May 4, 2010 by Louie Calderon NMSU NewsCenter
Student loan borrowers at New Mexico State University will now receive their loans directly from the U.S. Department of Education, following changes in the federal student loan program.
Federal law now requires all institutions throughout the nation to participate in the William D. Ford Federal Direct Loan Program, which means students will no longer receive their loans from a bank or other lending entities.
“NMSU is encouraging all students to go through the new process as soon as possible,” Catherine Salcido, NMSU financial aid loan coordinator. “By doing it now, it should ensure that there should be no delays in receiving their student loan for the upcoming semester.”
All NMSU students with existing loans or who wish to receive loans in the future will need to sign a new master promissory note (MPN) with the U.S. Department of Education and complete new entrance counseling. Both can be done at www.studentloans.gov.
The MPN is the legal agreement a student signs accepting student loan funds that states the terms and conditions of the loan, including a repayment schedule, interest rate deferment policy and cancellations.
The entrance counseling is a federal requirement of all student loan borrowers that provides useful tips to help develop a budget for managing educational expenses.
Students who have existing loans have the option of consolidating with the new loan program so that payment is made to only one loan borrower.
“One of the benefits for student loan borrowers under the new program is that they will now have a single contract through the Direct Loan Servicing Center for everything related to the repayment of their student loans, even if a student had received loans at different schools,” Salcido said.
Students can access their direct loan account anytime at www.dl.ed.gov.
Through the new program, students will receive the same interest rates and have similar repayment options.
Students must still follow the same process of filling out a Free Application for Federal Student Aid (FAFSA) each year before a financial aid award is offered to them.
For more information, visit http://www.studentloans.gov.