The US Government provides families access to federal student loans. ALL students borrowing from the Federal Direct Loan Program are required to sign a Master Promissory Note (MPN) and complete online Entrance Counseling for their Direct Loan. Federal loan funds will not be credited to the PSU bill until these items are completed.
The Federal Direct loan(s) awarded to you may be subsidized and/or unsubsidized, as described below:
A SUBSIDIZED Federal Direct loan is awarded on the basis of financial need. Interest (4.45% for loans disbursed after July 1, 2017) will begin accruing at the end of your grace period. Your grace period is 6 months after you graduate, withdraw from school, or are no longer enrolled at least half-time.
An UNSUBSIDIZED Federal Direct loan is a non-need based loan. You will be charged interest (4.45% for loans disbursed after July 1, 2017) from the time the loan is disbursed until it is paid in full. If you allow the interest to accrue (accumulate) while you’re in school, or during other periods of non-payment, it will be capitalized. This means the interest will be added to the principal amount of your loan at the time of repayment.
All Federal Direct Subsidized or Unsubsidized loans disbursed have a fee charged. For loans first disbursed on or after October 1, 2016, will be assessed a fee of 1.069%.
Please note the following eligibility requirements must be met in order to be awarded Federal Direct Loans:
(1) Students must be matriculated (enrolled in a degree-seeking program) and enrolled at least half-time (6 credits or more per semester).
(2) Students cannot be in default on any Federal Loans.
(3) Federal Direct annual and aggregate loan limits apply.
- Dependent undergraduate students are eligible for up to $31,000 (no more than $23,000 of which may be subsidized).
- Independent undergraduate students and dependent students whose parents are ineligible for a Federal PLUS Loan are eligible for up to $57,500 (no more than $23,000 of which may be subsidized).
- Graduate Students are eligible for a maximum aggregate loan limit of $138,500. The graduate debt limit ALSO includes federal student loans received for undergraduate study.
- The PLUS loan is solely in the name of a Parent(s), not the student, and is not transferable.
- Approval or denial for the PLUS loan is based on the parents’ credit history.
- There is an origination fee applied to the amount requested for a PLUS loan, this impacts the actual amount paid on the student’s bill. Fees and rates are fixed for an individual loan, however, they can change each academic year based on federal mandate. For the most current origination fee and interest rate on the PLUS loan please visit studentaid.gov.
- Only a parent can apply for a PLUS loan.
- A parent is defined as the student’s biological or adoptive mother or father, regardless of whether they are the “custodial” parent on the FAFSA.
- A step-parent is eligible to borrow a PLUS loan IF he or she is reported on the FAFSA along with the custodial parent.
- A legal guardian is not considered a parent for federal student aid purposes.
- More than one parent can apply for a PLUS loan for a dependent student as long as the total financial aid package does not exceed the Cost of Attendance.
- The maximum amount that a parent can borrow in the PLUS loan is the Cost of Attendance minus any financial aid received by the student.
- If your student intends to either reduce or decline the Federal Work Study award to increase the parent’s eligibility for the Federal Direct PLUS Loan, please submit a request at least a day prior to applying for the loan.
To Apply for the Federal Direct PLUS loan:
- In order to receive a PLUS loan, the student must have completed a FAFSA which can be done at fafsa.gov.
- If the parent(s) does not already have an FSA ID or have lost this information, please visit the Federal Student Aid ID website.
- The parent applying logs in to studentloans.gov with their FSA ID and Password.
- Select “Apply for a Direct PLUS Loan.”
- Select “Start” next to “Direct PLUS Loan Application for Parents.”
- Read and complete all the steps required for this application.
Please note: As part of the application, you will be required to choose the time period for which you are applying. Please use the following dates:
Full Year: September through May
Summer: May through August
Fall: September through December
Spring: February through May
Winter/Spring: January through May
What Happens After the Parent Applies:
- The parent will receive an immediate credit decision (approved or denied) as soon as the application is completed.
- The PSU Financial Aid Team will receive notification of the PLUS application decision within 2 to 4 business days.
- If APPROVED – the maximum allowed will be added to the student’s financial aid award.
- If DENIED:
- PSU will automatically increase the student’s Unsubsidized Federal Direct loan eligibility as allowed within the cost of attendance. Students who have earned up to 47 credits may be eligible for up to $4,000 additionally on an annual basis. Students who have earned 48 credits or more may be eligible for up to $5,000 additionally on an annual basis.
- If the PLUS is subsequently approved through the appeal process, or by adding an endorser, the additional unsubsidized loan given to the student will be adjusted accordingly.
- The parent will be given the option at the end of the PLUS application to add an Endorser to their loan to try for approval. The steps required for this will be listed if they select this option.
