FAQ's for the Federal Direct Loan Program
- Why is Luzerne County Community College entering into the Federal Direct Loan Program?
Luzerne County Community College is moving to the Federal Direct Loan Program to ensure federal loan funds for our students and/or parents and it is required to be used by the U.S. Department of Education.
- When does the Federal Direct Loan Program begin?
The Federal Direct Loan program will be effective for 2009-2010 summer sessions; therefore this will require any new and/or returning student to complete a new master promissory.
- What are the differences between the Federal Direct Loan Programs and FFELP?
The Federal Direct Loan Program the loans come from the US Department of Education using funds from the US Department of Treasury. FFELP loans individual banks supplied the loan funds.
- Can I borrow through both FFELP and Federal Direct Lending?
No, all students and/or parents that wish to obtain a federal loan starting with the 2009-2010 Summer Sessions must borrow under the Federal Direct Loan Program.
- What types of Federal Direct Loans are available?
The Federal Direct Loan program has the same types of loan programs as the FFELP program:
- Subsidized Stafford Loan is a need-based loan. The federal government will pay the interest payments while you are enrolled in school at least half-time which is 6 credits.
- Unsubsidized Stafford Loan is not a need-based loan. The federal government does not pay the interest while you are in school. The interest will accrue and is added to the principal of the loan. Interest may be paid at anytime without penalty. You also have to be enrolled in at least 6 credits.
- Parent PLUS loan are available for parents of dependent undergraduate students. The loan may cover up to the full cost of attendance less other financial aid received. Eligibility is based on credit worthiness.
- How much can be borrowed through the Federal Direct Loan program in Stafford Loans?
Same loan limits apply as with the FFELP Program please refer to website under Financial Aid under Loans.
- What are the eligibility requirements?
Students must be enrolled at least half-time (6credits) in a certificate or associate degree seeking program and must meet general eligibility requirements for federal student aid. Parent PLUS Loans borrowers must pass the credit check.
- How do I apply for a Federal Direct Loan?
First, you must complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov. Please refer to our website under Financial Aid click on loans.
- What are the interest rates and fees for these loans?
Please refer to our website under Financial Aid click on loans loan.
- What if I have a combination of loans such as FFELP and Direct Loans?
Some students may have loans through the FFELP and Federal Direct Loan Program for a complete listing of the loans you have borrowed you should refer to the national Student Loan Data System (NSLDS) at www.nslds.ed.gov. This is a central database for student aid which allows accesses for students to view information from schools, guaranty agencies’, the Federal Direct Loan Program, as well as other federal programs. You will need a PIN number to access your account the same pin you used for your FAFSA. If you have lost your PIN, you can request a duplicate at www.pin.ed.gov.
- What type of repayment plans are offered through the Federal Direct Loan Program?
There are many repayment plans offered to pay back your student loan. For a complete list of repayment options please visit www.dl.ed.gov/borrower, click on FAQ on the left side and then select repayment options.
- Who will service my Federal Direct Loans?
The Servicer of your Federal Direct Loan will be determined by the Direct Loan Servicing Center as determined by the US Department of Education.
- Who should I call with questions regarding repayment?
Contact Direct Loan Servicing Center at 1-800-848-0979 they are available Monday to Friday, 8:00AM to EST-8:30PM EST.
