Direct Lending FAQs
Q: Will I need to choose a lender for my federal loans?
A: No, all students at Georgia Tech will have the Federal Direct Loan Program as their lender.
Q: What do I need to do to receive my federal loans?
A: Submit an online loan request form (available at www.finaid.gatech.edu/loans), then complete entrance loan counseling at www.studentloans.gov, and finally, sign your electronic promissory note once the Office of Scholarships and Financial Aid notifies you that it is available.
Q: If I have prior student loans, will I need to do entrance counseling again?
A: Yes, all Georgia Tech students will need to complete entrance loan counseling to receive loans through the Direct Loan Program.
Q: If I have prior educational loans, will I need to sign a new "Master Promissory Note" (MPN)?
A: Yes, all borrowers will need to sign a new MPN to receive loans through the Direct Loan Program.
Q: If I have prior loans, will my Direct Lending Stafford and PLUS loans have different interest rates from my existing loans?
A: Stafford Loans: the interest rates in the two programs are the same. For Stafford Loans disbursed between July 1, 2009 and June 30, 2010, the interest rate is fixed at 5.6% for undergraduate Subsidized Stafford Loans (only) and fixed at 6.8% for Unsubsidized Stafford Loans and all graduate/professional Stafford Loans.
PLUS Loans: the interest rate is lower in the Federal Direct Loan Program. Instead of 8.5%, the interest rate is 7.9%.
Q: What are the loan fees in the Direct Lending?
A: Stafford: The effective up front fee will be 0.5% of the loan. For example, the proceeds of a $10,000 loan will be reduced by $50. If a student fails to make 12 consecutive on-time payments on entering repayment, they will be billed an additional 1.5% fee.
PLUS: The effective up front fee will be 2.5% of the loan. For example, the proceeds of a $10,000 loan will be reduced by $250. If the borrower fails to make 12 consecutive on-time payments, they will be billed an additional 1.5% fee.
Q: Will borrowers with both Direct Loans and other Federal Loans have multiple loan repayment servicers?
A: Yes. However the borrower can consolidate in the Federal Direct Loan Consolidation Program.
Q: What kinds of repayment options are available with Direct Lending?
A: Repayment options are explained in full at www.direct.ed.gov
This website last updated/reviewed on 03/23/12