Direct Subsidized Loan

Direct Unsubsidized Loan Borrowers

Notice To All U.S. Student Borrowers: Participation in the Direct Loan Program Begins July 2010

The Royal Welsh College of Music and Drama will participate in the William D. Ford Federal Direct Loan (Direct Loan) Program beginning Academic Year 2010/11. Students from the United States (U.S.) who attend our school previously received loans through the Federal Family Education Loan (FFEL) Program. U.S. students will now borrow through the Direct Loan Program. The Direct Loan Program offers the same types of loans as the FFEL Program, and Direct Loans generally have the same terms and conditions as FFEL Program loans. However, instead of a bank lending the money, the U.S. Department of Education (the Department) lends the money directly to students through the student’s school. There are also some differences in the names of the loans. The FFEL Program’s Federal Stafford Loans (subsidized and unsubsidized) are called Direct Subsidized Loans and Direct Unsubsidized Loans in the Direct Loan Program.

Benefits of the Direct Loan Program

Direct Loans and FFEL Program loans have the same annual and aggregate loan limits, the same deferment and cancellation provisions, and most of the same repayment plans (Standard, Graduated, Extended, Income-Based). The interest rates for FFEL Program Stafford Loans and Direct Subsidized Loans/Direct Unsubsidized Loans are also the same. Direct Loans also have some benefits that are available only in the Direct Loan Program:

  • Up-Front Interest Rebate
  • Income Contingent Repayment Plan (in addition to the Income-Based Repayment Plan)
  • Public Service Loan Forgiveness Program
  • No interest charged (for up to 60 months) during qualifying periods of active duty military service (for loans first disbursed on or after October 1, 2008)

Eligibility for Direct Loans

You will need to complete the Free Application for Federal Student Aid (FAFSA), just as you did under the FFEL Program. We will use the information from your FAFSA to assist in determining your eligibility for a Direct Subsidized Loan and/or a Direct Unsubsidized Loan.

  • You may complete the FAFSA electronically via the FAFSA website
  • To complete the FAFSA electronically, you must have a Federal Student Aid PIN. To apply for a PIN if you do not already have one, or for customer service regarding a previously assigned PIN, visit the Federal Student Aid PIN website
  • After the Department processes your FAFSA, you will receive a Student Aid Report (SAR). Please retain the SAR for your records and be prepared to provide it to us if we ask.

In addition to completing a FAFSA, you will need to be accepted in a degree-granting program (or otherwise eligible program) at our school on at least a half-time basis and meet other eligibility requirements such as maintaining Satisfactory Academic Progress (SAP) and being within the borrowing limits for Direct Subsidized Loans and Direct Unsubsidized Loans.

After we determine your eligibility for a Direct Subsidized Loan and/or a Direct Unsubsidized Loan, we will notify you of the loans and amounts for which you are eligible. Depending on your status, we may also include information about a Direct PLUS Loan award for which you or your parent may be eligible. (If you are a graduate/professional student, you may be eligible for a Direct PLUS Loan; if you are a dependent undergraduate student, your parent may be eligible for a Direct PLUS Loan.)

Direct Loan MPN Completion

You must complete a Direct Loan Master Promissory Note (MPN). Although you may have previously signed an MPN to receive FFEL or Direct Loan Program loans, these MPNs cannot be used to make Direct Loans at our school.

The MPN is the legal document through which you promise to repay your Direct Loans and any accrued interest and fees to the Department. It also explains the terms and conditions of your loans. In some cases, a Direct Loan MPN can be used to make loans for up to ten (10) years. However, you will need to complete a new Direct Loan MPN each academic year that you receive a Direct Subsidized Loan and/or a Direct Unsubsidized Loan at our school.

  • You may complete a Direct Loan MPN electronically via the StudentLoans.gov website
  • To complete a Direct Loan MPN electronically, you must have a Federal Student Aid PIN. This is the same PIN used to complete the FAFSA.
  • After you complete your MPN, you will be able to print and retain it for your records. You do not need to provide us with a copy; we will be notified electronically of your completion.

Note: You also have the option to complete a paper Direct Loan MPN. To do so, call the Department’s Applicant Services staff at 800/557-7394 and then return the completed paper MPN to the Department at the address included in the instructions that will be provided to you. We will be notified of your completion.

Direct Loan Entrance Counseling Completion

If you are an undergraduate or graduate/professional student and have not previously received a FFEL Stafford Loan, Direct Subsidized Loan, or Direct Unsubsidized Loan, you must complete Direct Loan Entrance Counseling before you can receive a Direct Loan.

  • You may complete Direct Loan Entrance Counseling electronically via the StudentLoans.gov website
  • To complete Direct Loan Entrance Counseling electronically, you must have a Federal Student Aid PIN. This is the same PIN used to complete the FAFSA.
  • After you complete entrance counseling, we will be notified electronically.

Consolidating FFEL Program Loans into the Direct Loan Program

If you already have FFEL Program loans and will now be receiving Direct Loans, consolidating your FFEL and Direct Loan program loans together into a Direct Consolidation loan may make loan repayment easier. If you consolidate, you will have just a single monthly payment. Consolidating your FFEL Program loans into a Direct Consolidation Loan may also allow you to take advantage of certain benefits that are offered only in the Direct Loan Program, such as Public Service Loan Forgiveness and the Income Contingent Repayment Plan.

To learn more about when you may consolidate, the pros and cons of doing so, and the application process, visit http://www.loanconsolidation.ed.gov/ or call 800/557-7392 (TDD/TTY: 800/557-7395).

Additional Information

The Royal Welsh College of Music and Drama looks forward to participating in the Direct Loan Program and offering the benefits of Direct Loans to our U.S. students. For additional information about Direct Loans, visit http://www.direct.ed.gov/student.html or contact us at finance@rwcmd.ac.uk for more information.