Belmont Technical College will use the federal Direct Loan program as its source of federally backed Stafford loans beginning Summer 2009 for the 2009/2010 award year. Prior to this summer our students received their Stafford Loans through the FFELP Loan Program where private banks supplied the funds for the loans. Now our eligible students will obtain their Stafford loans directly from the Department of Education through the Direct Loan (DL) Program.

Why did Belmont Technical College make this change?

Volatility in the market place has led to a lack of banks that are remaining in the student lending industry and many of those that remain are not lending to community colleges such as BTC. Here at Belmont Technical College we have went from seven lenders to three lenders. Of the three lenders only one is lending consistently. Our students rely on the Stafford loans to meet their financial responsibilities and this uncertainty has not been beneficial to our students. Many students have had to do new Master Promissory Notes (MPN) multiple times as lenders have left the lending industry.

A move to the single lending Federal Direct Loan program will eliminate this volatility and students will have to do the MPN once.

Benefits to the Federal Direct Loan Program:

• Eliminates the volatility in the market place by providing a guaranteed source of funds.
• Students have an income based repayment plan with DL that does not exist in FFELP
• Student Fees are generally less in DL, DL is 0.5% where FFELP Lenders are charging 1%
• Should the student make a late payment in DL the late fees are less then FFELP
• Students in the DL program entering into public service jobs can have any remaining balance on the loans forgiven after 10 years of repayment while in service work; this option does not exist in FFELP.
• Many of our local schools are DL schools which would be a benefit to students who transfer from BTC to complete their bachelors. West Liberty, Ohio State, Ohio University including Eastern, and WVU are all Direct Loan Schools.

How does this affect you now and when you graduate?

Now— You have to complete a new Master Promissory Note (MPN) and a new Entrance Counseling. Once you complete the new MPN you will not have to complete it again while you are at BTC.

Upon Graduation —Students who have loans through the FFELP loan program with Great Lakes Higher Education and the Direct Loan program will have to make two separate payments when you enter repayment unless you consolidate your loans. You can consolidate all your Stafford Loans together with Federal Direct Consolidation Loans. For more information on consolidation go to http://loanconsolidation.ed.gov/ .

To learn more about the Direct Loan program and all the benefits go to

http://www.ed.gov/offices/OSFAP/DirectLoan/index.html

If you have any questions regarding our decision to enter the Direct Loan program please see a member of the Financial Aid staff or contact Jody Peeler Associate Dean of Student Financial Aid.