Federal Parent Loan for Undergraduate Students (PLUS)

NEW REQUIREMENT FOR All PARENT PLUS LOAN BORROWERS

Effective immediately, Saint Joseph's College will administer federal PLUS loans through the Federal Direct PLUS Loan Program (DL). With legislation recently enacted by Congress, the Federal Family Education Loan Programs are being eliminated and all funding of federal student loans will be done directly by the Federal Government in the Federal Direct Loan Program. This program is very similar to the current PLUS program; however, instead of borrowing through a lender, the parent borrows directly from the Federal Government. This means that you will be REQUIRED to complete a new Master Promissory Note (MPN) with the U.S. Department of Education as your lender even if you have previously borrowed from the PLUS Loan Program. Your MPN must be signed before your loan disbursements can be finalized.

Before applying, make sure you know your Federal Student Aid PIN that you used to file your student's Free Application for Federal Student Aid (FAFSA). Just like on the FAFSA, the PIN serves as your electronic signature on your MPN. If you do not know your PIN or do not have a PIN, you can request one at www.pin.ed.gov.

Steps for Parent Borrowers to take for 2011-2012 Federal Direct PLUS Loans

1. The parent borrowing the PLUS loan should complete the PLUS Master Promissory Note at www.studentloans.gov. Click into COMPLETE MPN.
2. The parent borrowing the PLUS loan should complete the application at www.studentloans.gov. Click into REQUEST PLUS LOAN.

Federal Direct PLUS Loan

Direct PLUS Loan terms, which are subject to revision by federal regulation, include:

• Interest Rates and Fees



Interest Rate:	7.9% (fixed)
Origination Fees:	2.5%* (net)

*The Federal Direct PLUS Loan has a 4% origination fee and also offers a 1.5% rebate on the origination fee – resulting in a net fee of 2.5%, which will be deducted from the gross amount of the loan borrowed. Once you enter repayment and make your first 12 monthly payments on-time, the rebate becomes permanent. If you fail to make your first 12 on-time monthly payments, a charge for the initial rebate will be added to the outstanding balance of the loan.


• The borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or may wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis. Generally, the Direct PLUS Loan has a 10-year repayment term.


• Parents may apply for up to the full cost of education for the school year minus all other student aid. Parents are encouraged to apply for the amount needed for a full academic year at the time of application, rather than by semester. The amount of the loan is disbursed equally between the semesters and applied directly to the student's tuition account.

Additional information of the Federal Direct PLUS Loan is available from the Department of Education.

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