Applying for a Direct PLUS Loan
Should your child apply for financial aid?
Applying for financial aid is an important step your child should take toward funding his or her education.
After your child receives his or her financial aid award, if you want (or need) to help with the costs of education, you may want to consider a Direct PLUS Loan.
To apply for a Direct PLUS Loan, you, the parent borrower, must complete the Borrower Section of the Master Promissory Note, and your dependent student must complete the Student Section. It's important to understand the terms of the Direct PLUS Loan and your responsibility for repaying the loan.
The PLUS Master Promissory Note (MPN)
- is a binding legal agreement you sign to indicate your commitment to repay your Direct PLUS Loan;
- may be used for multiple loans for up to 10 years if the school your student attends uses the multi-year feature;
- is for loans only for the dependent identified; and
- contains your rights and responsibilities.
You are required to sign a new MPN if the school does not use the multi-year feature or if you switch from the Federal Family Education Loan Program to the Direct Loan Program. If you have an endorser (someone who agrees to pay the loan if you don't) on your loan, you may be required to complete a new MPN.
If your child transfers to a school that uses the multi-year feature, you generally are not required to sign a new MPN. If you prefer to sign a new MPN each time you borrow, you may do so.
The multi-year feature of the MPN ends after the first to occur of the following dates:
- The date the Direct Loan Program receives your written notice that no further loans may be disbursed under the note;
- 12 months after the date you sign the MPN if there have been no disbursements during this 12 month period; or
- 10 years from the date you sign the MPN.
Your loan holder also may revoke the MPN in situations such as bankruptcy.
During the loan application process, the Direct Loan Program will perform a credit check to determine if you have an adverse credit history. If you do, you may be able to obtain an endorser who does not have an adverse credit history.
Fast loan facts
- Every school awards financial aid differently. The school may notify you of the PLUS Loan amount you are eligible to borrow, or you may need to request information from the school's financial aid office.
- You may decline a loan or request a lower amount by contacting the Direct Loan Program or the school.
- You should apply only for what you will need to pay your student's educational expenses each year.
- You must sign a separate Direct PLUS Loan MPN for each student.
- The school may require that you confirm the loan package or each loan disbursement.