Direct PLUS Loans (Parent & Graduate)

Direct PLUS Loans (Parent & Graduate)

The Direct PLUS loan, provides parents (Direct PLUS) and students (Direct Graduate PLUS) with competitive rates and repayment terms.  The parents’ creditworthiness is considered in determining their eligibility.The Direct PLUS loan may be used by the parent of a dependent student or a graduate student who has borrowed the maximum amount of Direct Loan assistance. The loan is available to students regardless of the level of financial need. Direct Loans are funded by the U.S. Department of Education through Villanova University and are managed by federal loan servicers, under the supervision of the Department of Education.  If you are a dependent student, your parents can borrow up to your cost of education less all other financial aid received. Graduate students are also eligible to borrow up to their total cost of education less all other financial aid received. Direct PLUS Loans are not based on need but rather on the borrower’s creditworthiness.An endorser is someone who agrees to repay the Direct PLUS Loan if the borrower does not repay the loan. The endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan. In some cases, you may also be able to obtain a Direct PLUS Loan if you document to the Department of Education’s satisfaction that there are extenuating circumstances related to your adverse credit history.

Villanova parents who wish to apply only for a Direct PLUS Loan for the 2016-2017 academic year are required to complete the FAFSA.Direct PLUS Loans are part of the federal Direct Loan Program. Unlike most other federal student loans, PLUS Loans are not awarded when you apply for aid. Graduate/professional students (Grad PLUS loan) and parents of undergraduates (PLUS Loan) apply separately for the PLUS (in addition to completing a FAFSA) if they need additional funds to cover college costs.After applying and being approved for a Direct PLUS Loan, the award will appear on your financial aid Award Notice. Borrowers must complete the Direct Loan Program requirements listed on this page in order to receive loan funds.

About The Plus Loan:-The Direct PLUS Loan is unsubsidized, so interest accrues while the student is enrolled at least half-time and during deferment periods. Eligibility is not based on financial need, and graduate students and parents of undergraduates may borrow up to the amount of the student’s Cost of Attendance, minus any other financial assistance a student receives.

The Direct PLUS Loan may be of particular interest to students and parents who:-

    are not eligible for other types of financial aid
    have unusual costs above the standard student expense budgets
    –have remaining financial need after other forms of financial aid have been awarded, or
    –wish to borrow all or part of their Expected Family Contribution

PLUS Loans offer advantages compared to private education loans, including the stability of federal funding, a fixed interest rate, and repayment and deferment options.

Eligibility, Loan Terms, And Requirements:-Students (or their parents) must submit a Free Application for Federal Student Aid (FAFSA) when applying for a PLUS or Grad PLUS Loan. Borrowers must have an acceptable credit history or a loan endorser with an acceptable credit history. Families with adverse credit may sometimes borrow under PLUS if they can document extenuating circumstances.

Key information about PLUS:-Because credit reports are only valid for a limited time and we process PLUS Loan applications in July, we wait until early April to accept PLUS applications so that only one credit check is required.
   We will assume that your application is for the Fall/Winter terms. If you want the loan for one term only, advise us as soon as possible. We begin sending PLUS applications to the federal processor in early July. Eligibility is determined when your application is processed in July.
    Contact our office if you require a paper PLUS Loan application (this version is longer credit check results will be delayed until the application is processed).

Direct PLUS Loan (Parent):-
   Apply for a Federal Direct PLUS through the U.S. Department of Education.
    Interest rate is 6.31% fixed during repayment for loans disbursed on or after July 1, 2016.
   Interest starts accruing at the loan’s first disbursement.
   Rates are annually reset by the federal government on July 1.
   Origination fee will increase to 4.276% for loans disbursed on or after Oct. 1, 2016, and before Oct. 1, 2017.
   Eligibility is COA minus any aid received by the student
   The school will determine the amount you are eligible for upon certification of the loan.
    –A Free Application for Federal Student Aid (FAFSA) must be completed for the student before you apply for a Federal Direct PLUS loans.
    Parents must complete an MPN.
   The MPN is completed online using your FSA ID. As the parent of the student, you will need to sign with your own parent FSA ID and cannot use your son or daughter’s FSA ID.

Graduate Direct PLUS Loan:-
    –Apply for a Federal Direct PLUS through the U.S. Department of Education.
    –Interest rate is 6.31% fixed during repayment for loans disbursed on or after July 1, 2016.
    –Interest starts accruing at the loan’s first disbursement.
   Rates are annually reset by the federal government on July 1.
   Origination fee will increase to 4.276% for loans disbursed on or after Oct. 1, 2016, and before Oct. 1, 2017.
   Eligibility is COA (cost of attendance) minus any aid received by the student.
   The school will determine the amount you are eligible for upon certification of the loan.
    A Free Application for Federal Student Aid (FAFSA) must be completed for the student before you apply for a Federal Direct PLUS loans.

Completing Your Loan Requirements:-Master Promissory Notes Parents and students borrowing for the first time through the Direct Loan Program must complete a Direct Loan Master Promissory Note (or MPN) to receive their loan funds. The MPN authorizes U-M to credit the Direct Loan funds to the U-M student’s account. Once you complete the MPN, you will not have to complete another Direct Loan MPN for 10 years. If you have accepted other federal loans, you will need separate promissory notes for those loans. The Office of Financial Aid will notify you of how to complete them.

Entrance and Exit Counseling:-

Entrance Counseling:-If you are a graduate student PLUS borrower, you must complete Direct Loan Entrance Counseling on the U.S. Department of Education’s .This interactive counseling session and quiz helps students develop budgets for managing educational expenses and also understand their loan responsibilities. You must complete the counseling before your loan funds can be disbursed to you.Parent PLUS borrowers are not required to complete entrance counseling.

Exit Counseling:-This is required for Direct Loan student borrowers who are graduating or dropping below half-time enrollment. This counseling session helps borrowers understand their rights and responsibilities in repayment and helps them choose a repayment plan. You must use your Department of Education FSA ID to access this counseling session.

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