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FAQ's About the Federal Direct Lending Program

1. Why is Chattanooga State changing to the Federal Direct Lending Program?
   Many banks have dropped out of the Student Loan Program with the recent volatility in the national credit markets and the reductions in federal subsidies available to lenders participating in the FFELP. Direct Lending offers students a streamlined process for requesting and servicing their student loans.
2. Do I have to complete another Master Promissory Note (MPN) and Entrance Counseling with the Federal government even if I have signed one before with a bank or other lender?
   Yes, you must sign a new Direct MPN and a Direct Entrance Counseling because the Federal Government will now be your new lender. This should be the last MPN and Entrance Counseling you have to sign as long as you attend Chattanooga State.
3.  If I have already completed a Direct Loan MPN and Entrance Counseling with the Federal Government for another school, do I have to complete one for Chattanooga State?
   No, if you are transferring from another school in which you accepted a Federal Direct Loan and as long as you have been enrolled in at least half-time without a break for more than one semester you should not have to complete another Entrance Counseling or MPN.
4. When I change from bank student loans to the Federal Direct Loan Program, will my earlier loans go into repayment?
   No, as long as you remain enrolled at least half-time.
5. Can I consolidate my Direct Loans and my bank loans?
   Previous loans will not go into repayment as long as you remain enrolled at least half-time without a six month break. When you do start repayment you have a choice to either make payments to your previous lenders and the Federal Direct Loan Program or to consolidate your loans with the lender or the Federal Government. Currently, most lenders have stopped consolidating loans; therefore, most consolidations are with the government.
6. How do I contact the Direct Loan Program?
   Telephone: 1-800-848-0979
   Website: https://www.dl.ed.gov/borrower/BorrowerWelcomePage.jsp