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How to Apply for Federal Direct Loans

STEP 1: Federal Direct Stafford Loan (Student Borrowers)

Entrance counseling
If you have not previously received a subsidized/unsubsidized loan, you must complete the entrance counseling before your loan can be processed. This ensures that you understand your responsibilities and obligations regarding your loan. You may complete this counseling online.  Averett University will be notified electronically when you complete your counseling.

The Master Promissory Note
You will also need to complete the Master Promissory Note (MPN) online at the StudentLoans.gov website. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of your loan(s).
To complete your MPN online, you will be required to use your Department of Education-issued PIN, same PIN used for the FAFSA application. If you do not have a PIN, you may request one from the official PIN site.

STEP 2: Federal Direct PLUS Loan (Parent Borrowers)

Parent eligibility requirements for a Direct PLUS Loan
You must be the student's biological or adoptive parent or the student's stepparent, if the biological or adoptive parent has remarried at the time of application. Your child must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. For financial aid purposes, a student is considered "dependent" if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid is submitted. If a student is considered dependent, then the income and the assets of the parent have to be reported on the FAFSA.

Additional requirements to receive a PLUS loan
Parent PLUS Loan borrowers cannot have an adverse credit history (a credit check will be done). In addition, parents and their dependent child must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs.

Applying for a PLUS Loan and the Master Promissory Note (MPN)
To take out a PLUS Loan, you must complete a PLUS Application. The parent PLUS application expires after 180 days and must be resubmitted each semester.  This application must have all sections completed in order to be processed. Please return this application by scan and email to your Student Financial Services Counselor; fax to 434-791-5647; or mail to Averett University, Student Financial Services Office, 420 West Main Street, Danville, VA 24541. 
A master promissory note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). The MPN will need to be completed by going online at the StudentLoans.gov website. If you are borrowing Direct PLUS Loans for more than one student, you'll need to complete a separate MPN for each one. To complete an MPN online, you will be required to use your Department of Education-issued PIN (not your child's). If you do not have a PIN (same PIN used for FAFSA application), you may request one from the official PIN site.
In most cases, once you've submitted the MPN and it's been accepted, you won't have to fill out a new MPN for future loans you receive to pay for the educational expenses of the same student.
You'll receive a disclosure statement that gives you specific information about any loan that the school plans to disburse under your MPN, including the loan amount and loan fees, and the expected loan disbursement dates and amounts.

Credit check & endorser alternative
To be eligible for a PLUS Loan, you must not have an adverse credit history, which the Department will check for when you apply for the loan. If you are found to have an adverse credit history, you may still borrow a PLUS Loan if you get an endorser who does not have such a history. An endorser is someone who agrees to repay the loan if you do not. The endorser may not be the student on whose behalf a parent obtains a PLUS Loan.

Loan limits, interest rate, and loan charges
There are no set limits for Direct PLUS Loans, but you may not borrow more than the cost of your child's education minus any other financial aid received, such as a Direct Subsidized or Unsubsidized Loan. Averett University will determine the actual amount you may borrow.
Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement. In addition to interest, you pay a loan origination fee which helps reduce the cost of making these low-interest loans. The fee is deducted before your loan funds are sent to Averett University.

Dependent students whose parents have applied for but were unable to get a PLUS Loan may be eligible to receive additional Direct Unsubsidized Loan funds.  Contact your Student Financial Services Counselor for details.

Direct Loan Fees for FY 2014 and FY 2015

Loan Type

Impacted Loans

Loan Fee Percent

Fee Example

Direct Subsidized Loans & Direct Unsubsidized Loans

FY 2014
First disbursed on or after December 1, 2013 and before October 1, 2014

1.072

$58.96 on a
$5,500 loan

FY 2015
First disbursed on or after October 1, 2014 and before October 1, 2015

1.073

$59.01 on a
$5,500 loan

 

Direct PLUS Loans (Parent & Grad/Prof Student

FY 2014
First disbursed on or after December 1, 2013 and before October 1, 2014

4.288

$428.80 on a
$10,000 loan

FY 2015
First disbursed on or after October 1, 2014 and before October 1, 2015

4.292

$429.20 on a
$10,000 loan

Loan fee calculations that result in more than two decimal points must be truncated (not rounded) to two decimal points (cents).

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