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Direct Loans for Medical School Students

Direct Student Loan Changes

New Borrowers At This University

• Effective July 1, 2010 the William D Ford Federal Direct Loan program will be the sole provider of Federal Stafford, Plus, and Graduate Plus loans.
• Go to the Direct Student Loan website for more information including to complete the Master Promissory Note (MPN) and sign using your FAFSA PIN. New borrowers must sign the Master Promissory Note before we will certify your loan with the lender. If you don't complete the online MPN, the lender will automatically mail you a pre-printed paper MPN, but this process is slower and may delay your funds.

William D Ford Direct Loan Program

Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (hereinafter will be called "the Lender") rather than a bank or other financial institution. With Direct Loans, you

• Borrow directly from the federal government and have a single contact-the Direct Loan Servicing Center-for everything related to the repayment of your loans, even if you receive Direct Loans at different schools.
• Have online access to your Direct Loan account information 24 hours a day, 7 days a week at Direct Loans on the web at www.dl.ed.gov
• Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.
• Med students (1st, 2nd and 4th year) are not eligible for subsidized loans (loan period starts after July 1, 2012). 

Learn how the new federal program impacts Nevada students

1. Why is the university switching from the Federal Stafford Loan program to the Federal Direct Loan Program?

   On March 26, Congress and President Obama officially ended the Federal Family Education Loan Program that provided authorization for lenders to make the Federal Stafford and PLUS Loans. Beginning July 1, 2010, the lender based Federal Stafford and PLUS loan programs will be replaced by the Federal Direct Loan program at every participating college and university.

2. What happens if I borrowed a Stafford Loan previously, but now must borrow a Direct Loan?

   Everyone borrowing the Federal Direct Loan for the first time will have to sign a new promissory note on the U.S. Department of Education's website. If you have never borrowed a Stafford loan you will need to complete Entrance Counseling online as well. Previous borrowers at UNR who have already received Stafford loans do not have to complete entrance counseling again. Once completed, we will certify your loan for disbursement.

3. Are the terms and condition of the Direct Loans the same as the Federal Stafford and PLUS Loans?

   The grace period, deferments, repayment periods, and alternate repayment plans are identical with FFELP loans. While the interest rate on the Stafford Loan and Direct Loan are identical, the interest rate on the Federal Direct PLUS loan is 7.9% compared to the 8.5% fixed rate on the FFELP PLUS loan. The Direct Loan program may also offer you a rebate, which reduces the fee deducted from the loan. Rebate amounts, if any, will be available in June. Note that this rebate is added back to your loan principal if you fail to make your first 12 monthly payments on time when you enter repayment.

4. If I have both the Federal Stafford and Direct Loans, will I have to make two payments when I enter repayment?

   You have the option (and are generally encouraged) to consolidate your Federal Stafford and Direct Loans into a Federal Direct Consolidation loan. The option to consolidate your Federal Stafford Loan and Federal Direct loan into a consolidation loan while you are still in school was reinstated when the budget reconciliation bill was signed. If you choose to consolidate while in school or before repayment you will lose your 6 month grace period and repayment would begin immediately when you graduate or drop below half-time. If you choose not to consolidate your loans, you would have two payments, just as you would if you borrowed a Stafford Loan from two different lenders. Since most lenders have been selling their Stafford loans to the U.S. Department of Education, it is likely that your loan will be serviced by the same company servicing Direct Loans, potentially resulting in a single payment anyway. You will, however, have to pay a minimum monthly payment on each loan if you do not combine them into a single consolidation loan.

5. Do I have the option to stay with my current lender and borrow a Federal Stafford Loan?

   No. Now that the program has been discontinued by the federal government, your lender cannot offer you a Federal Stafford loan for the Fall 2010 or Spring 2011 academic year. Commercial lenders will be limited to offering only private, credit-based, market-driven loan. You may be eligible to borrow from your previous lender for this summer school session though.

6. Who would I talk to if I have questions or problems with my Direct Loan?

   Your first contact would remain with the University of Nevada, Reno Financial Aid Scholarships Office. We should be able to resolve most "in-house" issues. Once you go into repayment, most of your communication will be with the loan servicing company assigned to your loan by the U.S. Department of Education. You can track your loans on the National Student Loan Data System at www.nslds.ed.gov. For help in resolving loan issues with lenders, servicers or guarantors contact the Federal Student Loan Ombudsman.

Grad PLUS Loans

To borrow the Graduate PLUS Loan, please read all the information below and complete and submit the Graduate PLUS Loan Activation Form. You may submit the Graduate PLUS Loan Activation Form in person to Student Financial Aid and Scholarships, 3rd floor, Fitzgerald Student Services Bldg., via U.S. Mail to Mailstop 0076, Reno, NV 89557 or via fax (775) 784-1025. Processing instructions are listed on the back page.

WHAT ARE THE BORROWING REQUIREMENTS?

This is a loan program for graduate students. The borrower is required to file a Free Application for Federal Student Aid (FAFSA) and have considered your Stafford loan eligibility for the academic year. The borrower is required to pass a credit check and also meet the general eligibility requirements for federal financial aid. For example, you must meet citizenship requirements and may not be in default or owe a refund to any financial aid program. You must also be enrolled at least half-time, and eligible for aid including Satisfactory Academic Progress requirements.

