The following email was sent to all students who completed the FAFSA in 2009-2010.
March 3, 2010
Lending Program Changes at IIT
Illinois Institute of Technology currently participates in the Federal Family Education Loan (FFEL) Program, which allows students to borrow funds for school costs from private lenders. Effective beginning the Fall 2010 academic term, Illinois Institute of Technology will withdraw from the FFEL lending program and begin to participate exclusively in the William D. Ford Federal Direct Loan (DL) Program. This change will NOT affect any existing loans for the 2009-2010 academic year.
Actions Required for the Direct Loan Program
Because of this change, all students who borrowed loans in the 2009-2010 academic year AND plan on borrowing federal loans in 2010-2011 will need to complete a Direct Loan Master Promissory Note (MPN).
Instructions on how to complete a DL MPN will be posted on the Office of Financial Aid Web site in April 2010. We will send an announcement via email once the instructions are available.
Why We Are Making the Change
Illinois Institute of Technology has decided to make this positive change to provide better service to our students and their families.
Under the Direct Loan program, students borrow directly through the federal government by completing an MPN for a Direct Loan at the school they are attending. Students will have similar repayment options and interest rates, except for the Parent PLUS and Graduate PLUS loans (which have a lower interest rate), as under the FFEL program. Payments for a Direct Loan are made directly to the U.S. Department of Education's servicer.
The switch to the Direct Loan program will provide many benefits, including:
- Elimination of the hassles associated with lenders exiting the FFEL program, including the loan process delays caused by the need to reprocess student loans
- Ease of working with one lender and making one payment (at the time of repayment) for new borrowers
- Ability for returning borrowers to consolidate FFEL program loans with their DL program loans at the time of repayment
- Lower interest rate on Parent PLUS and Graduate PLUS loans — currently 7.9% (versus 8.5%)
- Interest rate reductions for on-time payments and numerous repayment options for students
- Opportunity for students to participate in the Public Service Loan Forgiveness Program
We believe that using the Direct Loan Program is the very best way to ensure that IIT students receive their loan funds in a timely and efficient manner. For more information regarding the change to the Direct Loan program, please contact the Office of Financial Aid at 312.567.7219 or via email to firstname.lastname@example.org, or better, simply stop by our office located on the 1st floor of Main Building.
Gerald P. Doyle
Undergraduate Admission and Financial Aid
Illinois Institute of Technology