Beginning with the 2010-2011 academic year, Lock Haven University (LHU) will process Federal Stafford and PLUS Loans through the Direct Loan program. This means that the University will no longer use the Federal Family Education Loan Program (FFELP) to process Stafford, Parent PLUS and Graduate PLUS Loans. Under the Direct Loan program, the funds for federal loans will come directly from the federal government. In the FFEL program, funds come from a bank, credit union, or other participating lender. Eligibility rules and loan amounts are identical under both the FFEL and the DL programs. 

The following FAQs provide additional information about this change in loan programs. If you have other questions about Direct Loans, please contact the Student Financial Services Office.

Why did LHU change to the Direct Loan program?

What are some of the benefits of the Direct Loan program?

Does the change to Direct Loans affect my 2009-2010 federal loans?

Does the change to Direct Loans impact me?

May I continue to borrow through the same lender as last year?

How do I apply for a Direct Stafford Loan?

How do I apply for a Direct PLUS Loan?

Do I have to complete a new Master Promissory Note (MPN)?

I'm having trouble accessing the StudentLoans.gov website.  What should I do?

I completed a Master Promissory Note (MPN) when I borrowed my prior loans.  Why do I have to complete another?

I completed Entrance Counseling when I borrowed my very first loan.  Why do I have to counsel again?

Are there any differences in interest rates between the two programs?

Are there fees associated with the Direct Loan program?

What happens to my previous Stafford Loans?  Will they still be deferred now that LHU is changing its loan process?

Where can I find a list of all my student loans, including my Direct Loans?

How will repayment work if I have FFEL and Direct loans?

How can I find out who is servicing my federal loans?

What repayment plans are available?

How do I consolidate my loans?

I need a private, alternative loan, and the Direct Loan program does not offer alternative loans.  What lenders offer alternative loans?

What is Public Loan Forgiveness?

Why did LHU change to the Direct Loan program?
In addition to the benefits listed below, LHU believes that the Direct Loan program offers our students and parents a more stable, streamlined, and predictable borrowing experience.

What are some of the benefits of the Direct Loan program?

•     A single lender - The U.S. Department of Education

•     A guaranteed source of funding for student and parent loans

•     A lower interest rate on Parent PLUS and Graduate Plus loans

•     A single point of service – the Direct Loan Servicing Center - for borrowers in repayment

•     Additional repayment options and interest rate reductions for on-time payment

•     The Public Service Loan Forgiveness Program

Does the change to Direct Loans affect my 2009-2010 federal loans?
The change to DL does not affect the loans you have borrowed or will borrow for the 2009-2010 academic year and/or summer 2010.  Starting fall 2010 all Federal Stafford, Graduate PLUS, and Parent PLUS loans will be processed through the Direct Loan program.

Does the change to Direct Loans impact me?
If you plan to borrow a Federal Stafford, Graduate PLUS, or Parent PLUS loan for the fall 2010 semester or any future enrollment period, this change impacts you.  As of fall 2010, all Federal Stafford, Graduate PLUS, and Parent PLUS loans will be processed through the Direct Loan program.

May I continue to borrow through the same lender as last year?
No. As of fall 2010 all Federal Stafford, Graduate PLUS, and Parent PLUS loans will be processed exclusively through the Direct Loan program. You will be borrowing directly from the federal government through the U.S. Department of Education.

How do I apply for a Direct Stafford Loan?
To learn how to apply for a Direct Stafford Loan, click here.

How do I apply for a Direct PLUS Loan?
To learn how to apply for a Parent PLUS Loan (for parents of dependent students) OR for a Graduate PLUS Loan (for graduate students), click here.

Do I have to complete a new Master Promissory Note (MPN)?
Yes.  Students or parents who wish to borrow a Federal Direct Stafford, Parent PLUS, or Graduate PLUS loan for 2010-2011 must complete a new Master Promissory Note at https://studentloans.gov.  Please complete the MPN as soon as possible.  To see if you have already completed a MPN, sign in to the https://studentloans.gov website and click on the "Completed MPNS" link under "My Loan Documents".

I'm having trouble accessing the StudentLoans.gov website.  What should I do?
In order to view the StudentLoans.gov website effectively, you will need one of the following supported browsers from either Microsoft or Mozilla. Please use the following links to download and install the appropriate browser.

For Windows:
Get MS Internet Explorer
Get Firefox 

For Apple Macintosh:
Get MS Internet Explorer
Get Firefox

If you are using a browser that is not supported, your view and interaction with this site may be significantly impaired.  To identify the browser currently running on your computer, use the "HELP" menu item on your browser and select "About [your browser name}".

