Stony Brook University to Participate Exclusively in the Federal Direct Loan Program for Academic Year 2009-2010
Move Ensures Stable Source of Student Loan Funding
STONY BROOK, NY, March 13, 2009 – Beginning with the 2009 Summer Session, Stony Brook University on Long Island will participate exclusively in the
William D. Ford Federal Direct Loan Program
for the administration of federal student loans. With direct lending, all students will be borrowing directly from the Federal Government. In the past, Stony Brook participated in the Federal Family Educational Loan Program (FFELP), which relies on private banks, credit unions, and other financial institutions as funding sources.
The decision to switch programs was made to ensure Stony Brook students have continued access to federal loans.
“Due to current economic conditions, it is important to secure a stable source of student loan funding,” said Dr. Peter Baigent, Associate Provost for Enrollment and Retention Management and Vice President for Student Affairs. “Direct lending is the best option for our students and parents.”
Direct lending is not affected by changes in the economy so students benefit from having a guaranteed source of funding regardless of changes in the credit markets. Direct Lending also offers students an integrated loan process with one single source of contact and several repayment plans and options.
Both the federal direct loan and the privately funded FFELP programs are overseen by the U.S. Department of Education and offer the same type of loans: Stafford, GradPLUS, and PLUS. Eligibility rules and loan amounts are identical under both programs, but loan fees and repayment plans differ. Instability in the credit markets and reductions in government subsidies caused many lenders to either exit the program or to stop offering borrower benefits and other services that made the program attractive to students.