dlenote.ed.gov web site.
Katharine Markert, Neumann University’s Director of Financial Assistance, has invited
all students who have questions to attend one of her “FINANCIAL AID 101” information sessions. These Saturday sessions are to be held February 20th, March 4th &
27th. She asks that students RSVP at least two days in advance by calling 610-558-5521 or by emailing firstname.lastname@example.org. All sessions will be held promptly at 10AM
in the McNichol Room of the Bruder Life Center. “We are here to help,” said Markert.