Federal Direct PLUS Loan

Federal Direct PLUS Loans are available to parents of undergraduate students and to graduate students, if they are credit-worthy applicants. A parent of an undergraduate student or a graduate student may borrow up to the total Estimated Cost of Attendance less financial aid resources received by the student.

Because the funding for Federal Direct PLUS loans comes straight from the US Department of Education, students and parents do not have to find a lender to borrow through this program. Please disregard any offers you may receive about the Federal PLUS Loan program offered through private lenders. Since Mercyhurst College is a Federal Direct Lending institution, you may not use a private lender to apply for a Federal PLUS Loan.

PLUS Interest and Fees

The interest rate is a fixed 7.9% and is charged on the loan from the time the loan funds are disbursed until it is paid in full.

In addition to interest, the Federal PLUS Loan has 4.0% origination fee. However, Federal Direct PLUS Loan borrowers will receive an upfront 1.5% rebate at the time of origination based on paying your first 12 monthly payments on time. Thus, the assessed fee to the borrower is only 2.5%. This fee reduces the amount that disburses to the student's account. For example, if $5000 is borrowed under the Federal Direct PLUS Loan program, $125 will be deducted from the student's loan amount and paid directly to the U.S. Department of Education.

How to Apply for a Federal Direct PLUS Loan

To apply for a Federal Direct Loan, the student must complete the FAFSA . In addition, parent borrowers must complete a Federal Direct PLUS Loan Application Form and graduate borrowers must complete a Federal Direct Graduate PLUS Application Form and submit it to the Office of Student Financial Services. In addition to the PLUS borrower being credit-worthy, to be eligible, the student must be enrolled at least half-time and meet other general federal student aid eligibility requirements.

E-sign the Federal Direct PLUS Loan Master Promissory Note (PLUS MPN)

Parents and graduate students borrowing a Federal Direct PLUS Loan must complete a Federal Direct PLUS Loan Electronic master Promissory Note ( PLUS MPN ) before loan money can be disbursed. Once a Federal Direct Loan MPN is completed and the loan is disbursed to you by Mercyhurst College, you do not have to sign Federal Loan MPN again (it is valid for 10 years).

To complete the PLUS MPN , you must go to www.dlenote.ed.gov . You will need your U.S. Department of Education PIN to sign your MPN electronically.

After you sign your PLUS MPN , electronic notification will be sent to Mercyhurst College. Mercyhurst College may not disburse the Federal Direct PLUS Loans unless the borrower has completed PLUS MPN and the loan is approved by the US Department of Education.

In addition, graduate PLUS borrowers must complete Entrance Counseling prior to receiving a Federal Direct Graduate PLUS Loan.

Graduate PLUS Entrance Counseling

The federal government requires graduate students to complete in loan counseling prior to receiving a Federal Direct Graduate PLUS Loan. Entrance Counseling will explain various aspects of student loans, such as repayment and interest, and your rights and responsibility. It concludes with a 15-question quiz. You must get all answers correct to successfully complete Entrance Counseling .

Entrance Counseling can be completed at www.dlssonline.com . You will need your U.S. Department of Education PIN to successfully complete Entrance Counseling . After you complete Entrance Counseling , the results will be sent electronically to Mercyhurst College, although you may wish to print a copy of the rights and responsibility page for personal records.

Receiving PLUS Loan Funds

When Mercyhurst College is notified by the Federal Direct Loan Processor that they have a valid PLUS MPN on file and the PLUS loan is approved, the Federal Direct PLUS Loan will automatically be credited to the student's account as long as all other federal student aid eligibility requirements are met. In addition, Mercyhurst College must be notified that the graduate PLUS borrower has completed Entrance Counseling before the loan is credited.

Parent PLUS Loan Refunds

If the Federal Direct PLUS (for parent) disbursement generates a credit balance on the student account after college charges are paid, the refunded amount will go to the parent unless the parent borrower authorizes that the refund be sent to the student.

Parent PLUS Loan Denial

If a Federal Direct parent PLUS Loan Application is denied, it may be possible for a student to borrow an additional amount of unsubsidized Federal Direct Loan. The dependent student annual and aggregate maximum allowable loan limit will be replaced by the independent student maximum allowable loan limits.

Request Reduction or Cancellation of PLUS Loans

The parent or graduate student borrower has the right to reduce or cancel the Federal Direct PLUS Loan offer. This may be done by completing a Loan Change Request Form and submitting it to the Office of Student Financial Services.

Exit Counseling for Graduate PLUS Borrowers

The federal government requires that graduate PLUS borrowers participate in Exit Counseling prior to leaving or graduating from college. To complete Exit Counseling , go to www.dl.ed.gov . You will need your U.S. Department of Education PIN to successfully complete Exit Counseling .

During Exit Counseling you will learn about additional deferment and forbearance and how to get the necessary forms. Even though you have a six month grace period, the Exit Counseling process will help you set up a repayment plan, a direct withdrawal and a payment date. The Direct Loan Servicing Center, who handles all Federal Direct Loan repayments, hosts Exit Counseling .

PLUS Loan Repayment

Repayment of the PLUS loan begins 60 days after the loan is disbursed. Graduate PLUS borrowers can defer repayment of the PLUS loan until 6 months after graduation or after the student ceases to be enrolled at least half time.

Additional Federal Direct PLUS Loan Information

Contact Federal Direct Loan Servicing Center at www.dl.ed.gov or call them at (800) 848-0979, TTY (800) 848-0983.