Federal Direct Plus Loans
What are Direct PLUS Loans?
Direct Parent Loans for Undergraduate Students (PLUS) are federally guaranteed loans available to help pay for your child's educational expenses. In order to be eligible for a Direct PLUS Loan, you must have an acceptable credit history and your son or daughter must be enrolled at least half time (at least 6 credits) and making satisfactory academic progress toward their degree. Both the borrower and the student must be U.S. citizens or eligible non-citizens.
How much can I borrow?
The annual limit on a Direct PLUS Loan is equal to the cost of attendance less any other financial aid that the student is receiving. For example, if the cost of attendance is $15,000 and the student is receiving $7,000 in other financial aid, then you could borrow up to -- but no more than -- $8,000. A 4.276% origination fee is deducted from each Direct PLUS loan.
What is the interest rate?
The interest rate on a Direct PLUS Loan is fixed at 6.31%. Interest is charged on a Direct PLUS Loan from the date of the first disbursement until the loan is paid in full.
- Because credit checks are only valid for 180 days, PLUS loan requests will be available at www.studentloans.gov according to the following schedule:
- Academic year (August - April) - Approximately mid-March
- Summer (May – August) – Approximately mid-January
When does repayment begin?
Two repayment options exist:
- Begin repayment of the principal and interest 60 days after the loan fully disburses.
- Defer principal and interest payments until six months after the student graduates or is no longer enrolled at least half-time (6 or more credits). Deferments must be requested on an annual basis, and interest accrues during deferment periods. To request deferment, call 800-848-0979.
How do I choose a lender?
You will not select a lender. Pitt-Johnstown participates in the Direct Loan program, so you will borrow from the U.S. Department of Education.
How do I apply for a Direct PLUS Loan?
- All Parent PLUS applications must be initiated with the Department of Education at www.studentloans.gov.
- Parent borrowers must sign in using their own Federal Student Aid ID (FSA ID) to complete the Direct Loan PLUS Request. If you do not have an FSA ID, visit fsaid.ed.gov.
- Because credit checks are only valid for 90 days, PLUS loan requests will be available at www.studentloans.gov according to the following schedule:
Academic year (August - April) - Approximately mid-May
Summer (May – August) – Approximately mid-March
- First-time borrowers, whose credit is approved, must also complete a Master Promissory Note (MPN). You may complete the MPN electronically at www.studentloans.gov and use your federal FSA ID to sign the MPN (recommended), or you have the option to have a paper MPN mailed to you for completion.
- Complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov (if you have not already done so). Pitt-Johnstown will not process this request until a completed FAFSA is on file.
What happens if I am denied the Direct PLUS Loan?
If your application is denied due to adverse credit, two alternate options exist:
- Seek a credit-worthy endorser for the loan. If an endorser is used, the MPN becomes a "single loan" note and is not valid for 10 years. By signing, the endorser promises to repay the loan if you fail to repay the loan.
- The student may apply for additional unsubsidized Direct Stafford Loan funds, up to $4000 for students who have completed 53 or fewer credits and up to $5,000 for students who have completed 53.5 or more credits. You must reapply for the Direct PLUS Loan each year and be denied in order for your child to receive the additional unsubsidized Direct Stafford Loan.
A new provision requires special loan counseling for any PLUS Loan applicant who has an adverse credit history but who qualifies for a PLUS Loan through the process of reconsideration due to extenuating circumstances or by obtaining an endorser for the loan.