UMKC Will Change to the Federal Direct Lending Program for 2009-10
UMKC will be processing Federal Stafford Loans through the Direct Lending program beginning with the
2009-10 academic year. The University will no longer use the Federal Family Education Loan Program
(FFELP) to process Stafford, Parent PLUS and Graduate PLUS Loans. Under the Direct Loan program, the
funds for your federal loans will come directly from the federal government. In the FFELP program,
funds come from a bank, credit union, or other lender that participates in the program. Eligibility rules
and loan amounts are identical under both the FFELP and the DL programs.
Why UMKC is Changing to the Direct Loan Program
Security- Due to changes in laws which govern federal student loans, as well as the tightening credit
markets and the effect on private lenders, Direct Loans offer the most secure and efficient manner
of obtaining federal loans for our students. Last year, many private lenders stopped making loans to
students; others altered their processes mid-year. The DL program will minimize the impact of the
current student loan crunch for students and families.
Simplification- Students should find that Direct Loans offers a more streamlined process for
obtaining loans. Direct Loans does not sell loans to other companies, therefore students can avoid
the confusion of signing paperwork with different lenders, locating loan holder information or losing
a lender altogether.
How this Change Might Affect You
Direct Loan eligibility, basic loan terms and loan amounts will remain the same as the FFEL program.
There are a few changes you can anticipate:
If you have current FFELP/Stafford Loans, you will not be able to continue using a private lender
to fund your federal loans. UMKC will only be processing loans through the Direct Loan program
beginning 2009-10. If you have never borrowed a federal Stafford Loan, you will not be
2) All students, in 2009-10, will be required to complete loan Entra