UM Transition to Direct Loans

At the end of the spring semester of the 2009-2010 academic year the University of Miami will end its participation in the privately funded Federal Family Education Loan (FFEL) program Stafford student loans, Grad Plus Loans, and Parent Loans for Undergraduate Students (PLUS). Beginning with Summer 2010 enrollment we will transition to the U.S. Treasury funded student and parent Federal Direct Loans. Information about the Direct Loan program can be found in the U.S. Department of Education's "Your Federal Student Loans: Learn the Basics and Manage Your Debt".

Much of the loan process will remain the same, but there are several important changes.

Selecting a Lender
Under the federal Direct Loan program borrowers do not select a lender, nor can previous private lenders make Direct Loans. All Direct Loans are funded through the U.S. Treasury with the University serving as the liaison.

Accepting a Stafford Loan offered in a Financial Aid Award
A Stafford student loan will be offered in the financial aid award presented on myUM for students determined eligible by filing the Free Application for Federal Student Aid (FAFSA). The loan is an opportunity and there is never an obligation to use a student loan. The loan must be either accepted or declined on the myUM award screen.

Loan Entrance Counseling
First time borrowers under the FFEL program required completion loan entrance counseling providing information on the loan provisions and the borrower's rights and responsibilities. Current FFEL borrowers that have completed the FFEL entrance counseling are NOT required to complete a new session for the Direct Loans.

Master Promissory Note
All borrowers under the Federal Direct Loan program must complete a Direct Loan master promissory note, even if a FFEL program note is already on file. The Direct Loan master promissory note is completed on the U.S. Department of Education's Direct Loan web site. Notice to complete the promissory note will be sent to borrowers accepting a Direct Loan.

The Office of Financial Assistance Services is ready to respond to questions regarding the transition to Direct Loans. Questions will be entertained by e-mail at OFAS@miami.edu, or by telephoned to 305-284-5212.