Graduate PLUS Loans

To be eligible for the Direct Graduate PLUS Loan, you must:

• Meet Federal and Penn State Financial Aid Eligibility Requirements

• Be a graduate student enrolled in an eligible program

• Submit a Free Application for Federal Student Aid (FAFSA)

• Be offered for your full Federal Direct Unsubsidized Loan eligibility

• Consent to and pass a credit check conducted by the U.S. Department of Education

Determine the loan period for which you plan to apply. If your student is planning to be enrolled for both fall and spring semesters, we recommend that you apply for the fall/spring Loan term. The summer loan term cannot be combined with other terms.

If you choose a fall/spring loan period, the amount of the loan will be split equally between the two semesters; the disbursement of a $10,000 fall/spring loan would be $5,000 for the fall semester and $5,000 for the spring semester.

The loan origination fee is a fee charged by your lender upon entering into a loan agreement to cover the cost of processing the loan. This agreement will be made when you sign the Master Promissory Note (MPN) at studentaid.gov. The fee will be taken out of the gross amount of your loan when the funds are disbursed to the school.

Calculate the Loan Fee (Net vs. Gross)

Divide the total loan amount you want to borrow by 0.9577. For example, to receive a net amount of $10,000, request a gross amount of $10,441 ($10,000/0.9577 = $10,441)

Your approved and accepted Direct PLUS loan will appear on both the Financial Aid Offer and Student Account Statement in LionPATH, however, the loan amounts will be different.

The loan amount on the Financial Aid Offer is the gross amount. In contrast, the Tuition Bill shows the net amount after the loan origination fees have been deducted.

Graduate students will need to apply for the Direct Graduate PLUS Loan on studentaid.gov. Like the FAFSA, PLUS Loans must be requested each academic year.

Preview a read-only version of the Direct Graduate PLUS application here.

You will be notified at the time that you submit your application if your credit has been approved or denied.

Your debt-to-income ratio, credit score, and employment status are not taken into consideration; however, adverse credit typically results in a Direct PLUS loan denial.

For more information about adverse credit, visit studentaid.gov.

If your application has been credit approved, your application will be sent electronically to us within 2-3 business days. Once the information has been loaded into LionPATH, we will process the application and add the Direct Graduate PLUS to your Financial Aid Offer. Processing for the upcoming academic year will begin in July. Spring-only in October, and Summer in April.

The application will NOT process if:

• You are not enrolled in a degree-seeking graduate program

• You do not have a FAFSA on file for Penn State

• You have not been offered your federal aid eligibility (either we have not started financial aid offers or you are not eligible for federal aid)

• You are in default on a previous federal loan

First-time borrowers are required to Complete a Master Promissory Note (MPN) and Entrance Counseling for the Direct Graduate PLUS Loan at studentaid.gov. The Master Promissory Note and Counseling must be signed/completed for the loan to appear as a credit on the bill and disburse into your student account.

In most cases, you will only need to complete these items once during your college career. You do not need to sign a new MPN for every application submitted; unless your application is denied and then later approved with an endorser or it has been longer than 10 years since you have last signed a note.

You can complete these requirements at any time once you have been accepted to Penn State. Once we begin to process your loan(s), these items will be presented to you in your ‘To Do List’ in LionPATH if they are still incomplete. Once completed on studentaid.gov, notification will be sent electronically to us within approximately 2-3 business days. At that time, your To Do List item will be removed from your LionPATH record.

You can preview a copy of the Grad MPN or Grad Entrance Counseling on studentaid.gov or for more information and/or to complete the MPN or Counseling log into studentaid.gov.

If you have technical difficulty signing the MPN, please contact the U.S. Department of Education's Student Loan Support Center at 800-557-7394.

Obtain an Endorser or Document Extenuating Circumstances

If your Direct Graduate PLUS Loan request is denied, you can obtain an endorser. In some cases, you can document extenuating circumstances with the U.S. Department of Education.

The U.S. Department of Education will provide you with credit appeal and endorser information. Contact the U.S. Department of Education Student Loan Support Center at 800-557-7394 for more information regarding your denial, appeal, or endorser process.

New MPN Required if you Pursue an Endorser

If you are approved with an endorser (co-signer), you will need to sign a new Master Promissory Note (MPN) for each endorsed loan.

If you have an endorser for multiple Direct Graduate PLUS applications (for multiple students or multiple applications), please note the following:

• studentaid.gov will allow you to sign multiple MPN's at one time but will only link to one loan at a time. Once they link the MPN to the first endorsed application all other pending MPN's will be expired.

• We recommend signing the first MPN and waiting for it to link to the application before signing the MPN for the next application. You will know that it is linked when it appears as an available aid source in LionPATH.

If you have technical difficulty signing the MPN, please contact the U.S. Department of Education's Student Loan Support Center at 800-557-7394.

Direct Graduate PLUS Credit Counseling

Direct Graduate PLUS Loan Credit Counseling will be required for all borrowers who are initially denied due to adverse credit, but later approved with an endorser or through a credit appeal.

You must complete the required counseling on studentaid.gov for the loan to disburse.

When The National Student Loan Data System (NSLDS) indicates that you are in DEFAULT on a federal loan, you cannot receive federal financial aid until you resolve the default. Once you can show that the default has been resolved, you can re-apply for the Direct PLUS loan.

The default may not show on your credit history when the credit check is performed, so in some cases, you may be preliminarily approved for the Direct PLUS Loan. However, once the school is notified that you have a federal loan that is in default, your Direct PLUS loan will be cancelled. In its place, we can offer the student an additional unsubsidized loan in the amount of $4,000 or $5,000 based on your student's grade-level.

Once you can show that your federal loan default has been cleared, then you can re-apply for the Direct PLUS loan. If approved, any additional Direct Unsubsidized Loan that has not been disbursed, will be cancelled.

Documentation

Below is a list of acceptable documentation which you may submit to Penn State to document that your defaulted loan has been resolved:

1. Paid In Full Letter
   A letter from your lender stating your loan has been paid in full and you are no longer in default.

2. Satisfactory Repayment Arrangement Letter
   You can regain your eligibility for federal financial aid if you make repayment arrangements that are satisfactory to your loan holder. Satisfactory arrangements require you to make six consecutive, full, voluntary payments on time. Once you have made the required payments, you must provide documentation to us by submitting a written statement from the loan holder indicating that you have made satisfactory repayment arrangements on your loan.

3. Loans have been consolidated or are in deferment
   A letter from the lender stating loans are in deferment or have been consolidated.

NOTE:

All default resolution letters must be from the holder of the loan or from the Department of Education. Please call 1-800-621-3115 for assistance.

Although you can regain eligibility for all federal financial aid funds by making satisfactory repayment arrangements, the loan is still in default. After you make more payments, the loan may be rehabilitated and it will not be in default anymore.

For additional information about how to resolve a Federal Loan in default visit:

Understanding Delinquency and Default