University of Houston-Clear Lake announced that beginning fall 2008 students will benefit from the Federal Direct Student Loan Program, making it easier and more flexible for them to obtain financial backing for their education. The new program will not only provide a more stable loan environment, but will also offer a simple process.

“We have experienced changes in the Federal Family Education Loan Program, which our students have been using for the loan process until now,” says UH-Clear Lake Office of Financial Aid Executive Director Lynda McKendree. “We are making this change because some of our lenders have left the business and most others, including our five largest lenders, have raised origination fees that would now be paid by students, whereas the lenders absorbed those fees previously.”

UH-Clear Lake’s Office of Student Financial Aid processes more than $30,000,000 annually from the current program to help students offset their tuition costs. McKendree says that in addition to the shorter application process through the new program, students applying will experience lower loan fees. She also stresses that Direct Loan will be the lender for the lifetime of the loan because they do not sell to a secondary market.

Students should not experience any difficulties in the way they apply for the loans, which can still be completed online through the university’s E-Services. McKendree emphasizes that the process is very similar to the old way, noting only that it directs students to a different Web site than the one visited in the past.

In addition, students can select from four repayment plans including standard, extended, graduated and income contingent. The Direct Loan Program is one of the Federal Student Aid programs offered by the U.S. Department of Education. For those students who already have loans through the Federal Family Education Loan Program, McKendree says they can combine the loans through a federal consolidation loan.

“The change to the Direct Loan Program is a very big change for UH-Clear Lake and we feel confident that is the best decision for our students,” says McKendree. “We want to continue making their educational dreams a reality.”