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 Direct Federal LoansFederal Direct Loan ProgramsWestern University of Health Sciences is committed to finding the most cost-effective way for all of our students to finance their education. With that goal in mind, we have decided to move to the Federal Direct Loan Program to best serve our student borrowers. Under the Direct Loan program, the funds for your loan come directly from the federal government unlike Federal Family Education Loans come from a bank, credit union, or other lender that participates in the program.Borrower Benefits in the Direct Loan ProgramAn up-front origination fee reduction is offered to Direct Subsidized Loan, Direct Unsubsidized loan and Direct Plus loan borrowers as a repayment incentive. The reduction is applied “up-front,” increasing the net loan amount that the borrower receives. Currently the rebate amount is 1.5 percent of the loan amount borrowed. Please see chart below for example under Direct Loan fees. To keep the up-front origination fee reduction, the borrower must make their first twelve required monthly payments on time (within six days of the due date). The Direct Loan Program does not count any deferment and forbearance periods used during this period of review. For example, if a borrower makes their first 3 payments on time and then needs a 12-month deferment due to unemployment, the Direct Loan system will ignore the deferment period and will wait for the borrower to make their next 9 payments before evaluating if the borrower has achieved 12 on-time payments. If the borrower does not make their first twelve required payments on time, the Department will add the rebate amount back to the principal balance. Additionally, borrowers who have entered repayment may choose to have their loan payments electronically debited from their bank account each month through the Electronic Debit Account (EDA) option. As an incentive for using EDA, the Direct Loan Program offers a .25% reduction in the interest rate while a borrower uses the EDA option to make their loan payments. The interest rate reduction does apply during periods of deferment or forbearance.Direct
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If the award's earliest |
Origination |
Up-front origination |
Total origination |
|
On or After July 1, 2008 and before July 1, 2009 |
2.0% |
1.5% |
.5% |
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On or after July 1, 2009 and before July 1, 2010 |
1.5% |
1.0% |
.5% |
Direct Graduate PLUS Loan Fees
|
Origination |
Up-front origination |
Total origination |
|
4.0% |
1.5% |
2.5% |
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