Communicating with students and parents

To assist in transitioning from the Federal Family Education Loan (FFEL) Program to the William D. Ford Federal Direct Loan (Direct Loan) Program, you’ll want to let your students and their parents know about the change. This is particularly important at four-year schools, if the majority of your current students and their parents previously borrowed Stafford and PLUS loans through the FFEL Program.

The following suggestions are based on feedback from aid administrators at schools that recently began participating in the Direct Loan Program.

Completing the Direct Loan MPN

The aid administrators at schools switching to Direct Loans have discovered that the single most important thing to communicate to students and parents is the need to complete a Direct Loan Master Promissory Note (MPN). Students and parents can complete an MPN electronically via the StudentLoans.gov Web site at https://studentloans.gov.

Most of these schools launched intensive on-campus campaigns to ensure their students completed an MPN. This requirement was easily communicated to returning students through e-mail, posters, notices in the school newspaper, the Web page for the financial aid office, and other media.

Some schools also found that if they sent postcards to students’ campus and home addresses, the mailed notices were more likely to get attention than e-mail messages. Schools with on-campus housing may also want to encourage the resident advisors or other housing staff to post reminder messages on bulletin boards and make student loans a topic for dormitory meetings.

Options for Consolidating

For student and parent borrowers who previously received FFEL Program loans and will now be receiving Direct Loans, a Direct Consolidation Loan may make payments more manageable by combining multiple federal student loans into one loan with one monthly payment. Therefore, you may wish to include the following basic information about consolidation in your communications to student and parent borrowers:

• For borrowers with student loans from multiple lenders, a Direct Consolidation Loan simplifies loan repayment. All the borrower’s eligible federal student loans are consolidated into one loan that is repaid in a single monthly payment to one servicer. A Direct Consolidation Loan has a fixed interest rate based on the weighted average of the interest rates of the loans consolidated.
• To learn more about when a borrower may consolidate, the pros and cons of doing so, and the application process, student and parent borrowers should go to www.loanconsolidation.ed.gov or call the Direct Loan Consolidation Center at 800/557-7392 (TDD/TTY: 800/557-7395).

Sample Communications

To assist you in developing communications about your school’s transition to the Direct Loan Program, we have developed sample text for key communications. The sample text has been written as generally as possible to cover the widest range of school and borrower needs. In some cases, you may need to modify the sample text to reflect your school’s processes and procedures. We have identified such text through instructions within the sample text labeled "Usage Notes for Schools."

The samples are as follows:

• Sample Direct Loan Note for Award Letter—This text may be added to award letters that include a Direct Loan as part of the financial aid package. The text directs the student to additional information that you enclose, attach, or make available on your Web site.
• Sample Postcard or E-mail Reminders—This text may be used to remind students to complete a Direct Loan MPN (one sample) and/or Direct Loan Entrance Counseling (two samples), as required. The text directs the student to the StudentLoans.gov Web site for online completion; however, you may modify the text to reflect your school’s processes and procedures.
• Sample Poster—This text may be used to develop informational posters. The text provides general notice of the transition to the Direct Loan Program and the need for students to respond to requests from the Financial Aid Office.
• Sample Direct Loan Begin Notice—This text provides a detailed overview of the Direct Loan Program and what may be required of the student or parent borrower to obtain a Direct Loan. This can be used as the additional information to which you direct students and parents in the Direct Loan Note for Award Letter. The text that explains Direct Loan Entrance Counseling completion may need to be modified to reflect your school’s processes and procedures.