Direct Loans are low-interest loans for students and parents that help pay for the cost of a student’s education after high school. The lender is the U.S. Department of Education rather than a bank or other financial institution.
Direct Loans are simple because you borrow directly from the federal government and you have a single contact – the Direct Loan Servicing Center – for everything related to the repayment of your loans, even if you receive Direct Loans at different schools.
Direct Loans are convenient because you’ll have access to your Direct Loan account information 24 hours a day, 7 days a week via Direct Loan Servicing Online at https://studentaid.ed.gov/sa/.
Direct Loans are flexible because you can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.
The Direct Loan Program offers the following types of loans:
- Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.
- Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
- PLUS: unsubsidized loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
Loan Entrance and Exit Counseling
Federal Direct Loan student borrowers are required to complete Loan Entrance and Exit Counseling. These online counseling sessions provide useful tips and tools to help you develop a budget for managing your educational expenses and help you understand your student loan responsibilities. In order to complete Loan Entrance and Exit Counseling, you need to visit the Federal Student Aid web site at www.StudentLoans.gov.
Loan Entrance Counseling
Loan Entrance Counseling must be completed before a student’s loan can be processed and applied to his or her student account. If you previously received a student loan at Iowa Western Community College, which means you have already completed Loan Entrance Counseling, you do not need to complete this step again.
Exit Counseling must be completed when a student leaves Iowa Western Community College. Prior to completing Exit Counseling, you can check your financial aid record on the National Student Loan Data System (NSLDS), which is the U.S. Department of Education’s central database for student aid, at nslds.ed.gov. You will need to have a Federal Student Aid ID (FSA ID) to access the site. If you used an FSA ID to apply for federal financial aid, you should use that FSA ID for NSLDS access. If you have forgotten your FSA ID and need it reissued or if you need to obtain an FSA ID, you need go to www.fsaid.ed.gov.
If you have any problems completing the online counseling or have any questions, contact us at 712.325.3277 or FinancialAid@iwcc.edu.
Master Promissory Note
All first-time Direct Loan borrowers are required to complete a Master Promissory Note (MPN). The MPN is a legal document in which you promise to repay your loan(s). It also explains the terms and conditions of your loan(s). In most cases, once you have submitted the MPN and it has been accepted, you won’t have to fill out a new MPN for any future student loans that you receive. In order to complete the MPN, you need to visit the Federal Student Aid web site at www.StudentLoans.gov.
MPNs need completed and signed electronically using your Federal Student Aid ID (FSA ID). If you do not already have an FSA ID or have forgotten or misplaced your FSA ID, you can request a new or duplicate FSA ID at www.fsaid.ed.gov. The FSA ID serves as an identifier allowing access to personal information on various U.S. Department of Education websites.
Keep in mind that Loan Entrance Counseling is required before a student can receive his or her first Federal Direct Stafford Loan.