If you continue to experience problems, please seek additional assistance via the "Contact Us" link on the StudentLoans.gov website.

I completed a Master Promissory Note (MPN) when I borrowed my prior loans.  Why do I have to complete another?
When you change lenders, you must complete a new Master Promissory Note. The U.S. Department of Education, the sole lender of Direct Loans, is different from any lender through which you borrowed FFEL loans.  Therefore, a new MPN is required.  

I completed Entrance Counseling when I borrowed my very first loan.  Why do I have to counsel again?
To ensure a smooth transition to and to better acquaint students with the Direct Loan program, LHU is requiring all Stafford and Graduate PLUS loan borrowers to complete entrance counseling online.  To do so, sign in at https://studentloans.gov. Be sure to choose the Lock Haven University as your school.

Are there any differences in interest rates between the two programs?
The interest rates for Direct Stafford Loans are the same as those of the FFEL program.  However, the Direct Graduate and Parent PLUS loan interest rate of 7.9% is lower than the FFEL program rate of 8.5%.

Are there fees associated with the Direct Loan program?
Yes.  Just as borrowers are charged a fee for Stafford and PLUS loans borrowed through the FFEL program, the Direct Loan program also charges an origination fee.   

·     Direct Stafford Loans - A net origination fee of 0.5% is deducted from each loan disbursement.  By federal law the total Stafford origination fee is 1.0%, but the Direct Loan program offers a 0.5% rebate.  If the student fails to make 12 on-time monthly payments, a charge for the difference between the 0.5% and 1.0% origination fees will be added to the outstanding balance of the loan.

Direct Graduate and Parent PLUS Loans - A net origination fee of 2.5% is deducted from each loan disbursement.  By federal law the total PLUS origination fee is 4.0%, but the Direct Loan program offers a 1.5% rebate.  If the PLUS borrower fails to make 12 on-time monthly payments, a charge for the difference between the 2.5% and 4.0% origination fees will be added to the outstanding balance of the loan.

In addition, if borrowers do not make loan payments on time, they may be charged collection costs and late fees.

What happens to my previous Stafford Loans?  Will they still be deferred now that LHU is changing its loan process?
Your previous Stafford Loans years will remain in deferment as long as you are enrolled at least half-time. You are responsible for notifying your lender/servicer if your enrollment status changes.

Where can I find a list of all my student loans, including my Direct Loans?
You can find information about your federal (i.e. Title IV) student loans by logging into the National Student Loan Data System (NSLDS).  You may use the website to make inquiries about your federal loans (e.g. Stafford, PLUS, Perkins) and/or federal grants (e.g. Pell).  You can also find information on loan and/or grant amounts, outstanding balances, loan statuses, and disbursements.  In addition, the site lists the names your loan servicers, which are organizations that send bills, collect loan payments, process requests for deferment of payment, etc.  At this time, there is no single website where you can obtain information on all your private, alternative loans.  However, information about those loans may be reflected on your credit report.

How will repayment work if I have FFEL and Direct loans?
You make separate payments to each lender/servicer.  If you would like to make just one monthly payment, you can opt to consolidate your loans.  You may do so through the Direct Consolidation Loan Program.  By consolidating you can extend the period of time that you have to repay your loans and combine several loan debts into a single monthly payment. For more information, visit the Federal Direct Consolidation Loans Information Center website:  http://loanconsolidation.ed.gov/index.html.    

How can I find out who is servicing my federal loans?
Log into the National Student Loan Data System (NSLDS) for information about the federal student loans you have borrowed (e.g. FFEL, DL, and Perkins), including information about your loan servicer(s).   

What repayment plans are available?
For information about repayment plans, visit http://studentaid.ed.gov. 

How do I consolidate my loans?
You may consolidate your eligible federal education loans through the Federal Direct Consolidation Loan Program.  By consolidating you can extend the period of time that you have to repay your loans and combine several loan debts into a single monthly payment. For more information, visit the Federal Direct Consolidation Loans Information Center website:  http://loanconsolidation.ed.gov/index.html.   You cannot consolidate while still in school.

I need a private, alternative loan, and the Direct Loan program does not offer alternative loans.  What lenders offer alternative loans?
Before applying for an alternative loan, please consider taking full advantage of the Direct Loan programs (i.e. Stafford, Parent PLUS, and Graduate PLUS).  You must apply for an alternative loan through a participating lender.  If you have borrowed a private loan previously, you may wish to continue using that lender. For more information about alternative loans, visit http://www.lhup.edu/financial-services/alternative-loan-programs.htm.

What is Public Loan Forgiveness?
Public Loan Forgiveness is a new program for public service employees.  For information about the program, visit http://studentaid.ed.gov.