PNew Electronic Master Promissory Note Required

New Electronic Master Promissory Note Required

IMPORTANT ANNOUNCEMENT FOR PARENTS AND STUDENTS: UE ENTERS DIRECT LOAN PROGRAM FOR FEDERAL LOANS — New Electronic Master Promissory Note (MPN) Required.

Beginning in the fall of 2009, there will be a change to the way that we administer both federal student (Stafford) and parent (PLUS) loans. It is important for those who currently borrow (as well as those who may consider borrowing for next year) to read this information.

An action step must be taken by all students and parents who wish to use these federal loans for 2009-10. All students and parents MUST complete a new electronic Master Promissory Note (MPN) at https://dlenote.ed.gov. Students will follow the link for "Complete New MPN for Student Loans" while parents should follow the link for "Complete New MPN for Parent PLUS Loans." Students and parents are encouraged to complete the MPN now. It is not necessary know the amount you wish to borrow; furthermore, completing the MPN does not mean that you have actually applied for the loan. Your MPN simply indicates your commitment to repay any loan you receive in the future.

The University of Evansville researched and compared the two federal loan programs, the Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan program (Direct Loans). UE has historically used the FFEL program, working with several recommended partner lenders. However, as a result of our research, UE will participate in the Direct Loan program beginning the fall semester 2009. When 2009-10 Financial Aid Notification Letters are sent to our students in June, we will include forms and information for the Direct Loan program for student and parent borrowers.

My staff and I are available to answer any questions you may have about the Direct Loan program or any issues about financial aid. Please contact the Office of Financial Aid at 800-424-8634 or 812-424-8634 for personal answers to your questions.

Sincerely,
JoAnn Laugel
Director of Financial Aid

More Information about the Direct Lending Program vs. FFELP

During our research it became evident that the Direct Loan program offered a superior way to serve our students and parents for a number of reasons:

FFELP funds are disbursed through lenders such as Fifth Third, Chase, Citi, Edamerica and Wachovia, which have been UE's primary school-partners for several years. A few lenders experienced cash flow problems this past fall that kept the loan funds from coming to our students at the beginning of the semester. This delay was problematic for students and for the University. The Direct Loan program is funded directly by the Federal Government, eliminating the issue with funding delays.
Direct Lending offers more repayment options for borrowers so that they can select a repayment plan after graduation that best matches their financial circumstances. Therefore, students who wish to enter fields which traditionally offer modest salaries such as teaching, social work, law enforcement, and the non-profit sector can repay their loans more comfortably. Furthermore, some borrowers may benefit from the new Public Service Loan Forgiveness program, after making 120 Direct Loan payments.
The Direct Loan program is fully integrated with the federal financial aid process, simplifying the administration and oversight of the government funds. UE already has the software and business process in place to administer this program due to the other federal programs we administer.
Students will only have to track their loans with one lender instead of multiple lenders — once we have phased in Direct Loans for new borrowers. Students will know who holds their loans and what the terms are.
Benefits advertised are part of the Direct Loan Master Promissory note, unlike the benefits advertised with the FFEL program which are not apart of the FFEL promissory note. Borrowers are assured to receive borrower benefits only if they are part of the signed promissory note.
Loans can be sold in FFELP, negating their borrower benefits. Loans are never sold in the Direct Loan program.

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