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 beginning June 1), then complete entrance loan counseling at www.direct.ed.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% for loans disbursed between July 1, 2009 and June 30, 2010.
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