Sherman Shares May 2010 Newsletter
Student Information: Changes to Direct Lending
by Director of Financial Aid Kathy Wilson
The new healthcare legislation brought a change to student lending. Legislation was attached to the healthcare bill for all schools in the United States to make a switch to Direct Lending. What this means for students is that they no longer have a choice of lender. Any subsidized, unsubsidized or plus loans will be issued directly through the Department of Education.
This change takes effect July 1, 2010. Schools will have to make the change by then and have all new loan processing systems set up. Students will have to go to the Direct Lending web site and complete new Master Promissory Notes in order to receive loans. This should not adversely affect students and funding should still be on time.
This will, however, adversely affect many private lenders. I was notified recently that Sallie Mae will be laying off 700 employees in the state of Florida and 500 employees in the state of Texas. Sallie Mae is one of the fortunate ones, as they have secured a contract with the Department of Education to service new loans issued by Direct Lending. Other servicers include Great Lakes Education Loan Services and PHEA. These servicers will have to compete on a yearly basis for a contract to service the loans.
What this will mean for students is that there will be competition for the services provided to them. Good competition should make for better service. We can only hope this will be the case.
All students will need to go to the Direct Lending web site at https://studentloans.gov/myDirectLoan/index.action to complete entrance counseling and a new Master Promissory Note. If students are receiving a Graduate Plus Loan, they will also need to complete a new Master Promissory note for it. If any assistance is needed, please stop by the financial aid office for an explanation and help completing the necessary documents.
Sherman College of Chiropractic
P.O. Box 1452