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UMBC is Moving to Direct Lending

1.   Why is UMBC moving to Direct Lending for the 2009-2010 school year?

  • Easier for students to understand where to go for information.
  • Less complex process - The Department of Education is the lender/service and there is no guarantor.
  • Quicker – loan funds can be posted within days after student becomes eligible.

2.   What are the steps to receive a Direct Loan?

3.   Why do I have to complete another Master Promissory Note (MPN)?
You must sign a new Master Promissory Note whenever changing lenders. This will be the last promissory note you have to sign while you attend UMBC or any other Direct Lending institution.

4.   How and when do I complete a Direct Loan Master Promissory Note?
UMBC is utilizing the Direct Lending program beginning in the 2009/2010 school year, which begins with summer 2009. You can complete the Direct Loan Master Promissory Note now. You may do so at https://dlenote.ed.gov/empn/index.jsp

5.   What will happen to my previous loans that I have borrowed from other lenders?
You have several options upon graduation:

  • You may make individual payments to each lender.
  • You may consolidate all loans with your previous lender or with the Department of Education. Look at benefits of all options.

6.   If I change loan programs, will my other loans go into repayment?
No, your other loans will not go into repayment unless your enrollment falls below half time.

7.   Where can I go to consolidate?
You have two options:

  • You can contact your previous lender for information on consolidating with them.
  • You can visit the Federal Direct Loan Consolidation website at http://loanconsolidation.ed.gov

8.   What are the differences between the two types of consolidation loans?
Check with your existing loan holder or servicer to find out about consolidation options, but some differences may include:

  • Minimum balances or number of loans required to apply.
  • Types of loans that can be consolidated.
  • A prior account relationship may be required.
  • Repayment incentive benefits to encourage good repayment behavior.
  • More information can be found at http://loanconsolidation.ed.gov

9.   Who is eligible for a Direct Consolidation Loan?

  • Borrowers with at least one Direct Loan or FFEL loan that is in grace, repayment, deferment, or default status.
  • See http://loanconsolidation.ed.gov for more detailed information.

10.   Contacts for the Direct Loan program: