The volatile credit markets and recent revisions in federal law have significantly decreased the number of private lenders and servicers offering Federal Stafford and PLUS loans through the FFELP. Additionally, these private lenders and servicers cannot meet the expenses of offering discounts and incentives for borrowers that in the past made it desirable to borrow from the FFELP. Following NYIT main campus, Ellis College of NYIT started switching to the William D. Ford Federal Direct Loan Program as required by federal regulations. We processed a few William D. Ford Federal Direct Loan for Ellis students in 2009-10 to ensure a smooth transition to the Direct Loan program and benefit our remaining and active Ellis College teach-out students.

The William D. Ford Federal Direct Loan Program is the better choice for our students, with many economic advantages for borrowers in comparison to the FFELP and is guaranteed by the United States Government. Conversion to the Federal Direct Loan Program is REQUIRED for ALL STUDENTS who previously were in the FFELP. All students who wish to receive any federal student loans for the 2010 - 2011 academic year will need to apply through the Federal Direct Loan Program. Students may still borrow private loans from any lender they choose.

Major differences between FFELP and the Federal Direct Loan Program are:

Reasons for Conversion

1. Stability and availability of funding
2. One place for students to apply, track, and pay for their federal student loans
3. All students have the same requirements and benefits for their federal student loans
4. Loans are from the same government organization that deals with student loan consolidation (Department of Education)
5. Less fees incurred to borrowers on receipt of their loans
   • The net fee for Stafford loan is .5% in the Federal Direct Loan Program compared to 1.5% in the FFELP
   • The net fee for PLUS loan is 2.5% in the Federal Direct Loan Program compared to 4% in the FFELP
   • The interest rate for PLUS loan is 7.9% in the Federal Direct Loan Program compared to 8.5% in the FFELP
      

Steps in Applying for Federal Student Loans in the Federal Direct Loan Program

Please read the instructions and follow steps, if you are contacted by the Office of Financial Aid at Ellis College to apply for Federal Direct Loan and complete certain required forms to process your Federal Direct Loans to complete your financial aid package:

1. Complete the FAFSA
2. Complete appropriate a Master Promissory Note (First-time Direct Loan Borrowers Only)
3. Complete appropriate Federal Direct Loan Entrance Counseling (First-time Direct Loan Borrowers Only)
4. Check with the Office of Financial Aid to see if there are any other necessary documents which you are required to submit
5. PLUS loans also require a credit check form to be completed.  Please contact Financial Aid Office at 1-888-847-1220 or email at ellisfinaid@nyit.edu to get a copy of the credit check forms

For further information regarding the Federal Direct Loan Program visit the United States Department of Education online for information about the program themselves.