For the 2007-08 academic year, the University of Missouri-Rolla will move the processing of its Stafford Loans to the Federal Family Loan Program through the Missouri Higher Education Loan Authority (MOHELA). The university approved the change this week.
UMR’s student financial assistance office currently processes Stafford Loans through the William D. Ford Federal Direct Student Loan Program. Under the new program, Stafford Loans will be processed through MOHELA’s Federal Family Education Loan Program (FFELP).
After a two-month evaluation period, the university concluded that its students and the university’s student loan services would be better served by using MOHELA’s programs.
“One of our top priorities is ensuring that a UMR education is affordable,” said UMR Chancellor John F. Carney III. “Our research indicates that an expanded partnership with MOHELA will provide several benefits to UMR’s students, while maintaining our high student service standards.”
In fiscal year 2005, 2,200 of UMR’s 4,313 undergraduate students received Stafford Loans.
“Student loans are now a critical portion of most students’ financial aid packages,” said Robert Whites, director of student financial assistance at UMR. “We believe that MOHELA’s innovative and customer service driven programs are a strong fit with UMR’s high student success philosophy.”
Currently, UMR uses MOHELA to provide students and parents with alternative and PLUS educational loans. Last year more than 600 UMR students received funding through MOHELA’s ED CASH alternative and PLUS loan programs.
The school plans to complete the entire transition to MOHELA guaranteed loans for all student loans in time for the fall 2007 semester.
UMR is joining the University of Missouri-St. Louis in using MOHELA as it primary lender for all Stafford loan programs.
“Moving to a single major loan program will allow the student financial assistance office to streamline the work flow by creating a more efficient, manageable and cost-effective delivery process,” says Whites. The conversion will also allow financial assistance staff to fully utilize the recently implemented financial aid software system.
The conversion is expected to incur no additional costs to UMR and will be accomplished through support from MOHELA staff and PeopleSoft consultants, as well as from student loan officers from other Missouri universities that have undertaken similar conversions.
UMR students will see several benefits from the conversion, including discontinuation of origination fees, interest rate reduction for borrowers who participate in an auto repayment program, and several loan forgiveness programs.
“Current Ford Direct Loan Program rates are set by Congress and are non-negotiable,” Whites notes. MOHELA offers more flexible interest rates and loan forgiveness programs, effectively lowering the cost of borrowing.