Federal Direct Loan Processing


President Obama signed into law the Health Care and Education Reconciliation Act of 2010 (HR 4872), a bill to eliminate the Federal Family Education Loan Program (FFELP) and have all federal student loans originated through the Department of Education's direct
lending program.

Direct Loans are generally awarded as part of a larger "award package," which may contain other types of aid as well, to help you meet the costs of going to college or career school.

The Federal Direct Loan Program offers the following types of loans:

  • Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.
  • Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
  • PLUS: unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
  • Consolidation: Eligible federal student loans can be combined into one Direct Consolidation Loan.

Student borrowers are not required to begin making payments until after they drop below half-time attendance.

The Department of Education serves as a portal for Direct Loan borrowers to manage their Direct Loans. Borrowers may use the  website to:

  • complete Stafford and GradPLUS Entrance Counseling,
  • complete a Direct Loan Electronic Master Promissory Note ("MPN")
  • You will need the same PIN that you used for your FAFSA to electronically sign the note. If you do not have a PIN, you may obtain one from the Federal Student Aid PIN Web site.
  • view electronic loan correspondence such as disclosure statements, and
  • link to other tools and resources

Note: If you will borrow from BOTH the Stafford and Grad PLUS programs, you will need to complete a separate MPN for each loan program.

"What Else Do I Have to Do?"

Students who are borrowing for the first time will need to obtain a Federal Student Aid PIN. Continuing students who currently are participating in the Stafford Loan Program do not have to complete a new Entrance Counseling session with the Direct Loan Program and may manage their account online with Direct Loan Servicing Online.