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Direct Loan Questions and Answers

Direct Loan Questions and Answers

What is a Direct Loan (DL)?

In the Direct Loan program, students borrow directly from the U.S. Department of Education through their school, rather than borrow from a private lender; such as a bank or credit union.

What types of loans are in the DL program and how does it operate?

The DL program offers the same types of loans as the FFEL program. They are Subsidized, Unsubsidized and Parent Plus loans.
 DL subsidized, unsubsidized and parent PLUS loans operate in essentially the same manner as in the FFEL program. Students and parents receive the same interest rates and have similar repayment options.

Why did McNeese State University choose to move to the Direct Loan Program?

Recently, legislation was passed to terminate the FFEL program effective July 1, 2010.
Our goal is to provide students with uninterrupted access to federal student loans.

Are there any differences in interest rates and fees between the two programs?

The interest rate for Direct Subsidized and Unsubsidized loans is the same as that of the FFEL program, 5.6% and 6.8% respectively. The parent PLUS loan interest rate is 7.9%, compared to the FFEL interest rate of 8%.

How can I apply for a Direct Loan?

The application process is the same as previous years. Students must complete the FAFSA and turn in all requested documents. The Office of Financial Aid will process your application and send you an email notification when your financial aid is ready to review and accept.

Will I have to sign a new Master Promissory Note?

Yes, all students that are borrowing from the Direct Loan program for the first time will have to sign an MPN with the U.S. Department of Education.

What happens to the Stafford loans that I borrowed in previous years; will they still be deferred now that McNeese is changing its loan process?

Your Stafford loans from previous years should remain in deferment as long as you are enrolled at least half time, which is 6 hours.

Where can I find information about who services my other federal loans?

You can find information about the servicing of your other federal loans at You will need your four digit pin number from the FAFSA to access this information.

How will repayment work if I have FFEL and Direct loans?

You will have to make separate payments to each lender. You may also choose to consolidate with the Direct Loan Program, upon graduating or exiting the university, if you would like to make only one payment each month. To learn more about consolidation please visit the Department's website at