Information To Our Students And Parents About Loans

UPCOMING CHANGES TO FEDERAL LOAN PROCESSING  2010-11 

For many years, Wofford College has successfully administered federal student loan programs (i.e. Stafford, Parent PLUS Loans) through the Federal Family Education Loan Program (FFELP).  This relationship provided Wofford students with access to federal loans through a variety of private lenders who extended borrower benefits to them.

Wofford College will be transitioning to the Direct Lending Program beginning with the 2010-11 academic year. This decision was brought about by the recent government regulation of the Federal Family Education Loan Program (FFELP)
benefits which changed the way student loan programs operate.  Wofford College feels that the implementation of the Direct Lending Program will provide stabilized access to funds and allow the institution to prepare effectively for any federal changes.

COMMONLY ASKED QUESTIONS
Wofford College Transitions to the William D. Ford Federal Direct Loan Program

Wofford is transitioning to Direct Lending for the 2010-11 academic year.  The implementation of Direct Lending will provide stabilized access to funds and allow Wofford to prepare effectively for the federal changes.

Familiarizing yourself with these changes will help ensure a smooth transition once they go into effect.  For more detailed information about the types of aid, scholarships and deadlines, consult http://www.wofford.edu/financialAid/. We look forward to working with you as you continue along the path toward graduation.

What is Direct Lending? Borrowers receive federal loan funds (i.e. Student Direct Loans and Parent Plus loans) directly from the Department of Education (DOE), instead of through a private lender.

Each federal loan borrower has the same lender, the DOE, as well as the same loan benefits.

Borrowers no longer need to research and then select a private lender for their federal loans.  They use the same website to complete electronic Master Promissory Notes (EMPN).

How does this change impact previous and current federal loans made with private lenders? This can be a confusing transition; some students may have loans with multiple lenders (resulting in more than one monthly payment when entering repayment on loans).  All federal loan agreements – with the exception of loans made during the 2008-09 academic year – will remain intact with the private lender selected on the original Master Promissory Note (MPN).

In 2008-09, many private lenders sold their Stafford Loan portfolio to the DOE (which gave them additional funding to make new loans); this means that most Stafford loans borrowed in 2008-09 will be repaid to the DOE and not the original selected lender (refer to the repayment chart below).

Private lenders include banks, credit unions or state agencies, such as SC Student Loan Corporation, Wachovia, Chase, Wells Fargo and etc.

*Beginning in the 2009-10 academic year, most lenders will be selling the loans guaranteed under the Family Federal Education Loan Program (Subsidized Stafford, Unsubsidized Stafford and Plus loans) to the Department of Education.  Lenders will notify borrowers once they have sold the loan(s).  As necessary, please consult with your lender as to which loans have been sold and work with the Department of Education upon graduation to consolidate the loans you have borrowed.

Where can I view a comprehensive list of my federal loans? Simply visit the National Student Loan Data System at http://www.nslds.ed.gov/nslds_SA/.  Select Financial Aid Review, then follow on-screen instructions.

What steps do I need to complete if I will (or think I will) be receiving federal loans (Student Direct Loans or Parent Plus Loans*) for the next academic year, 2010-11?   To be considered for financial aid (federal, state and/or Wofford funds), you must follow these steps:

1. Complete the Free Application for Federal Student Aid (FAFSA) at http://www.fafsa.ed.gov/  as soon as possible after January 1, 2010 (and before the priority deadline of March 15, 2010).
2. Complete required entrance counseling at Direct Loan Servicing studentloans.gov
3. Complete a required Electronic Master Promissory Note (EMPN) at Federal Student Aid studentloans.gov

*Parents who have applied for PLUS loan in the past and were denied (making their child eligible for increased Stafford Loan funds) MUST now, first apply for a Parent PLUS loan through Federal Loan Servicing at studentloans.gov and be declined before the student will be eligible for additional Student Direct Loan funds.  This process takes approximately 24-48 business hours. Parents applying for a Plus Loan must initially complete the Plus Request Process for pre-approval after signing in to the website.

Parents of students will need their Personal Identification Number (PIN) which is the same PIN used when completing the FAFSA.  Any questions about these websites should be directed to Applicant Services for Direct Loans, 1-800-557-7394.

What if I need a non-Federal, private loan?  There are still many lenders who will be participating in the non-federal private educational or alternative loan programs.

Wofford recommends that you exhaust all grant, scholarships and federal loan options prior to obtaining a private student loan.  There are many differences between lenders and the terms and conditions of their loans, so borrowers are encouraged to research their options and compare lenders before making a final selection.

Who can I contact if I have questions about the status of my loans or my financial aid?  Please contact or meet with a Wofford College financial aid counselor in the Aid Office.

What will happen to the existing federal loans that I have borrowed previously (i.e. from private lenders)?  After graduation, you have a choice.  Make individual payments to both your private lenders(s) and to the Department of Education for your Direct Loans; or consolidate all your loans into one payment.  You may consolidate all your loans with the US Department of Education.

Why do I have to complete another Master Promissory Note (MPN)?  A new note is required because you will be borrowing from a new lender, the federal government.  This will be the last promissory note you will have to sign as long as you continue to attend Wofford College.

If I have already completed a Direct Loan Master Promissory Note for another school, do I have to complete another one for Wofford College?  You will not have to complete a new Direct Loan MPN if the MPN you signed while attending another school is still active.  Contact the Loan Applicant Service Origination Center at 1-800-557-7394 to verify the status of your prior Direct Loan MPN.

Where can I go to consolidate my loans?  You can access information at the Federal Direct Consolidation Loans Information Center http://loanconsolidation.ed.gov/

When do I have to start repaying loans?    Loans will not go into repayment as long as you remain enrolled at least half time.   

LOAN REPAYMENT

Student loans are just as real as car loans or mortgages.  You have to pay back your student loans to the federal government (or the private lender who serviced your Stafford loan).  Be aware of your obligations so you can stay on top of your loans.

Prior to leaving Wofford College - Take the time to meet with the financial aid counselor to discuss questions you may have regarding your loans or indebtedness.   Complete exit counseling.  Review loan history at US Department of Educations’ National Student Loan Data System (NSLDS) http://www.nslds.ed.gov/nslds_SA/

Grace Period – After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment.  This “grace period” is
• Six months for the Federal Student Direct Loan
• Nine months for Federal Perkins Loans (repayment is made to Wofford College)

Your grace period begins the day after you stop attending school on at least a half time basis.  Once your grace period ends, you must begin repaying your loan(s). If you re-enroll in school at least half time before the end of your 6-month grace period, you will receive the full 6-month grace period when you stop attending school or drop below half-time enrollment.

We cannot emphasize enough the importance of making your full loan payment on time and according to your repayment schedule.  If you do not, you could end up in default, which has serious consequences.
Loan Status.


Loan Status
You can review a comprehensive list of your loans through the US Department of Education’s National Student Loan Data System (NSLDS) http://www.nslds.ed.gov/nslds_SA/. The site allows you to access information on loan and/or federal grant amounts, your loan status (including outstanding balances), and disbursements made.  Select Financial Aid Review, the follow the on-screen instructions.

The Financial Aid Review also lists the loan type (FFELP or Direct Lending).  Direct Loans are repaid to the federal government; FFELP loans are repaid to the lender you selected on your master promissory note.

FAQ – US Department of Education Direct Lending  studentloans.gov

How do I contact the Direct Loan Program? 
Direct Loan Program Customer Service: 1-800-848-0979

Federal Student Aid PIN Application  http://www.pin.ed.gov/PINWebApp/pinindex.jspFederal

Student Aid Entrance Counseling  studentloans.gov

Direct Loan Master Promissory Note  studentloans.gov