Federal Direct PLUS Loan Program
What is a Federal Direct PLUS loan?
The Federal Direct Parent Loan for an Undergraduate Student (PLUS) is a loan available for parents to assist in financing his /her child's undergraduate college educational costs. The maximum annual amount you may borrow is the difference between Skidmore's cost of attendance and any other financial aid the student is receiving. A credit check must be passed in order for the loan to be approved.
When should I apply for the Federal Direct PLUS loan?
The financial aid office will begin certifying Federal Direct PLUS loans in June 2015. We recommended that you wait until after May 2015 or after you have received a fall bill (late June/early July) to apply for the Federal Direct PLUS loan.
How much can I borrow?
A parent may borrow up to the total cost of attendance for the academic period minus estimated financial aid received for the requested loan period (September 2015-May 2016). A 4.292% loan fee is deducted by the government for origination.
The loan amount can be increased by the amount of the fee. In determining the amount to borrow, include the entire academic year (fall and spring semesters).
Example: If you borrow $10,000 in a Federal Direct PLUS loan with 4.292% fee, Skidmore will receive $9571 towards your bill.
What is the interest rate for the 2015-2016 academic year?
The Federal Direct PLUS loan carries a fixed interest rate of 6.84%.
How will the Federal Direct PLUS loan be disbursed?
Federal Direct PLUS loan funds are electronically transferred to Skidmore in two disbursements. Generally, there is a disbursement at the beginning of the fall semester and one at the beginning of the spring semester. The loan proceeds are credited directly to your student's Skidmore account.
How do I apply for the loan?
Complete the below steps. Once the below information is received the loan will be certified.
1. To apply for the Federal Direct PLUS loan, follow the instructions to Complete the Federal Direct PLUS Request Process at www.studentloans.gov. You will need a federal PIN number to apply for the loan. If you do not already have a PIN number you may request one online at www.studentloans.gov. During the Federal Direct PLUS loan application process you will have an option to indicate the amount you would like to borrow or choose to borrow the maximum you are eligible to receive. The federal government will process a credit check on your behalf and you will immediately be able to review the results online.
2. Once approved, complete a Federal Direct PLUS Master Promissory Note (MPN) electronically at www.studentloans.gov. If you are denied due to credit, you will be given the option to use an endorser and/or you may be able to resolve credit reporting errors. If you are not subsequently approved, please feel free to contact the financial aid office as your son/daughter may qualify for additional unsubsidized Federal Direct student loan funds. For more details on the MPN, please see below question.
3. Federal guidelines require the FAFSA to be filed by the student if a parent wishes to apply for a Federal PLUS loan.
4. If a parent is applying ONLY for a Federal PLUS loan , the student MUST complete a FAFSA using the custodial parent's information. In addition, the parent who is the borrower must complete a Certification Statement. Please submit the completed form to the Financial Aid Office.
What if I am denied for a PLUS Loan?
If you are denied, you can appeal the decision or obtain a co-signer/endorser. You can contact the Department of Education, Borrower Services, at (800) 557-7394.
If you are denied and Skidmore receives notification from the Department of Education, per federal regulations your student may be eligible to borrow additional funding in a Federal Direct Unsubsidized Loan. Freshman/Sophomore level students may be eligible for up to $4,000 and Junior/Senior level students may be eligible for up to $5,000. However, if the PLUS Loan were to get approved at a later date in the academic year, your student would not be eligible for the additional funds.
There is a new loan counseling requirement for applicants who are determined to have an adverse credit history, but who qualify for a Direct PLUS Loan by documenting extenuating circumstances or obtaining an endorser. The applicant must complete the counseling on the Department of Education's www.studentloans.gov website.
What is the Master Promissory Note?
The Master Promissory Note (MPN) is a written promise to pay the U.S. Department of Education a fixed amount of money over a specified period of time. You will electronically sign the MPN during the PLUS application process at www.studentloans.gov.
The MPN must be completed once for your college student's undergraduate enrollment at Skidmore. If you have more than one child at Skidmore, you must complete and MPN for each child. Each academic year you will be required to complete the PLUS application process if you intend to borrow. The PLUS application and MPN must be on file with the U.S. Department of Education in order for the funds to be disbursed to Skidmore.