What are the benefits of the Direct Loan Program?
Several of the benefits are:
- A guaranteed source of funding for student loans.
- The option of an income-contingent repayment plan or an income-based repayment plan when a student enters repayment. This means a borrower has the option of ensuring that the loan repayment amount will always be affordable based on what an income will allow.
- Students in the Federal Direct Loan Program who enter into public service jobs can have any remaining balance on loans forgiven after 10 years of repayment while in public service work. (While this option does not exist in the FFEL Program, students who borrowed in that program can consolidate their loans to the Direct Loan Program in order to take advantage of this forgiveness).
- The Federal Direct PLUS loan origination fee is lower, with an interest rate for Parent and gradPLUS loans of 7.9% compared to 8.5% in the lender-based FFEL Program.
What do I have to do to get my loan funds?
You will have to complete a FAFSA for Direct Loan eligibility. Monitor myUNTDallas To Do List for updates and requirements. Once your file is considered complete, you will be notified about your award(s) that you must Accept or Decline via myUNTDallas.
First-time student loan borrowers at UNTD must also complete the online Entrance Counseling requirements and have a valid Master Promissory Note(MPN) on file. Continuing student loan borrowers must complete Financial Awareness Counseling.
Can I go ahead and complete the loan counseling now?
Yes. If you are a new borrower at UNTD (including transfer students), you may complete your Federal Direct Loan Entrance counseling at anytime. This can be done at StudentLoans.gov. You will need your PIN number (as assigned when you signed the FAFSA) and enter University of North Texas at Dallas as a school to receive the results. Parent PLUS borrowers do not need to complete Entrance Counseling.
If you a continuing borrower at UNTD, you may complete your Financial Awareness Counseling through StudentLoans.gov. You must enter University of North Texas at Dallas as your school to receive the results. Be sure to keep your confirmation number for future reference.
If I borrowed through a private bank last year, will I have to pay two different lenders now?
Your Federal Direct Loan will be serviced by the Department of Education, so you will receive correspondence and payment information from both the Department of Education and your prior lender or servicer. You have the option of consolidating all of your FFEL Staffor Loans with the Direct Loan program after you graduate or leave school. If you consolidate with the U.S. Department of Education all of your payments would be made to the Direct Loan program.
Where can I find information about deferments or forbearance requests?
To find this information, please visit www.studentloans.gov. To gather the form(s) needed for deferment or forbearance, you will need to contact your loan servicers(s) directly.
To find out who your loan servicer(s) is, please log onto the National Student Loan Data system (NSLDS), using your PIN number (as assigned when you signed the FAFSA). The National Student Loan Data System is the U.S. Department of Education's (ED's) central database for student aid recipients of Title IV Aid to access and inquire about their Title IV loan and/or grantdata.
Where do I find information about Federal Loan Consolidation?
Where do I find information about Federal Loan Consolidation?
What is required when I leave UNTD?
- Each Federal Direct Loan borrower at the University of North Texas is required to complete Student Exit Counseling shortly before completing a degree, leaving UNTD (i.e., withdrawing, graduation) or ceasing half time enrollment. To complete this requirement, go to StudentLoans.gov, sign in with your Federal Student Aid PIN, selectComplete Counseling from the main menu box and then Exit Counseling. Be sure to select the University of North Texas as a school to receive notification of completion.
- You must pay your student loans (including interest or fees, if applicable) on time even if you don't finish your education, don't get a job, or don't feel satisfied with the education you receive.
- If you request deferment or forbearance, you must continue to make scheduled payments until your student loan is placed in deferment or forbearance.
- You must notify your student loan holder or servicer immediately of any change to your name, address, telephone number, employer, or Social Security number.
Refer to your Promissory Note for a complete list of borrower rights and responsibilities for your student loan(s).
PLUS Loan
How do my parents apply for a loan?
The FAFSA must be completed for Federal Direct PLUS eligibility to be determined.
To apply, the parent borrower must log onto StudentLoans.gov to submit the Direct Parent PLUS Request. Detailed instructions for completing the Direct Parent PLUS Request are available here.
A credit check is conducted by the U.S. Department of Education to establish eligibility. You cannot have an adverse credit history. Borrowers will be notified if additional action is necessary.
What if my parent is not eligible for federal Direct PLUS loan?
The Department of Education will run a credit history check to determine eligibility for a Direct PLUS loan. The department will provide additional information to parents about other options (i.e. pursue a co-signer/endorser or appeal the denial) if there is adverse credit history. UNTD will process all denials received, regardless of which option is chosen. The PLUS Denial - Additional Unsubsidized Loan Request Form will be added to the student's To Do list via MyUNTDallas once the denial has been processed.
What is a Federal Direct PLUS for Graduate Student Loan?
The Deficit Reduction Act of 2005 modified the Federal Direct PLUS program (formerly offering loans only to parents), which now allows graduate students to borrow PLUS loans. Students must request Student Financial Aid and Scholarships staff to review their eligibility for a Graduate Professional Federal Direct PLUS loan.
What about repayment?
Repayment of the Federal Direct PLUS Loan principal and interest begins 60 days after the final disbursement for the loan period. Deferments are available for parents who wish to postpone repayment until after the dependent student has graduated or withdrawn.
Replayment deferment can be requested by the parent on the application or by contacting the loan servicer once fully disbursed.
To find out who your loan servicer(s) is, please log onto the National Student Loan Data system (NSLDS), using your PIN number (as assigned when you signed the FAFSA). The National Student Loan Data System is the U.S. Department of Education's (ED's) central database for student aid recipients of Title IV Aid to access and inquire about their Title IV loan and/or grant data.
Where can I get additional information?
For more information, visit the Direct Loans - Parent PLUS information website.
Are there any loan fees?
In addition to loan interest, there are fees associated with borrowing a Federal Direct PLUS Loan. The U.S. Department of Education charges a 4% gross fee, and then gives borrowers an up-front rebate of 1.5%. This means that a net fee of 2.5% of the total amount borrowed each year will be charged. This fee is deducted from the loan by the Department of Education before the proceeds are credited to a student's account.
IMPORTANT NOTE ABOUT THE UP-FRONT REBATE: The up-front rebate reduces the fee borrowers pay at the point of loan origination. However, if the first 12 monthly payments are not made consecutively and on time, the U.S. Department of Education will add the 1.5% rebate back to your loan balance.
Student Loan Ombudsman
If you are in a dispute about your federal student loan, contact the Federal Student Aid Ombudsman Group as a last resort. They are available to assist in resolving disbuputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, Guaranteed Student Loans, and Perkins Loans.
For more information on this assistance please review their webpage.