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College of Notre Dame is moving to Direct Lending for federal Stafford, PLUS, and Grad PLUS loans beginning with the 2010-11 school year.

College of Notre Dame is committed to providing detailed and accurate information and guidance to assist students in the financial aid process. We understand the Direct Loan Program, federal consolidation loan program, and private alternative loan programs can be confusing for both student and parent loan borrowers.

Why is College of Notre Dame moving to Direct Lending?

  • Security- Due to changes in laws which govern federal student loans, as well as the tightening credit markets and the effect on private lenders, Direct Loans offer the most secure and efficient manner of obtaining federal loans for our students. Last year, many private lenders stopped making loans to students; others altered their processes mid-year. The DL program will minimize the impact of the current student loan crunch for students and families.
  • Simplification- Students should find that Direct Loans offers a more streamlined process for obtaining loans. Direct Loans does not sell loans to other companies, therefore students can avoid the confusion of signing paperwork with different lenders, locating loan holder information or losing a lender altogether.

  • Volatility in the credit markets and reductions in lender subsidies have caused many lenders to stop offering borrower benefits and reduce their level of customer service. Several major lenders have made changes to their program that caused a delay in students receiving funds or other inconveniences. Some have dropped out of the FFEL program altogether, sometimes without notice.The Direct Loan program is not impacted by changes in the economy.We believe that this program will offer students and parents a more streamlined, stable, and predictable borrowing experience.

What are the steps to receive a Direct Loan?

Please visit the Stafford, PLUS or Grad PLUS Loan Process link for information on how to apply for and receive a Direct Loan.

Why do I have to complete another Master Promissory Note (MPN)?

You must sign a new Master Promissory Note whenever changing lenders.

What will happen to my previous loans that I have borrowed from other lenders?

You have several options upon graduation:

  • You may make individual payments to each lender.
  • You may consolidate all loans with your previous lender or with the Department of Education. Look at benefits of all options.

If I change loan programs, will my other loans go into repayment?

No, your other loans will not go into repayment unless your enrollment falls below half time.

Where can I go to consolidate?

You have two options:

  • You can contact your previous lender for information on consolidating with them.
  • You can visit the Federal Direct Loan Consolidation website at http://loanconsolidation.ed.gov

What are the differences between the two types of consolidation loans?

Check with your existing loan holder or servicer to find out about consolidation options, but some differences may include:

  • Minimum balances or number of loans required to apply.
  • Types of loans that can be consolidated.
  • A prior account relationship may be required.
  • Repayment incentive benefits to encourage good repayment behavior.
  • More information can be found at http://loanconsolidation.ed.gov

Who is eligible for a Direct Consolidation Loan?

  • Borrowers with at least one Direct Loan or FFEL loan that is in grace, repayment, deferment, or default status.
  • See http://loanconsolidation.ed.gov for more detailed information.

Contacts for the Direct Loan program: