Beginning with the Summer 2009 session, James Madison University will participate exclusively in the Federal Direct Loan (subsidized and unsubsidized student loans), Federal Parent PLUS Direct Loan, and Federal Grad PLUS Direct Loan programs. Students and parents will be required to use the Direct Loan program for all federal student and parent loans.
The traditional Federal Family Educational Loan Program (FFELP) loans (i.e., Stafford Loan, Parent PLUS Loan, and Grad PLUS Loan) through banks, credit unions, and other student loan lending companies will no longer be processed at JMU, as we will stop doing business with these lenders and join the Federal Direct Loan program. Under this program, students borrow from the federal government through their colleges and lenders are eliminated from the picture.
The Direct Loan program has been in existence since the early 1990's, and schools like Virginia Tech, Virginia Commonwealth University, and Old Dominion University already participate in this program. So, JMU is joining an established loan program in order to provide better loan products for our students and parents.
As a result of many legislative changes over the past few years, as well as recent economic issues, FFELP loans are often more costly to borrowers than Direct Loans. Additionally, many FFELP loans are being sold by lenders to the federal government. We hope this chart will help you understand the differences in these two programs, and why JMU is making this change. In keeping with our mission to “assist (students) with identifying and obtaining resources to finance higher education…” we conducted extensive research to determine which program would be in the best interest of our student and parent borrowers. That research led us to the conclusion that the Direct Loan Program offers a better, more affordable, product.
Instructions for how to apply for a Federal Direct Loan (subsidized and unsubsidized), Federal Parent PLUS Direct Loan, and Federal Grad PLUS Direct Loan will be provided with the financial aid award notice.
Please go to http://www.jmu.edu/finaid/dlchart.shtml to view a chart designed to help you understand the differences between the Direct Loan Program and FFELP, and why JMU is making this change.
For answers to the most commonly asked questions concerning Direct Loans, including the steps each borrower needs to take in order to apply for a Direct Loan, please go to http://www.jmu.edu/finaid/directloanfaq.shtml.