Babson College will offer its students federal loans through “Direct Lending” starting with the 2009-10 academic year. Loans will be made directly through the federal government rather than through commercial lenders.

This shift involves over $15 million of loans per year in three federal programs: Federal Stafford Loan, Federal Parent Loan for Undergraduate Students (PLUS), and Federal Graduate PLUS Loan.

Students will benefit from the simpler process of loan origination and better guidance as they enter repayment after graduation.  Parents and graduate students will have the advantage of superior interest rates in the Federal Direct PLUS and Grad PLUS programs respectively.         

“In these uncertain financial times it is important to provide the assurance that federal education loans will be available to every qualified student, and that the loans will come with highly competitive rates, ease of processing, and excellent customer service,” says Melissa Shaak, Director of Student Financial Services at Babson. “Direct Lending gives us the best way to do that.”

All Babson students and parents who borrow a Federal Stafford, PLUS, or Grad PLUS loan in 2009-2010 will need to e-sign a Direct Lending Master Promissory Note which will cover future borrowing at Babson. Returning students and parents who had federal education loans in prior years will be advised about consolidation options.