FEDERAL
DIRECT PARENT LOAN FOR UNDERGRADUATE STUDENTS (PLUS) PROCEDURES - 2009-2010 Barnard
College is participating in the Federal Direct PLUS Loan Program beginning in
the 2009-2010 academic year. The Program is administered by Barnard College which
works with the U.S. Department of Education to offer this loan. Detailed information
regarding the Program can be found on the U.S.
Department of Education's web site and on the Federal
Direct PLUS Loan Fact Sheet.
Parents can apply for a Federal
PLUS loan to cover their parental contribution. Many families find PLUS
an alternative to using lifetime savings and investments for educational expenses.
Parents can borrow to cover educational costs for dependent undergraduate students
who are enrolled at least half-time.
| Loan Limits, Interest
Rate, and Fees | | Loan
Limits | You may borrow the full cost of education
minus any other aid the student receives. | | Interest
Rate | 7.9% fixed rate. |
| Loan Origination Fee | 4%
fee on the loan principal is deducted from each disbursement. Fees are deducted
before you receive any loan money, so the loan amount you actually receive will
be less than the amount you have to repay. | |
Rebate | 1.5% (incentive rebate) is
returned for assumed on-time repayment (contingent upon the borrower making the
first 12 monthly payments on time). | Sample
Parent Loan | Requested Loan Amount = $10,000:
$10,000 X 4% = $400 (loan origination fee)
$10,000 X 1.5% = $150 (incentive
rebate)
$400 - $150 = $250 (net adjustment) $10,000 - $250 = $9,750 (amount
of loan applied to student account) |
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| Steps
to Apply: | |
1. |
Parent submits a 2009-2010
Federal Direct PLUS Loan Request form. A valid Free
Application for Federal Student Aid (FAFSA) must be on file for the student
prior to certification of a PLUS loan. | | 2. | The
Financial Aid Office will submit the information provided on the PLUS Loan Request
form to the U.S. Department of Education for approval. |
| 3. |
Parent completes the Master Promissory Note electronically at
http://www.dlenote.ed.gov (select "Complete
New MPN for Parent PLUS Loans.") The borrower information must match the
information that was submitted on the PLUS Loan Request form. The borrower signs
the promissory note online, using the federal Parent PIN (same PIN the parent
uses for the FAFSA). (Register for a Department of Education Parent PIN at http://www.pin.ed.gov/
if you do not already have one. The Parent PIN is not the same as the Student
PIN.) The PLUS MPN is valid and may be used to process subsequent Federal Direct
PLUS Loans for up to 10 years after the original PLUS MPN is signed. |
| 4. |
Barnard College must receive
an approval notice from the U.S. Department of Education before credit for a pending
PLUS Loan can be applied to the student's account. Loans for the full academic
year will be disbursed directly to Barnard in two equal installments, half for
each semester. |
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| Repayment
of Loan | | 1. | .25%
reduction in the interest rate is given when payments are made through an electronic
debit account (EDA). | |
2. | Interest accrues
after the first disbursement. | |
3. |
First payment is due 60 days after the second disbursement,
unless eligible for deferment. | | 4. | Repayment
period is normally 10 years (standard plan), however extended and graduated plans
are also available. Click
here to review Repayment Plans. | |
5. |
Click here to review deferment
and forbearance information. |
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| Options
if Denied: | |
1. |
Work with the Department of Education to request a review of
the credit check. There may be inaccurate information on the applicant's credit
report. The parent may appeal the denial with the Direct Loan Origination Center
at 800-557-7394. | |
2. |
Obtain an endorser signature. The endorser must also pass a credit check. This
form will be sent from the Department of Education's Servicing Center. | | 3. |
If a parent is denied, the student is then eligible for an additional Federal
Direct Unsubsidized Loan, up to $4,000 for first-year and sophomores and $5,000
for juniors and seniors. The student completes the Federal
Direct Stafford Loan Request Form, which is located on Barnard's financial
aid website. A completed FAFSA must also be on file at Barnard in order to receive
the Federal Direct Unsubsidized Loan. Students need to request these funds in
writing after receiving notification of the PLUS denial. PLUS loan denials do
not carry over to the following year; the PLUS loan must be applied for each year.
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Additional
Information and Resources: Web Sites for Borrowers:
Direct Loans
- Students: http://www.direct.ed.gov/student.html
Direct
Loans - Parent: http://www.direct.ed.gov/parent.html
Direct
Loan Servicing Center - Borrower Services: http://www.dl.ed.gov
Direct
Loan Master Promissory Note: http://www.dlenote.ed.gov
FAFSA:
http://www.pin.ed.gov (to register for a Department
of Education Parent PIN)
Federal Student Aid Information: http://www.studentaid.ed.gov
Direct
Loan Consolidation Center: http://www.loanconsolidation.ed.gov Call
Centers for Borrowers:
Direct Loan Servicing Center - Borrower Services: 800-848-0979
Direct Loan Origination Center: 800-557-7394 (to appeal denial of PLUS loan)
Direct
Loan Consolidation Center: 800-557-7392 (Back to top)
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