The University of Wisconsin Oshkosh is changing its federal student loan process to better serve its students, requiring them to borrow from the federal government, not banks, beginning in summer 2010. The University joins thousands of other U.S. higher education institutions in the Federal Direct Student Loan Program.
As a result of the change, UW Oshkosh students with federal Stafford, Grad PLUS and Parent PLUS loans will borrow funds from the federal government instead of from multiple private banks and credit unions.
“After researching and comparing two student loan programs, the Federal Family Educational Loan Program and the Federal Direct Student Loan program, the University determined that the Direct Loan program was a better option for students,” said Chancellor Richard H. Wells. “Many banks are no longer servicing student loans or are restricting who will receive loans. The Federal Direct Student Loan program ensures funds are available for students. Additionally, with direct lending, funding is secure, fees and interest rates are more favorable and processing is streamlined.”
The change is expected to have little visible impact on the 6,800 students and families who receive federal loans. Once UW Oshkosh students have completed a Free Application for Federal Student Aid (FAFSA), the only action they must take in order to begin receiving loans under the new program is to sign an electronic Master Promissory Note and participate in online entrance counseling.
“While this is a major change concerning the origination of our federal student loans, we don’t expect any significant problems,” said Petra Roter, vice chancellor for student affairs.
“I applaud UW Oshkosh for making the switch to the Direct Loan Program, which will ensure that students have continued access to federal student loans, regardless of the state of the credit markets,” said Rep. Tom Petri. “Not only is the Direct Loan Program a better deal for students, offering low-cost federal student loans with generous repayment plans, but direct loans save taxpayers billions of dollars each year compared to ‘guaranteed federal loans’ offered by private lenders in return for big subsidies.”
- For more information, visit www.uwosh.edu/fin_aid.