HOW MUCH CAN I BORROW?

The yearly maximum on a Graduate PLUS Loan is equal to the student budget minus other financial aid/scholarships. For example, if your student budget is $19,600 and you were offered $18,500 in other financial aid/scholarships, you could borrow up to - but no more than - $1,100 in Graduate PLUS. The Offer Letter identifies the student budget and all available financial aid/scholarships. You can view the most recent Offer Letter via MyNEVADA, under "Fin. Aid Offer".

WHAT'S THE INTEREST RATE ON GRADUATE PLUS LOANS?

The interest rate on the Direct Graduate PLUS Loan is fixed at 7.9%. Interest is charged from the date the first disbursement is made until the loan is fully repaid.

ARE THERE LOAN FEES?

Yes, you may pay a fee of up to 4% of the loan amount. This fee is deducted proportionately each time a loan disbursement is made. A portion of this fee goes to the federal government to help reduce the cost of the loans.

HOW ARE LOAN FUNDS DISBURSED?

If approved, the lender electronically disburses funds to the University. One-half of the total loan, minus fees, is disbursed each semester. The funds are used to pay all outstanding obligations to the University. Funds remaining after all University charges are paid are made payable to the student through direct deposit to a checking account or by check mailed from the Cashier's Office. You may change your mailing address via MyNEVADA.

CAN I CANCEL MY GRADUATE PLUS LOAN AFTER I APPLY?

Yes, our office notifies you in writing whenever funds credit the student's account. You may cancel all or a portion of the loan in writing within 14 days after the date of the notice. If you cancel the loan, tuition, fees, and other charges must be paid by the semester fee payment deadline or arrangements made with the Cashier's Office for a deferred payment plan. If you receive Graduate PLUS Loan funds directly from the lender by check, you may refuse the funds by not endorsing the check and returning it directly to the lender.

WHEN DOES REPAYMENT BEGIN?

Repayment begins within 60 days after the 2nd disbursement for the academic year. There is no grace period, so interest begins to accumulate at the time the first disbursement is made. The graduate student borrower must begin repaying both principal and interest while the student is in school. Borrowers have the option to contact their lender to inquire about a forbearance while in school.

NEW BORROWERS AT THIS UNIVERSITY

1. Effective July 1, 2010, the William D Ford Federal Direct Loan program will be the sole provider of Federal Stafford, Plus, and Graduate Plus loans.
2. Go to the Direct Student Loan website for more information including completing the Master Promissory Note (MPN) and signing using your FAFSA PIN. New borrowers must sign the Master Promissory Note before we will certify your loan with the lender. If you don't complete the online MPN, the lender will automatically mail you a pre-printed paper MPN, but this process is slower and may delay your funds.

WILLIAM D FORD DIRECT LOAN PROGRAM

Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (hereinafter will be called "the Lender") rather than a bank or other financial institution.

With Direct Loans, you

1. Borrow directly from the federal government and have a single contact-the Direct Loan Servicing Center-for everything related to the repayment of your loans, even if you receive Direct Loans at different schools.
2. Have online access to your Direct Loan account information 24 hours a day, 7 days a week at Direct Loans on the web at the William D Ford Federal Direct Loan program
3. Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.

PROCESSING INSTRUCTIONS

1. Decide how much you wish to borrow. Refer back to the above section on "How Much Can I Borrow?" If you want to borrow a lesser amount than the maximum, write in the amount on the Graduate PLUS Loan Activation Form.
2. Complete and submit the Graduate PLUS Loan Activation Form to our office.
3. Our office certifies the loan and electronically transmits the data to the lender.
4. If you did not complete the MPN on the Internet, you will receive a pre-printed Graduate PLUS MPN from your lender. Complete the reference section and any other requested information and return it promptly.
5. If you are a first-time borrower of a Graduate Plus loan you must complete and successfully pass Entrance Counseling online. Go to Student Loans and follow the directions for the Graduate Plus.
6. Your lender conducts a credit check with a national credit bureau before approving the loan. If the loan is approved, you receive a "Notice of Guarantee" (NOG) from the lender which identifies approximate dates for the electronic disbursement of funds from the lender to the University. Typically, funds are credited to the University's bank account within three working days after the NOG date however, per federal regulations, funds cannot be disbursed to the University any earlier than 10 days prior the start of classes each semester. If the lender denies the loan, the student may contact our office for other borrowing options.
7. When the University receives funds, our office confirms your eligibility for aid, including Satisfactory Academic Progress. Our office also checks enrollment status (full time=9 or more graduate credits; 3/4 time=7-8 graduate credits; or 1/2 time= 5-6 graduate credits). If you are still eligible, the funds are credited to your student account and all outstanding financial obligations to the University are paid (fees, tuition, housing, etc).
8. Our office notifies you in writing after each loan disbursement. The notification details the fund program(s) and amount(s) disbursed into your student account.
9. It is your responsibility to read "The Guide: You've Got Questions; We've Got Answers" and maintain Satisfactory Academic Progress standards. The Guide is available on our website in the "Financial Aid Library" section.