Office of Student Aid : Loans : Summer 2008 Federal Direct Graduate PLUS Loan

A Federal Direct Graduate PLUS Loan is a loan for graduate degree seeking or professional students. To apply for a Federal Direct Graduate PLUS Loan, follow the appropriate steps listed below.

First-Time Federal Direct Graduate PLUS Loan Application Process

To obtain the Federal Direct Graduate PLUS Loan, you will need to complete the items below:

• 2007-08 Free Application for Federal Student Aid (FAFSA)
  
  • You will need to request consideration for the maximum Federal Direct Stafford Loan on Question #26.
    
    
• Federal Direct Graduate PLUS Loan Request Form  
  • The Federal Direct Graduate PLUS Loan Request Form will need to be completed for each new loan term during which a loan is requested. For fall 2008 and beyond, graduate students will be directed to use eLion to process this request form electronically.

• Federal Direct Graduate PLUS Loan Master Promissory Note (MPN).
  • Once you sign a Federal Direct Graduate PLUS MPN, you will not need to sign another one. This form authorizes the disbursement of future PLUS funds for up to ten years. You have the option to sign the MPN either before or after the result of the credit check is obtained.
  • To complete the MPN online, you will be required to sign this document electronically using your Department of Education (FAFSA) PIN. To request a PIN, please go to the Federal Student Aid PIN Web site.
  • If you prefer to sign a paper MPN, you can request one from the Office of Student Aid. Please note that an electronic MPN usually processes in about two weeks, while a paper MPN will take three to four weeks to process.

Please note:

• This loan is subject to credit analysis. If the analysis reveals adverse credit, you can still borrow this loan with a credit worthy co-signer. Graduate students who are denied will automatically be mailed Graduate PLUS Endorser information.
• Graduate students may borrow up to the full amount of their cost of education, which refers to the Cost of Attendance, minus any other financial aid.
• The Federal Direct Graduate PLUS Loan will be available to claim as an aid resource ont he tuition bill when 1) the credit check is complete and 2) the MPN is signed.
• Students are encouraged to review their tuition bill prior to applying for a Federal Direct Graduate PLUS Loan to determine the amount of loan to borrow.
• The net origination fee of 2.5% is deducted proportionately from each loan disbursement. By law, the total origination fee is 4%; however, Direct Loans currently offer a 1.5% rebate on this origination fee. If you fail to make 12 on-time monthly payments, a charge for the difference between the 2.5% origination fee and the 4.0% origination fee will be added to the outstanding balance of the loan.
• The Federal Direct Graduate PLUS Loan interest rate is fixed at 7.9%.
• PLUS Loan funds for summer are generally disbursed at the point a student begins all summer classes.
• If a credit balance remains after all charges are paid, the credit (as a check or as a direct deposit to a bank account) will be refunded. To learn more about Penn State's refund policy, go to the Office of the Bursar Web site.
• Repayment of a Direct Graduate PLUS Loan is deferred as long as the student is enrolled half-time (5 credits). Once repayment begins, you will have up to ten years to repay the loan.
• To determine your monthly payment amount, refer to the Federal Repayment Calculator.

• To increase a Graduate PLUS Loan, students will need to complete an additional Federal Direct Graduate PLUS Loan Request Form.
• To decrease a Graduate PLUS Loan, please contact the Office of Student Aid by e-mailing us at or by calling (814) 865-6301.