The William D. Ford Federal Direct Loan program provides long-term academic loans to qualified students who are enrolled in higher education, vocational, technical, business and trade schools. The federal government provides funds for direct loans directly to the student, bypassing an outside lender. Students who receive these funds cannot receive FFEL (federal family education loan) funds during the same enrollment period.
Use the Direct Lending Management and the Manage Direct Loan Application components for processing the Subsidized Stafford, Unsubsidized Stafford, PLUS loans, and Grad PLUS loans awarded to students attending your institution. Eligibility and rules vary for direct loans as follows:
• A student's eligibility for a Direct Subsidized Stafford loan is determined on the student’s demonstrated financial need. Because the U.S. Department of Education subsidizes the interest, the borrower is not charged interest while enrolled in school at least half-time, and during grace and deferment periods.
• A student is eligible for a Direct Unsubsidized Stafford loan regardless of their financial situation. Borrowers pay the interest on these loans.
• Parents borrow Direct PLUS loans on behalf of their dependent students who are enrolled at least half-time. Borrowers pay the interest on these loans.
• Graduate or professional students borrow Direct Graduate/Professional PLUS loans, or Grad PLUS loans, for themselves. The award amount is the cost of attendance less any financial aid for FAFSA applicants.
Direct Lending uses common origination and disbursement (COD) processing.
Upon completion of this lesson, you will be able to:
• Override Direct Loan bio/demo information.
• Originate a Direct Loan.
• View the Direct Loan application component.
• Review a Direct Loan promissory note.
• Print a Direct Loan promissory note.
• Print a Direct Loan manifest.
• Generate a Direct Loan validation errors report.
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