Some of you may have some questions regarding the Student Aid and Fiscal Responsibility Act, which was included in the health care reconciliation bill that passed on March 21, 2010 and signed into law on March 30, 2010.
In effect, what this legislation does is eliminate the Federal Family Education Loan Program (FFELP). Beginning July 1, 2010, all new federal student loans will be issued via the Direct Lending Program through the US Government. Private lenders, such as the credit union and other financial institutions will no longer have a role in originating or funding Federal Stafford, PLUS or consolidation loans beyond June 30, 2010.
What this means to you as parents and students, is all your pending disbursements or loans guaranteed prior to June 30, will be originated and disbursed through the FFEL program. If however, the loan will be disbursed in the 2010-2011 school year, you MUST contact your school. They will put you in touch with the Direct Lending website so you can apply for your student loan. Our understanding is you will need to sign a new Master Promissory Note (MPN) and do entrance counseling.
Of course, your previous outstanding loans taken out with us under the the Federal Student Loan Network will continue to be serviced by Great Lakes beyond the July 1, 2010 Direct Lending effective date.
If you have further questions, please do not hesitate to contact you nearest SouthPoint office to speak with one of our Financial Service Representatives or you can ask for me directly.
Terry Newgord, Loan Service Representative
Federally Insured by NCUA
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