Federal Direct PLUS Loan for Graduate Students

The Federal Direct PLUS Loan is a federal loan program. You can borrow up to the school-determined cost of attendance minus other financial aid each year through the PLUS Loan program.

Payments on the principal of the PLUS Loan can be deferred while you are enrolled at least half time. Unlike the Stafford Loan, the PLUS Loan does not have a grace period after you stop attending school. It is likely, however, that you will qualify for a deferment or forbearance to temporarily relieve you of your payment responsibility at that time.

The Direct PLUS Loan has a fixed interest rate of 7.9%.

The PLUS Loan requires a credit check. A borrower with adverse credit will not be able to receive a PLUS Loan without a credit-worthy endorser. Adverse credit is defined as having one or more of the following:

• Currently 90 days or more delinquent on repayment of any debt
• Have had debt discharged in bankruptcy during the past 5 years
• Evidence of a default, foreclosure, tax lien, repossession, wage garnishment, or write-off of a Title IV (federal student aid) debt during the past 5 years

2.5% fees will be deducted from the gross amount of the loan borrowed, so you can expect to receive 2.5% less money than you ask to borrow. 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 deducted origination fee will count as part of the original principle balance of the loan.

 How to apply for a Federal Direct Grad PLUS Loan for 2008-09:

1. Complete the Federal Direct Grad PLUS Loan Master Promissory Note
   1. Visit https://dlenote.ed.gov
   2. Select “Complete new MPN for Student Loans”
   3. Select “Graduate PLUS” and press “continue”
   4. Select “Proceed to PIN Site Registration”
   5. Enter all requested information and press “submit”
   6. Click the checkbox and press “continue”
   7. Enter all requested information and press “continue”
   8. Select “Pennsylvania State University” as your school and press continue
   9. Follow on-screen instructions the rest of the way through the e-sign/MPN process
      
      
2. Students new to Penn State should complete and submit the Federal Direct Graduate PLUS Loan Request Form. Continuing Penn State students should complete the Grad PLUS Request Form on e-Lion (available in mid-June).

Both the MPN and the Loan Request Form must be completed in order for your Grad PLUS Loan to be processed.