Graduate PLUS Loan (for graduate and professional students)

DESCRIPTION

Federal Direct Graduate PLUS Loans are low-interest loans made to graduate and professional students enrolled in school at least half time. These loans are not based on financial need. Students with adverse credit history or who have filed bankruptcy in the past may be denied the Graduate PLUS loan. The federal government does not pay the interest on the Federal Direct Graduate PLUS Loan.

HOW TO APPLY

In order to be considered for these loans, the student must file the Free Application for Federal Student Aid (FAFSA) and have the results sent to the VCU Office of Financial Aid, ensuring that information provided on the application is complete and accurate. Failure to resolve any problems with the processing of the application, or delays in resolving the problems, may preclude the student from being considered for these loans. The student must complete the VCU Financial Aid Federal Direct Graduate PLUS Loan Request form.

ELIGIBILITY CRITERIA

The Federal Direct Graduate PLUS Loan is limited to U.S. citizens and eligible non-citizens. The student must be enrolled in a degree or certificate-granting program. To receive a Federal Direct Graduate PLUS Loan, students will be required to pass a credit check. If they do not pass the credit check, they might still be able to receive a loan with a credit-worth co-signer, such as a relative or friend, who promises to repay the loan if the student fails to do so.

INTEREST RATES

Interest rate is fixed at 7.9 percent for any loan disbursed on or after July 1, 2006.

FEES

There is a 2.5 percent fee deducted from each disbursement of a Federal Direct Graduate PLUS Loan. This fee goes to the federal government to help reduce the cost of this loan.

RENEWAL

Awards cannot be automatically renewed. Students must apply annually and continue to meet the eligibility requirements listed above.

AWARD AMOUNTS/LOAN LIMITS

The yearly limit on a Federal Direct Graduate PLUS Loan is equal to your cost of education minus any other financial aid for which you are eligible. For example, if your cost of education is $20,000 and you are eligible for $18,500 in other financial aid, you could borrow up to $1,500.

PROMISSORY NOTES

In order to receive Federal Direct Graduate PLUS Loan funds, the student must complete an electronic Master Promissory Note (eMPN). The student must complete the PLUS eMPN online at dlenote.ed.gov, using their Personal Identification Number (PIN) issued by the U.S. Department of Education. Students who do not remember their PIN may request a duplicate PIN online (http://www.pin.ed.gov). The eMPN does not show loan amounts because it can serve as the student's promissory note for future years. The loan amount(s) will be included in the most recent electronic Financial Aid Notification (eFAN). Students will receive their Graduate PLUS Disclosure Statement from the federal Loan Origination Center for each new loan borrowed. The disclosure statements provide information about the amount of money borrowed, the loan period, and the anticipated disbursement dates. Students should maintain the statements for their records.

Please note: If an endorser is used on a Graduate PLUS loan, the student must complete a new Graduate PLUS eMPN each year that an endorser is needed on the loan. Students may decline or reduce the amount of their original loan request by filling out a Change Form or by notifying the VCU Office of Financial Aid in writing. To avoid incurring interest charges and loan fees, funds must be returned within 120 days of disbursement. The loan fee will be reduced or eliminated in proportion to the amount of the disbursement returned. Please note that students who do not return their signed promissory note by October 1 will have their Federal Direct Graduate PLUS Loan canceled for the academic year.

DISBURSEMENT

Federal regulations require two disbursements of all Federal Direct Graduate PLUS Loans borrowed within an academic year. The first disbursement should be made during the first week of classes, provided that the loan is approved, all necessary documents have been received, and that there are no changes in expected enrollment status. The second disbursement should be made during the first week of classes at the beginning of the second semester for fall/spring loans, provided that all necessary documents have been received and that there are no changes in expected enrollment status.

CHANGES IN ENROLLMENT STATUS

The Federal Direct Graduate PLUS Loan will be used to pay your university charges (tuition, fees and room and board) and if during the drop period you reduce the number of credit hours to less than full-time, any refund due from this reduction in charges may go to repay the Federal Direct Graduate PLUS Loan. If you use your Federal Direct Graduate PLUS Loan to pay your university charges (tuition, fees and room and board) and you withdraw from all of your classes or drop below half time, any refund may go to repay the Federal Direct Graduate PLUS Loan.

REPAYMENT

A Graduate PLUS borrower will receive a deferment while he or she is enrolled at least half-time at an eligible school. Upon dropping to less than half-time enrollment status, the borrower is not entitled to a grace period on his or her PLUS loans and repayment will begin within 45 days. The length of repayment and monthly payment amounts depend on the outstanding loan balance, the interest rate, and repayment policies. Interest on the Federal Direct Graduate PLUS Loan begins to accumulate at the time the first disbursement is made.

LENDER

The lender for the Graduate PLUS Loan Program is the Federal Government. The contact information is:

U.S. Department of Education
Borrower Servicing Department
Direct Loan Servicing Center
PO Box 4609
Utica, NY 13504-4609
Telephone #: (800) 848-0983
Web: www.dlservicer.ed.gov

Note: you will need your Federal Personal Identification Number (PIN) to access this site.

DEFAULT

For loans repayable in monthly installments, borrowers will be declared in default after 270 days of not making scheduled payments (for loans repayable in less frequent installments, borrowers will be declared in default after 330 days of not making scheduled payments). If you default on a Federal Direct Graduate PLUS Loan and the servicer is unable to collect, it will harm your credit rating and the federal government may take action to recover the loan. You cannot receive further financial aid if you are in default status.

DEFERMENT/FORBEARANCE

Your monthly Federal Direct Graduate PLUS Loan payment may be temporarily suspended if you qualify for a deferment or forbearance. A deferment is a period in which repayment of the principal balance is postponed. During a deferment, the student is responsible for the interest that accrues on the Federal Direct Graduate PLUS and Federal Direct Graduate PLUS Consolidation Loans in deferment. If the student is not eligible for a deferment, the student may still be eligible for forbearance.

There are several deferment types:

• Economic Hardship Deferment Request
• Education Related Deferment Request
• Internship/Residency
• Teacher Shortage Area
• PLUS borrowers, where student is enrolled at least half time and borrowed a Federal Direct Loan
• In School Deferment Request
• Engaged in at least half-time studies
• Engaged in a Graduate Fellowship
• Engaged in Rehabilitation Training
• Parental Leave/Working Mother Deferment Request
• Public Service Deferment Request
• Active duty in the Armed Forces
• Serving full-time Public Health Service
• Active duty in National Oceanic & Atmospheric Administration (NOAA)
• Serve in the PEACE CORPS
• Full-time paid volunteer in ACTION PROGRAMS
• Full-time volunteer in a TAX-EXEMPT ORGANIZATION
• Temporary Total Disability Deferment Request
• Unemployment Deferment Request

Forebearance is an arrangement to postpone or reduce your monthly Federal Direct Graduate PLUS Loan payment amount for a limited and specific period of time in which the student is charged interest. If the student indicates a temporary inability, but willingness to pay the loan(s), the student may ask for or be offered forbearance. The student must apply and qualify for forbearance and the U.S. Department of Education must approve the request in order for a forbearance to be in effect.

There are several forbearance types:

• Americorps Forbearance Request
• General Forbearance Request
• Internship/Residency Forbearance Request
• Loan Debt Burden Forbearance Request

For details about deferment/forbearance options, visit http://www.dlservicer.ed.gov. Note: you will need your federal Personal Identification Number (PIN) to access this site.