Federal Direct Loans
Federal Direct Loans are low-interest loans for students and parents to help pay for the cost of a student’s education after high school. The lender is the U.S. Department of Education. Additional information is available at StudentLoans.gov
The student must be enrolled at least half-time (6 credit hours) and meet general eligibility requirements for the Federal Student Aid programs. More information about these requirements is available through the Loan Entrance Counseling guide.
The types of students’ Direct Loans are Subsidized Direct Loans and Unsubsidized Direct Loans. Direct Subsidized Loans are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while the student is enrolled at least half-time, during the student’s grace period and during periods of deferment. Direct Unsubsidized Loans are not based on financial need and interest is charged during all periods.
Students must complete the Free Application for Federal Student Aid (FAFSA). First-time borrowers at Howard Payne University will be required to complete Entrance Counseling and a Master Promissory Note (MPN). This is a one-time requirement. In subsequent years, students who request a loan will be awarded a loan through the Serial Loan process. Students will be required to confirm that they want to continue to receive a Direct Loan under the MPN.
Federal Direct Student Loan Confirmation Process
If the student is awarded funds from the Federal Direct Loan, these instructions must be read and followed carefully.
- Accept the loan, and
- Complete Entrance Counseling and
- Complete the Direct Student Loan Master Promissory Note (MPN).
Both Entrance Counseling and the completion of the MPN is an on-line process. Complete information and instructions will be included with your Award Notification.
The Master Promissory Note (MPN) is a very important contract between the borrower and the lender. The MPN allows borrowers to receive multiple subsidized and/or unsubsidized Federal Direct Student Loans over a ten (10) year period. Each year that the student receives a Federal Direct Student Loan under the MPN, the student is required to confirm that he or she wishes to receive subsequent loans under the MPN.
A student will be defined as a “Previous Borrower” if all of the following conditions are met:
- Previously borrowed from the Federal Direct Student Loan, and
- Has a valid promissory note on file with the Dept. of Education as the lender
To confirm that the student wants to continue to receive loans under the MPN, the student must accept the loan(s) and complete the Loan Confirmation Form for the academic year. It is not necessary to complete a new Serial Loan Form each time additional loans are received during the same academic year.
Students are required to complete Exit Counseling when dropping below half-time or when enrollment ceases.
College Access Loan (CAL) Online
Click here or the link below to learn more about a CAL. A loan in the student’s name from the State of Texas. Requires a credit-worthy cosigner.
Direct Parent Loans
Direct Parent (PLUS) Loans are low-interest loans available to parents of dependent students. Interest is charged during all periods. Parents must pass a credit check. A credit approval will be processed by the Dept. of Education. The student must be enrolled at least half time. The parent may borrow up to the Cost of Attendance less all other financial aid. The interest rate is determined each year by the Dept. of Education. Contact the Financial Aid Office for the most current interest rate. Repayment begins within 60 days after the second disbursement of the PLUS.
An amount of approximately 4% of your loan amount for origination fees will be deducted. The chart below indicates the approximate amount of actual proceeds you will receive from the PLUS loan.
AMT BORROWED LESS 4% FEES = APPROX. NET FOR BOTH SEMESTERS APPROX. NET FOR ONE SEMESTER
$10,000. less $400. = $9,600. $4,800.
$7,500. less $300. = $7,200. $3,600.
Parents may apply for a Parent PLUS DIRECT Loan by logging in at StudentLoans.gov with the Parent Borrower FSA ID and password. Under “Parent Borrowers”, choose “Apply for A PLUS Loan”. After entering parent’s personal information, choose the appropriate academic year in the drop down box. Complete the PLUS Pre-Approval section. If the loan is approved, complete the Master Promissory Note by going to StudentLoans.gov and under “Parent Borrowers”, choose “Complete Loan Agreement for PLUS Loan (MPN)”. Complete and return the Parent Loan Request and Authorization Statement to the Office of Financial Aid. (NOTE: Parents who have already completed an MPN in a previous year do not need to complete another one.)
Federal Direct Parent (Plus) Loan Confirmation Process
The Master Promissory Note (MPN) is a very important contract between the borrower and the lender. The MPN allows borrowers to receive multiple Federal Direct Parent (PLUS) Loans over a ten (10) year period. After an MPN is submitted to the Department of Education, the parent is not required to complete a new MPN while the dependent student attends Howard Payne University.
A parent will be defined as a “Previous Borrower” if all of the following conditions are met:
- Previously borrowed from the Federal Direct Parent Loan for the student enrolled at HPU, and
- Has a valid promissory note on file with the Dept. of Education as the lender.
To confirm that the parent wants to continue to receive parent loans under the original MPN, the parent must complete the Parent (PLUS) Loan Request and Authorization Statement. A credit approval process must be completed each academic year.
It is also required that a new Parent (PLUS) Request and Authorization Statement be completed for any additional loans requested during the same academic year. If the parent needs a Parent Loan to finance another dependent student’s education, the parent must complete a separate MPN. The parent has the right to request a new MPN any time the parent borrows.
Keep track of how much you are borrowing
Keep good records. Repaying your student loans is a serious matter and it’s important to keep accurate records of how much you are borrowing. Use the U.S. Department of Education’s National Student Loan Data System (NSLDS) at https://nslds.ed.gov , the central database for federal student aid, to keep track of all of your federal student loans.
Student Loan Ombudsman
If you have been unable to solve a problem with your federal student loan, you can ask the Federal Student Aid Ombudsman Group for help. The Federal Student Aid Ombudsman Group of the U.S. Department of Education is dedicated to helping resolve disputes related to Direct Loans, Federal Family Education Loan (FFEL) Program loans, Guaranteed Student Loans, and Perkins Loans. The Ombudsman Group is a neutral, informal, and confidential resource to help resolve disputes about your federal student loans.
Please use the following information to contact the FSA Student Loan Ombudsman Group.
Via on-line assistance: https://studentaid.ed.gov/sa/repay-loans/disputes/prepare
Via telephone: 877-557-2575
Via Fax: 606-396-4821
Via Mail: FSA Ombudsman Group
P. O. Box 1843
Monticello, KY 42633
Contact the Ombudsman Group as a last resort. Make every effort to resolve your student loan problems before contacting the Ombudsman Group.