Direct Loan Notice

Dear Student,

Southwestern Oklahoma State University currently participates in the Federal Family Education Loan program, which allows students to borrow funds for school from private lenders.  SWOSU will be switching  from the FFEL lending program and begin participating exclusively in the William D. Ford Federal Direct Lending Program (DL) for the 2010-2011 aid year beginning in the fall of 2010.  No new loans will be processed in the current FFEL program after June 21, 2010.

This means that if you receive federal student loans to help finance your education, your loans at SWOSU will now be processed through the Federal Direct Loan Program.   All borrowers will be required to complete new entrance counseling and sign a new master promissory note through the Federal Direct Loan Program when applying for your student loans for the new academic year beginning in the fall of 2010.  Direct Loan Entrance Counseling and Promissory notes may be completed at any time at Studentloans.gov.  If you have been awarded loans and would like to accept them for the fall 2010 and spring 2011 please stop by the financial aid office to accept those loans after May 15, 2010.  Students may also send an email to SFS@SWOSU.edu to request that an award letter be mailed to their permanent address.

Your current loans will not be affected by this change.  They will remain with the lender or servicer that you have now.  You will have the option to consolidate all of your loans in the Federal Direct Loan Program.

In Direct Lending, students borrow directly from the U.S. Department of Education through SWOSU.  DL Subsidized, Unsubsidized and PLUS loans operate in essentially the same manner as in the FFEL program.  Students receive the same interest rates (except on PLUS loans which have a lower interest rate) and have similar repayment options.  Payments are sent directly to the U.S. Department of Education’s servicer.

Switching to Direct Loans will provide the following benefits:

• Provides one lender and one payment for new borrowers.
• Allows returning borrowers to consolidate FFEL loans with their Direct Loans at Repayment.
• Provides a lower interest rate on PLUS Loans.
• Offers five repayment options for students.
• Offers interest rate reductions for on-time payments.
• Allows students to participate in the Public Service Loan Forgiveness Program.

The change to the Federal Direct loan program will ensure that loan funds are available to our students.  If you have questions regarding this change, please contact the Office of Student Financial Services at 580-774-3786.

For more information  regarding Direct Loans you may visit the U.S. Department of Education web site at http://www2.ed.gov/offices/OSFAP/DirectLoan/index.html.  You may also contact Direct Loan Borrower Services at 800-557-7394.

Sincerely,

Jerome Wichert
Director, Student Financial Services

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