Middle Tennessee State University

is changing to the

Federal Direct Student Loan Program

Effective for the fall 2009 semester, Middle Tennessee State University will offer Stafford and PLUS loans funded by the Federal Direct Loan Program.  MTSU will no longer process Stafford and PLUS loans through lenders in the Federal Family Education Loan Program (FFELP).

The university made the decision primarily because it will save our students and their families money, it will simplify the loan process, and the federal government will provide a stable and predictable source of funding.

Previously, MTSU processed student and parent federal loans through private and non-profit lenders that were part of the Federal Family Education Loan Program (FFELP). Until this year, these lenders offered attractive benefits to MTSU borrowers.

Recent volatility in the national credit markets and reductions in federal subsidies available to lenders participating in FFELP have led many lenders to stop offering borrower discounts or to discontinue participation in FFELP altogether. In the Direct Loan Program, the U.S. Department of Education acts as the lender, providing funds for Stafford and PLUS loans. Since borrowing is directly through the federal government, loan availability is not expected to be affected by credit market turmoil.

Since many FFELP lenders have stopped offering loan fee discounts and other borrower incentives, the Direct Loan Program, which started in 1994, is now offering the more stable, attractive terms for MTSU borrowers.  During our research, it became evident that the Federal Direct Loan program was the better loan program for our students and parents. The National Direct Student Loan Coalition document, Benefits of Direct Lending, provides an excellent comparison of the FFEL and Direct Loan programs.

The Federal Direct Loan Program offers students a streamlined process with a known lender, the federal government.  Borrowing from the federal government is the best solution for student loans at this time. It is consistent with our need to ensure a high-quality, cost-effective, dependable loan program for MTSU families. Direct loans are not sold, so students and parents will make payments to the Department of Education through the life of their loans. The customer service process also is streamlined because there is a single point of contact for schools and students.

MTSU will start processing all student and parent plus loans with the Federal Direct Lending program for the Fall 2009 – Spring 2010 school year.  All returning and new students have to sign a Federal Direct/Stafford Master Promissory note to receive a student loan at http://dlenote.ed.gov/empn/index.jsp  All new students will have to complete an entrance interview at https://www.dl.ed.gov/borrower/EntrCounselingStart.do

In order to receive a parent plus loan, all parents have to complete a Parent Plus loan request sheet at http://www.mtsu.edu/financialaid/forms/PLUSappweb.pdf and return it to the MTSU financial aid office.  All parents also have to sign a Federal Direct Master Promissory Note to receive a Parent Plus loan at https://dlenote.ed.gov/empn/completenew_plus.jsp

Federal Direct Loan account information contact:  1-800-848-0979

Website:  Account Information:
https://www.dl.ed.gov/borrower/BorrowerWelcomePage.jsp

Frequently Asked Questions about the Federal Direct Lending Program, Click Here

Financial Aid News


Applying for Summer Aid 2009

Tutorial for completing the 2009-2010 FAFSA

MTSU is changing to the Federal Direct Student Loan program

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Please  Note:
Any information on this site concerning financial aid assistance at MTSU may be subject to change or corrected as necessary without prior notice.