Direct Loan Program Information & FAQs

Beginning with the 2010/2011 academic year, Meharry Medical College will participate in the William D. Ford Federal Direct Loan program. This means that students will now borrow their subsidized, unsubsidized and Grad PLUS loans directly through the U. S. Department of Education, rather than through lenders participating in the Federal Family Education Loan Program (FFELP) such as Sallie Mae, Access Group, Regions, EdAmerica, etc.

On March 30, 2010, President Barack Obama signed the Health Care and Education Reconciliation Act of 2010. This Act encompasses a major piece tailored toward funding education and assisting students with more affordable options to financing their education.

The Direct Loan Program ensures the availability of funds, reduced fees versus the FFELP program and is simpler and faster.

Switching to Direct Loans will provide the following benefits:

• Eliminates the complexity of using multiple lender systems
• Eliminates the uncertainty of losing lenders and being out of compliance with federal regulations
• Eliminates the need for reprocessing loans for students when lenders leave the program
• Gives the seminary control over the creation and timing of loans
• Gives the seminary control over the disbursement of funds
• Provides one lender and one payment for new borrowers
• Allows returning borrowers to consolidate FFELP loans with their Direct Loans at repayment
• Provides a lower interest rate on the Grad PLUS loan
• Offers five repayment options for students
• Interest rate reductions for on-time payments
• Allows students to participate in the Public Service Loan Forgiveness Program

You can complete your Master Promissory Note for the Federal Direct subsidized and unsubsidized Loans and for the Graduate PLUS Loan by clicking here. Loan funds cannot be disbursed without a completed MPN or *entrance counseling (*required first-time borrowers at Meharry Medical College).

Frequently Asked Questions (FAQ) and Answers about the Direct Loan Program

What is the difference between the FFELP and the William D. Ford Federal Direct Loan Program?

In the Direct Loan Program, the U.S. Department of Education acts as a lender, providing funds for Stafford loans and the Grad Plus loans. With FFELP, students chose a bank or lender.

What steps do I need to take to apply for the Federal Direct subsidized, unsubsidized, and Grad PLUS Loans through the Direct Lending program?

• Apply for financial aid via FAFSA
• Wait to receive your award letter from the financial aid office that will be viewable via Banner self-service system (An e-mail will be sent to acknowledge completed awards)
• Follow the steps and/or instructions on your award letter

What is the interest rate on the Federal Direct subsidized/unsubsidized Loan Program?

The interest rate is fixed at 6.8%.

What is the interest rate on the Federal Direct Grad PLUS Loan?

The interest rate is fixed at 7.9%.

Does the Federal Direct subsidized/unsubsidized loans program have any fees?

Yes. See chart below.

Does the Federal Direct Grad PLUS Loan have any fees?

Yes. See chart below.

How does the credit check process work on the Federal Direct Grad PLUS Loan?

Once the borrower completes the Master Promissory Note (MPN), which includes the applicants authorization for a credit check to be completed the borrower will receive written confirmation of the credit check result.

When does the credit check process take place?

The school sends notification to the Direct Loan program within 5 days after the student accepts their award in Banner.

How long is the credit check valid for?

A credit check is valid for 90 days.

Can endorsers of Federal Direct Grad PLUS Loans complete the endorser addendum online?

No. A customized paper endorser addendum form would be mailed directly to the borrower.

Do I need to complete a new Entrance Interview for the Direct Loan program?

Yes. Students need to be aware of the differences in the Direct Loan Program versus the FFELP program.

Does the Direct Loan program have in-school deferment for graduate/professional students?

Yes. Graduate/professional students who have Federal Direct Loans and/or Grad PLUS are placed in an in-school deferment status based on the information reported by the school.

Does the Direct Loan program allow borrowers to defer payments?

Yes. The Direct Loan program offers the same deferments that are available to borrowers in the Federal Family Education Loan Program (FFELP).

Who will be my servicer for the Direct Loan program?

You will be directly notified by the Direct Loan Program as to whom your servicer will be.

Who should I contact if I have questions about the Direct Loan program?

Please contact the Office of Student Financial Aid at (615) 327-6826 or by e-mail at finaid@mmc.edu

For more information contact:

Meharry Medical College
Student Financial Aid
1005 Dr. D.B. Todd Jr. Blvd.
Nashville, TN 37208
(615) 327-6826
finaid@mmc.edu