Get a Student Loan

Federal PLUS Loan Program

• This loan is available to parents, or in certain circumstances, stepparents, of dependent students and for loans certified by the school on or after July 1, 2006 to graduate and professional students.
• The college determines eligibility for a PLUS loan.
• The borrower is responsible for the interest during the life of the loan (the Federal Government does not pay any interest).
• Payments will begin within 60 days after the the last disbursement of the loan.
• The borrower may defer making payments while attending school at least half-time.
• A default fee and an origination fee may be withheld from the disbursement amount. All fees that are charged will be disclosed on the Notice of Guarantee and Disclosure Statement.
• A credit evaluation is required.
• The maximum amount borrowed cannot exceed the student's cost of attendance minus other financial aid received.

Application Procedures

• The graduate and professional student completes the Free Application for Federal Student Aid (FAFSA) and must have been determined eligible for his or her maximum eligibility under the Federal Subsidized and Unsubsidized Stafford Loan Program.
• In the instance of a parent borrowing on behalf of a dependent student, the school may also require the parent to complete the FAFSA.
• The college determines loan eligibility.
• The borrower chooses a lender to make the loan.
• The borrower completes the Master Promissory Note (MPN) that is provided.
• EAC is available to provide assistance with MPN completion.
• EAC will process the guarantee on the loan and notify the parent of:
  • the full amount of the loan.
  • the interest rate.
  • the date repayment begins.
  • information about the maximum repayment periods and the minimum repayment amount.
  • an explanation of default and its consequences.
  • an explanation of available options for consolidating or refinancing the loan.
  • a statement that the loan can be prepaid at any time without penalty.
• The lender disburses the loan and sends the proceeds to the college.

Current PLUS Interest Rate

PLUS Loans with a first disbursement:

• On or after July 1, 2006: 8.5%, fixed
• On or after July 1, 1998 through June 30, 2006: 5.01%.

Completing the PLUS Master Promissory Note

The Promissory Note used in the Federal PLUS Loan Program is called a PLUS Master Promissory Note (MPN).

You must sign an MPN and meet lender and federal credit requirements before receiving your first PLUS loan. In many instances, one MPN will cover all of your additional Stafford loans. In some cases, however, you may need to sign an MPN every academic year.

The college determines if a single MPN is allowed for multiple loans, or if a new MPN is required yearly.

What is a Promissory Note?

• is a contract between the borrower and the lender.
• is the borrower's promise to repay the full amount of the loan.
• is a legal document that describes the terms of the loan.
• is a legal document that:
  • provides information on repayment options.
  • must be signed before funds can be disbursed.

Tips to Completing a PLUS Master Promissory Note (MPN)

• Read the directions carefully.
• Complete all sections of the PLUS loan MPN.
• Select a lender.
• Don't forget that the borrower must sign the MPN.
• Remember that this is a promise to repay any loan taken out under the MPN.
• The borrower should keep a copy for his or her records.
• Follow the college's directions about where to mail the form.

Electronic MPN Completion

Your school may allow you to complete your MPN online. If so, you can save time by signing your MPN electronically. To do this, you will need to know your Department of Education Personal Identification Number (PIN), available at www.pin.ed.gov.

To find out if the school offers the electronic MPN signature process, contact the financial aid office.

Deciding Whether to Borrow

If your school tells you that you are eligible to borrow a loan, you should seriously think about whether that's what you need to do. Always keep in mind that student loans must be repaid. That can take a long time and will reduce the amount of money you are able to spend on a house, car, vacations, and other things. Think very carefully before borrowing and accept only the student loan funds you really need.

Deciding on a Lender

Once you decide that you need to borrow a loan, you'll next decide which lender to use. This could be a tougher decision than you might think.

Your school may provide you a list of lenders. The list may be very lengthy, showing many lenders that participate in the student loan programs. Or it might be fairly short, called a "preferred lender list." If your school gives you a preferred lender list, there are a few things to keep in mind:

• Schools should base their list on the lenders they believe best serve their students.
• You are not required to select from the school's preferred list.
• You should do your own research to determine which lender's loan will best meet your needs.
• Ultimately, it's your choice, and the school will process the loan for whichever lender you choose.

• Search by lender name or code
• Search by state

• What fees will be subtracted from your loan before you get the money? Lenders are authorized to charge an origination fee and guarantors are allowed to charge a default fee, but these fees may be paid on your behalf in what is called a "front end benefit." Find out from the lenders you are considering how much you will be charged.
• What interest rate will you pay? Although the maximum rate is set by law, some lenders may in fact charge a lower amount. But be cautious.
  • Some of the interest rate reductions have special requirements. For example, they might require you to authorize automatic payment from your checking or savings account; or they might require you to make all payments on time or you lose the benefit; or they may require you to make a certain number of payments before you receive the benefit. So make sure you understand the requirements of receiving the lender's "back end benefits."
  • Find out how many of the lender's borrowers actually receive the "back end benefits." In some instances, very few borrowers actually meet the requirements to get the "back end benefit." A "back end benefit" is only of value if you actually get to take advantage of it.
  • Find out whether the lender sells their loans to a secondary market. If they do, make sure that the "back end benefits" continue after the sale.
• What kind of customer service will you receive? Is the application process easy? Will the money be there when you need it? Will you be able to get your questions answered promptly and conveniently? Will you be treated with dignity and respect if you get into repayment difficulties?
• Do you and your parents already have a trusted customer relationship with a lender? If so, you might want to at least put that lender on your list to research further.
• Keep in mind that a lender's benefits might vary from year to year. So, the benefits that you receive for the loan you get your freshman year may be different than the benefits promised for the loan you get your sophomore year. Generally, it's to your advantage to stay with the same lender for all of your borrowing, because it makes it much easier to keep track of your loans and to make your payments. However, each year you may want to check to make sure that the lender you initially chose continues to provide the benefits you want.

It's your choice. Do the research. Select the lender that best meets your needs.

Getting PLUS Loan Funds

Disbursement Information

After the PLUS loan is guaranteed by EAC, loan proceeds are sent to the college. Check out these commonly asked questions about PLUS disbursements.

How are PLUS loan funds disbursed?

• By check; or
  A check is sent to the college for delivery to the borrower.
  • The college may keep the amount owed.
  • Remaining funds are released to the borrower.
  • The borrower and the school are both required to endorse the check.
• By Electronic Funds Transfer (EFT)
  Funds are electronically sent to the college to be applied to the amount the student owes. The college will distribute excess funds.

When Does the Disbursement Occur?

The lender disburses the funds according to the schedule provided by the college.

Why is the disbursement less than the amount of the loan requested?

• PLUS loans are normally disbursed in two or more equal disbursements.
• Origination and guarantee fees may be deducted from each disbursement.

When a borrower signs the PLUS Master Promissory Note, that borrower agrees to use the loan only for educational purposes at the college that certifies the loan.

Eligible educational expenses include:

• Tuition and fees
• Room and board
• Books, supplies, and equipment
• Transportation and commuting expenses
• Other documented, authorized costs

Stafford  |  Consolidation |  Alternative  |  Wise Borrowing