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Program Description
The
Direct PLUS Loan is a credit-worthy loan
for the parent or legal guardian of a dependent student (Direct PLUS) or a
graduate student (Direct Graduate PLUS) who has borrowed the maximum amount of
Direct Loan assistance.
The loan is available to students regardless of the level of financial need.
Direct Loans are funded by the U.S. Department of Education through Villanova
University and are managed by federal loan servicers, under the supervision of
the Department of Education.
If you are a dependent student, your parent(s)
can borrow up to your cost of education less all other financial aid received.
Graduate students are also eligible to borrow up to their total cost of
education less all other financial aid received. Direct PLUS Loans are not based
on need but rather the borrower's creditworthiness.
Villanova parents who wish
to apply only for a Direct PLUS Loan for the 2011-2012 academic year are
required to complete the FAFSA.
Loan Amounts
Parents and Graduate students can borrow up to
an amount equal to the cost of attending Villanova, less any other financial aid
received. This would include grants, scholarships, and other loans including the
Direct Loan. Since interest is not paid by the Federal Government,
family income has no impact on how much you can borrow.
Lender
Direct PLUS and Direct Graduate PLUS Loans are funded by the U.S. Department of Education through
Villanova University. Under
the supervision of the Department of Education, the following servicers are
assigned to manage all Direct Loans:
- NelNet
- Sallie Mae
- Great Lakes
- ACS
- FedLoan Servicing (PHEAA)
One to two weeks after the first disbursement, parents/students will receive a
mailing notifying them of their selected loan servicer.
Fees
Fees are deducted from the loan funds
and are included in the amount a parent will pay back. The U.S. Department of
Education charges a loan fee of 4% of the principal amount of each Direct PLUS
Loan. This fee is deducted proportionately from each disbursement of your loan.
Interest Rates
All loans disbursed on or after July 1, 2006
will be subject to a fixed interest rate of 7.9%.
Repayment
For parents of dependent undergraduate
students, repayment normally begins within 60 days after the loan has been fully
disbursed. Parents may request an in-school deferment of repayment until after
the student's graduation.
Graduate students will automatically receive an
in-school deferment while they are enrolled at least half-time. Once you
graduate, or drop below half-time status, repayment will begin within 60 days
after your enrollment status has changed.
Direct PLUS Endorser
Alternative
An endorser is someone who agrees to
repay the Direct PLUS Loan if the borrower does not repay the loan. The endorser may not be
the student on whose behalf a parent obtains a Direct PLUS Loan. In some cases,
you may also be able to obtain a Direct PLUS Loan if you document to the
Department of Education's
satisfaction that there are extenuating circumstances related to your adverse
credit history.
Master Promissory Note
All borrowers seeking a Direct PLUS or Graduate PLUS Loan must complete a
Master Promissory Note (MPN) with the U.S. Department of Education. Through a
Direct PLUS Loan MPN, you may receive multiple PLUS loans over a maximum 10 year
period. You have to complete the promissory note only once. Thereafter, all you
need to do is supply the amount you want to borrow each year and successfully
complete the credit-check process. An MPN must be completed for each student
enrolled.
If borrowing a Direct PLUS loan with an endorser, please note that a new
MPN will need to be signed each academic year.
You may complete your Direct PLUS MPN at
www.studentloans.gov.
Credit Check
When you apply for a Direct PLUS Loan, the Department
of Education will check your credit history. To be eligible for a Direct PLUS
Loan, you must not have an adverse credit history. If you are found to have an
adverse credit history, you may still borrow a Direct PLUS Loan if you get an
endorser who does not have an adverse credit history.
Application Process
Steps to complete a Direct PLUS/Graduate PLUS Loan:
1. Go to www.studentloans.gov to
complete the Direct PLUS Loan application.
2. Complete the MPN at
www.studentloans.gov and sign the MPN. Upon approval
of the Direct PLUS application and credit check,
follow step 2.
3. Complete the Villanova University Direct PLUS Loan Application (for
parent or
graduate
student) and return the completed form to Office of Financial Assistance.
*NOTE: Your loan is not complete and will not be certified by the Office of
Financial Assistance until ALL three of the above steps have been completed.
If you have any questions about the
Federal Direct PLUS or Federal Direct Grad PLUS Loan, please send us an email
with your question, name, and Villanova University number to
finaidloan@villanova.edu.
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