Direct Loans at PCOM - Beginning with the summer 2010, PCOM will participate in the federal Direct Loan program for all federal student loans. Direct Lending offers a guaranteed source for educational loan funds. The program allows students to apply directly to the Department of Education for Stafford, Graduate PLUS, or consolidation loans, thereby simplifying the loan process. Direct Lending provides a permanent, stable lending source, more timely and accurate disbursement of funds, and single centralized unit responsible for processing all types of federal loans.
Benefits of the Direct Loan program to students include a lower interest rate of 7.9 percent for Graduate PLUS loans compared to the FFEL Graduate PLUS at 8.5 percent. Additionally, the program offers a fee rebate at the time Stafford loans are disbursed. This up front rebate makes more funds available to the borrower to cover educational costs. There is a requirement to keep the rebate of 12 on-time payments when the borrower enters repayment.
Until now PCOM has participated in the Federal Family Education Loan Program (FFELP), in which private lenders, such as banks, offered federal loans to student borrowers. Recent economic changes have forced many lenders to exit the FFELP program. Those remaining can no longer offer the cost reduction benefits to borrowers that they once provided. It was the institution’s concern that in the past two years over 80 percent of our students have needed to change lenders in order to obtain federal loans, that led to the switch to the Direct Loan program.
PCOM is committed to providing the best service, information, and payment options available to our students. Participating in the federal Direct Loan program will provide a simple, stable, state of the art system to support our students and staff in achieving that goal. For more information visit www.direct.ed.gov.
