NSU Financial Aid announces information for students

Northeastern State University's office of Financial Aid is notifying students who receive student loans of their responsibilities under the new federal policies for education loans.

"These changes are going to affect every student borrower," said Dr. Teri Cochran, director of NSU's Student Financial Services. "They will need to complete new master promissory notes because the DIrect Student Loan program will be the new lender."

On March 21, Congress passed the health care reform bill and student loan reform was included with this passage.

Due to the bill's passage, student loans will be disbursed through the Direct Loan program beginning July 1 for the 2010-2011 academic year. The Federal Family Education Loan program through which NSU disburses loans will not be available after June 30 and NSU will stop processing FFEL loans June 17.

With the FFEL program student loans are disbursed by government subsidized third party lenders, banks and others. The Direct Loan program removes the third party lenders and loans are disbursed directly from the Department of Education. The main difference between the FFEL program and the Direct Loan program is the source of disbursement.

Direct Loans are subject to the same interest rates and repayment conditions as with the FFEL program. All student loan borrowers will be required to complete a Subsidized/Unsubsidized Master Promissory Note with Direct Loans.

Student Financial Services recommends all students complete MPNs now to avoid processing delays with their Fall 2010 loans. Students may go to www.studentloans.gov to complete a Stafford Master Promissory Note. Students receiving their first student loan during the 2010-2011 academic year must also complete a Stafford Entrance counseling session at www.studentloans.gov. Please note that Microsoft Internet Explorer or Mozilla Firefox and Adobe Acrobat Reader must be used to view the site.

When students have loans with several entities it can create confusion about where to send payments or whom to contact regarding loan debt. Students can view all previous loan debt and obtain previous lender contact information via the National Student Loan Data System.

The Department of Education is scheduled to accept in-school consolidation for a year beginning July 1 and ending June 30th, 2011. Students with at least one FFEL or Direct Loan which is not being repaid may be eligible for loan debt consolidation through Direct Loans.

After July 1 for more information regarding in-school student loan consolidation. Students may want to consider the option of consolidation, as debts will not be spread over several holders and contacts.

"A student may currently have loans with banks and with the Department of Education," Cochran said. "Now, they'll have federal loans through the Direct Loans program. The advantage of consolidation is to get the debt held in one place."