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- DIRECT PLUS LOANS
New! All Federal Direct Loans first disbursed on or after July 1, 2012, will have an increased Origination Fee. The Budget Control Act of 2011 eliminated the upfront rebate for all federal direct loans. Until June 30, 2012, there was an upfront interest rebate which borrowers retained if they made their first 12 monthly payments on time. Starting July 1, 2012, PLUS loan disbursements will have a 4% origination fee.
Federal Direct PLUS Loan for Parents
The Federal Direct PLUS Loan is a loan for the parents of dependent undergraduate students. The loan is not based on financial need and can be awarded up to the cost of attendance minus other aid the student is receiving. Your parents determine the amount they wish to borrow. This loan is subject to credit approval policies set by the Federal Government/Department of Education. The interest rate on the loan is fixed at 7.9%. Interest begins to accrue from the date of the loan disbursement. The repayment period begins 60 days after the last disbursement of the loan.
For Direct PLUS Loans first disbursed after June 30, 2012, there is a 4% origination fee. The result is that the net loan amount will be 4% less than the gross/accepted loan amount. For example, if your parent borrows $1,000 in Direct PLUS Loans, the net disbursement would be $960. Your parent may want to factor in an allowance for this fee when determining the amount to request.
To receive this loan, your parent must complete the PLUS Loan Acceptance Form (included with the Award Notification Letter that is emailed to the student) and return it to the Student Finance Office. A PLUS Master Promissory Note (MPN) is also required. The parent applying for the loan must complete a Direct PLUS Master Promissory Note (MPN). You can complete the Direct PLUS Master Promissory Note (MPN) at complete the MPN online here.
Federal Direct PLUS Loan for Graduate Students (Grad PLUS)
Graduate and professional students can apply for a Federal Direct Graduate PLUS Loan. Students who have exhausted their Federal Stafford Loans or who seek additional funding may apply for this loan. This loan may be better than alternative/private loans which have variable interest rates. Eligible credit-worthy students can borrow up to the full cost of attendance, minus any other financial aid they are receiving. If you are denied based on adverse credit, you may obtain a credit-worthy endorser who is secondarily responsible for the loan. For a Grad PLUS Loan, the student is the borrower, as opposed to the undergraduate PLUS Loan where the borrower is the parent of the student. The interest rate on the loan is fixed at 7.9%. Interest begins to accrue from the date of the loan disbursement. Repayment begins 60 days after you cease to be enrolled at least half-time.
For Direct PLUS Loans first disbursed after June 30, 2012, there is a 4% origination fee. The result is that the net loan amount will be 4% less than the gross/accepted loan amount. For example, if you borrow $1,000 in Direct PLUS Loans, you will receive a net disbursement of $960. You may want to factor in an allowance for this fee when determining the amount to request.
If you are interested in applying for a Grad PLUS Loan, you must first contact the Student Finance Office to determine if you are eligible. If you are determined to be eligible, you will be offered a Grad PLUS Loan and emailed a revised Award Notification Letter. You must complete the Grad PLUS Loan Acceptance Form (included with the Award Notification Letter) and return it to the Student Finance Office. You also must complete the Direct Grad PLUS Master Promissory Note (MPN). You can complete the Direct Grad PLUS MPN at complete the MPN online here.