- The parent will be given the option at the end of the PLUS application to appeal the decision based on extenuating circumstances. The steps required for this process will be listed if they select this option.
Some things to consider when applying for an Alternative Loan:
- Alternative loans are loans through a private lending institution and do not necessarily have benefits similar to federal government programs, such as the option to tie your monthly repayment to your income. More information on the difference between private and federal aid can be found on the StudentAid.gov website.
- Some alternative loans require families to immediately begin repayment of interest which accrues on each loan while the student is attending college.
- The interest rates on alternative loans can be either variable or fixed, while federal loans have only fixed interest rates.
- Be sure you have applied for all available scholarships, grants, work study and federal loan programs offered (by completing the FAFSA) before borrowing from an alternative loan program.
- Alternative loans are in the student’s name and a ‘good’ cosigner is often required. What makes a good cosigner? Steady employment with enough income to meet debt obligations, able to meet credit obligations, credit is not overextended, no serious negative items on credit history.
- Once a complete application has been received, the lender will perform a credit check and will let you know if your application has been approved.
- Eligibility for alternative loans is based on the Cost of Attendance minus other financial aid received.
- If you intend to either reduce or decline your Federal Work Study in order to have a higher Alternative or Federal Direct PLUS loan, please do that at least one day prior to applying for the loan by contacting the Financial Aid Team. Alternative loan amounts and terms can no longer be changed once the school has certified the loan.
- Federal regulations now require additional steps to be taken during the loan application process. Students must now acknowledge three separate disclosure notices with their lender and complete a student self-certification form with information that can be obtained from their Financial Aid Award as listed on their myPlymouth account.
- Due to these new requirements, the time required to process your loan will be extended.
To assist you with applying for an Alternative Loan, we recommend that you:
- Start the application process early, but not too early. Since Alternative Loans must be disbursed within 90 – 120 days from the date the lender runs a credit check, it is recommended that loans for Fall only not be applied for prior to June and that loans for Spring only not be applied for prior to October.
- Confirm that you are applying for the correct time period. Typically, you will want to apply only once a year for the amount you will need for both terms.
- If you do want to apply for each term separately, Fall only loans should have a loan period of September through December; Spring only loans should have a loan period of January through May. Any loan with a loan period of September through May will be split equally between the fall and spring terms.
- Complete and return requests from your lender in a timely manner
- Check the status of your loan with your lender frequently
For non-degree College of Graduate Studies students (any term), Continuing Education undergraduate students, and matriculated undergraduate students attending Winterim or Summer terms, payment for classes is due at the time of registration. We strongly recommend that you apply early for your loan to ensure that it’s in place by the billing or registration due dates.
Please note: PSU does not enter into Consortium Agreements with other institutions for purposes of accessing federal financial aid programs
Although the lending institution of choice is completely up to you, we strongly recommend that you consider the following when making your decision:
- Continuing Education loans are private loans through a lending institution and not part of federally funded programs.
- Continuing Education loans are more expensive than federal student loans and should only be used when all other options have been exhausted.
- Be sure you have applied for all available assistance before pursuing a Continuing Education Loan.
- Continuing Education loans are in the student’s name, and a cosigner may be required. Once a complete application has been received, the lender will perform a credit check and will let you know if your application has been approved.
Please contact the following for more information on Continuing Education Loans:
Sallie Mae Smart Option Loan
http://www.salliemae.com or 877-279-7172
Wells Fargo Loan
http://www.wellfargo.com/student or 1-800-378-5526
http://edvestinu.com/private.asp or 1-603-227-5423
The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s central database for Federal student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of Education programs and provides a centralized, integrated view of all Title IV loans and grants. You may access all of your current and prior Federal grant and loan information on the NSLDS website. Parents may access NSLDS for information on the Federal Direct PLUS loans.
Please note: Information on a pending loan will not be available until approximately 2 weeks after the loan has disbursed to the school.
There are currently several different servicing agencies that your Federal loans may be serviced through. To verify who is currently servicing your loans, please visit nslds.ed.gov and choose “Financial Aid Review.” Press “Accept” twice. Log in using your social security number, first two characters of your last name, date of birth, and the same FSA ID that was used on your FAFSA. Click on the number in the first column under “Loans” for details regarding your loan.
If you have more than one loan you will have to click on each number associated with each loan. This will show the loan, the school you received the loan through, the disbursement amounts and dates, and it will also display the servicer agency information. Sometimes a loan can be transferred to a different servicer. Therefore, you will want to view the “Current Servicer” listed to find out who is currently servicing your loans. For any repayment inquiries regarding your loan, please contact the number listed under your current servicer.
The Federal Student Aid Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans. Please do not hesitate to contact them should you feel they can be of assistance.
FSA Ombudsman Group,
P.O. Box 1843,
Monticello, KY 42633