<p>Our son will be attending Davidson College, which has a “no loans” financial aid policy. However he will still need to take a Stafford loan to help us fill the gap. The Davidson website has links to banks for Stafford loans, but these all now say they can no longer offer them because under the new federal law only Direct Stafford loans are available. How does this work with a school that has not, at least up to now, offered Direct loans? I can’t seem to find the answer on the federal websites.</p>
<p>Direct Loans are exactly the same as a Stafford loan … they are just borrowed directly through the government via the school instead of through a bank. </p>
<p>Call the school to tell them that you would like to borrow a Stafford loan (you will have unsubsidized Stafford eligibility even at a “no loans” school). If they are not yet participating in Direct Lending (it is “strongly suggested” but not actually mandated that schools use Direct Lending), ask for the name of their preferred lender.</p>
<p>Because I work at a DL school, I didn’t realize that there aren’t any lenders doing Stafford loans anymore. A quick internet search later, it looks to me like that’s the case. While a school doesn’t “have” to switch yet, their students are going to be up a creek without a paddle if they don’t. I assume that Davidson has some contingency plan for its students if they are not yet ready to make the DL switch. </p>
<p>It is also possible that they ARE making the switch for fall, but just aren’t ready quite yet. DL loans are quick & easy, so planning now for fall isn’t necessary. Staffords are guaranteed (no credit check, etc).</p>