Important News for Students Regarding the Federal Family Education Loan program

The New School currently participates in the Federal Family Education Loan program (FFEL), which allows students to borrow funds for school from private lenders (usually banks or credit unions). The university is transitioning from the FFEL lending program and will begin participating in the William D. Ford Federal Direct Lending program (DL) for the 2010-2011 aid year.  This change does  not affect any 2009-2010 current year loans.

The FFEL Program has experienced several difficulties over the last two years. Some FFEL lenders have gone out of business, requiring student borrowers to select new lenders and complete new promissory notes. In addition, some lenders have changed their processing systems, resulting in funding delays. These FFEL participation changes have consistently occurred with very minimal notice, causing significant delays for students receiving their funds. In order to provide stability in services to students and to maintain the timely availability of student loan funding, the university will transition to Direct Lending for federal loans.

In Direct Lending, students borrow directly from the U.S. Department of Education through their school. DL Subsidized, Unsubsidized, Parent PLUS, and Graduate PLUS loans operate in essentially the same manner as the FFEL program. Students receive the same interest rates (except Grad PLUS, which has a lower interest rate than FFEL) and have similar repayment options. Payments are sent directly to the U.S. Department of Education’s servicer.

• Switching to Direct Loans will provide the following benefits:

• Eliminates the uncertainty of lenders exiting the FFEL program.

• Eliminates the need for reprocessing loans for students when lenders leave the program.

• Provides one lender and one payment for new borrowers.

• Allows returning borrowers to consolidate FFEL loans with their Direct Loans at repayment.

• Provides a lower interest rate on the Parent PLUS and Graduate PLUS loan.

• Offers four repayment options for students.

• Offers interest rate reductions for on-time payments.

• Allows students to participate in the Public Service Loan Forgiveness Program.

As a result of this change, all continuing students who borrow loans at The New School for 2010-2011 will need to complete a new Direct Loan Master Promissory Note (MPN). Instructions for completing a new MPN will be included in the financial aid letter sent to students when a loan has been processed for them.

We believe that using the Direct Loan Program is the best way to ensure that our students receive their loan funds in a timely and efficient manner.  For more information regarding the change to Direct Loans, please read our Direct Loan FAQs  .

We understand that the process of applying for admission and paying for your education can be confusing and stressful even in the best of economic times. Student Financial Services is here to help you navigate these issues. Whether you are worried about your school expenses, having difficulty managing your finances, or simply need some guidance, I encourage you to take advantage of our services. Below is information about our office and the financial services available to you.

The New School Office of Student Financial Services (SFS) provides a comprehensive program of financial assistance and financing options. We are committed to making all reasonable effort to removing need as a barrier to matriculation and to applying need analysis and awarding policies equitably across the university. Our primary role is to identify possible sources of assistance and financing options for students and their families so that admitted students can enroll and continuing students can successfully complete their course of study.

Student Financial Services is happy to answer any questions you may have, including those about financial aid eligibility and financing options. Please do not hesitate to contact us at 212.229.8930 or sfs@newschool.edu. Better yet, visit us in person Monday through Friday 10:00 a.m.– 4:45 p.m. in the Lower Level of The Welcome Center at 72 Fifth Avenue. My team and I look forward to working with you to develop a plan for your financial needs. Together, we can help you manage at least one stress and prioritize what is important: your studies.

—Eileen F. Doyle, Assistant Vice President for Student Financial Services

February 2010