General Information Regarding Direct Loans
Midwestern State University students who wish to borrow Subsidized, Unsubsidized and PLUS Loans will do so through the Federal Direct Loan program. Direct Loans are funded by the federal government, not a bank or credit union. Students must complete the current Free Application for Federal Student Aid (FASFA) before loan eligibility can be determined.
Here are some important Direct Loan highlights:
Funding is secure. Direct Loans are processed through the U.S. Department of Education and the funds come directly from the U.S. Treasury; banks or lending institutions do not fund the DL program. Annual maximum loan amounts are determined by the federal government.
Fees and interest rates are more favorable. Participating in this program is not only more secure, but many of the fees and rates are more favorable. For example:
- Federal Direct Loan fees are the same for all borrowers. When working with private lenders, these fees vary by lender and guarantor.
- Federal Direct Loans have lower origination fees than their private lender counterparts and that means more money to students up front.
- All funds are received electronically, which means no paper checks and no delays in the disbursement of funds.
- Interest rates are updated July 1 of every year.
Processing is streamlined. Unlike working with private lenders, direct loans allow students to:
- Borrow from one source – the U.S. Department of Education
- Complete one electronic application – via the Department of Education Web site
- Communicate with one entity regarding loan concerns – the Department of Education where these federal loans are made, guaranteed and serviced
Consolidation Loans exist. The program will allow and help students consolidate their student loan debt which may help prevent loan delinquency or default.
Additional Information Regarding the Direct Loan Program is available at