Loans

• Undergraduate loan limits: Freshman – $3,500; Sophomore – $4,500; Junior and Senior – $5,500; Cumulative limit – $23,000
• Loans are need-based, but if it is determined that there is no need, a student can borrow an Unsubsidized Loan (see below).
• FAFSA is required annually.
• Students must be enrolled in at least six credit hours (half-time) to borrow federal loans.
• Repayment of principal and interest will begin six months after ceasing to be enrolled at least half-time.
• The federal government will pay the interest while you are a student.
• The interest rate for Subsidized Loans disbursed after 7/1/2024 and before 7/1/2025 is fixed at 6.53%.
• The federal government will deduct an origination (processing) fee from the amount you borrow. The rate for loans disbursed after 10/1/2020 and before 10/1/2025 is 1.057%.
• Students must maintain satisfactory academic progress to remain eligible.

• Undergraduate loan limits (when combined with Subsidized Loan): Freshman – $5,500; Sophomore – $6,500; Junior and Senior – $7,500; Cumulative limit – $31,000 when combined with Subsidized Loan.
• Independent undergraduate loan limits (in addition to regular undergraduate loan limits): Freshman and Sophomore – $4,000; Junior and Senior – $5,000; Cumulative limit – $57,500 when combined with Subsidized Loan.
• FAFSA is required annually.
• Students must be enrolled in at least six credit hours (half-time) to borrow federal loans.
• Repayment of principal and interest will begin six months after ceasing to be enrolled at least half-time.
• The federal government will NOT pay the interest while you are a student. However, you do have the option of making interest-only payments while you are in school, or waiting until repayment begins on the principal six months after ceasing to be enrolled at least half-time.
• The interest rate for undergraduate Unsubsidized Loans disbursed after 7/1/2024 and before 7/1/2025 is fixed at 6.43%.
• The federal government will deduct an origination (processing) fee from the amount you borrow. The rate for loans disbursed after 10/1/2020 and before 10/1/2025 is 1.057%.
• Students must maintain satisfactory academic progress to remain eligible.

• Available to credit-worthy parents of dependent students.
• Eligibility is limited to educational costs minus financial aid.
• Repayment begins within 60 days of full disbursement.
• Deferments are available upon request to the U.S. Department of Education.
• The interest rate for Parent PLUS Loans disbursed between 7/1/2018 and 7/1/2019 is fixed at 7.6%.
• The federal government will deduct an origination (processing) fee from the amount borrowed. The rate for loans disbursed between 10/1/2018 and 9/30/2019 is 4.248%.

First-time borrowers: Complete steps 1 and 2.
Repeat borrowers: Complete step 1 only.

Borrowers must log in with their Federal Student Aid ID (FSA (ID).

Note: If more than one parent/stepparent is borrowing, each must complete the required steps for their own loan.

1. Request a Direct PLUS Loan from the U.S. Department of Education.
   • The parent indicates the amount he/she wants to borrow (for the current school year) based on the student’s eligibility as indicated in the financial aid package notification.
2. Sign a Master Promissory Note
   • Parent borrowers must complete an MPN for each student using their own (parent) FSA ID.
   • The Direct PLUS Loan MPN constitutes the parent’s legally binding agreement to repay all Direct PLUS Loans that the student receives.
   • The Direct PLUS Loan MPN explains all of the terms and conditions of Direct PLUS Loans.

Deferment

Parent borrowers are generally expected to enter repayment for a Federal Direct Parent PLUS Loan once the loan is fully disbursed (paid out) to the school. For example, if the loan covers both fall and spring semesters, repayment would begin once the spring portion disburses. However, you may contact the loan servicer to request a deferment for up to six months after your child ceases to be enrolled at least half-time. You don’t have to make any payments while your loan is deferred.

• You have the option of requesting deferment as part of the loan request process.
• You can also contact the loan servicer to request a deferment.
• Interest will continue to accrue during deferment.
• Your loan servicer will notify you when your first payment is due.

In the Event of a Denied Request

If a parent borrower’s request for a Federal Direct Parent PLUS Loan is denied, the student will automatically become eligible for an additional $4,000-$5,000 in a Federal Direct Unsubsidized Loan, depending on grade level. If more is needed than this additional amount, speak with your financial aid counselor for additional options specific to your situation.

Try This Resource

Federal Student Loans: Direct PLUS Loan Basics for Parents provides parents with information on Direct PLUS Loans for parents, including an overview of eligibility, application process, and repayment.

In order to have federal loan eligibility, students must file a Free Application for Federal Student Aid (FAFSA) for the relevant academic year. Anderson University notifies students of their direct loan eligibility in the financial aid package notification.

• Federal Direct Subsidized and Unsubsidized Loans are borrowed by the student.
• Federal Direct Parent PLUS Loans are borrowed by a parent on behalf of the student.
• Federal Direct Graduate PLUS Loans are borrowed by a student in a graduate degree program.

How to Accept, Reduce, or Decline Your Federal Loan Eligibility

Each year, we require students to accept, reduce, or decline their federal loan eligibility. Students can do this by logging into AccessAU.

• Navigate to the Student Center (Self Service>Student Center)
• Click the link to ‘Accept/Decline’ in the Finances section
• Click the appropriate year
• Check the box to either accept or decline your subsidized and/or unsubsidized loan(s).
  • If you wish to reduce the amount, click accept and then edit the figure (see note).
  • After making the appropriate selections, click submit.

Note: The Department of Education will take a 1.062% processing fee from the total amount that disburses between 10/1/2018 and 9/30/2019. If you wish to include the loan fees in the amount that you borrow, you will want to add 1.062%. For example, if you are eligible to borrow $5,500, but only need $2,000 to cover your balance, and you want to cover loan fees, the amount to reduce the loan to is $2,021 ($2,000 x .01062 = $21, so $2,000 + $21 = $2,021).

STUDENTS – Federal Direct Subsidized and Unsubsidized Loans

First-time student borrowers must complete two steps at studentloans.gov to receive direct loan funds.

1. Complete online Entrance Counseling (ELC), an interactive session that the student borrower must complete.
   • The U.S. Department of Education requires that every student completes Entrance Counseling the first time they borrow a Federal Direct Loan.
   • If students who previously borrowed transfer from one University to another, Entrance Counseling does not need to be repeated. Likewise, graduate students who previously borrowed direct loans as undergraduates do not need to repeat Entrance Counseling.
2. Sign a Master Promissory Note (MPN). The MPN must be completed one time and is valid for up to 10 years.
   • The MPN is a legal document in which students promise to repay their loan(s) and any accrued interest and fees to the U.S. Department of Education.
   • The MPN explains student rights and responsibilities as a first-time borrower.
   • Student borrowers must complete the MPN using their own Federal Student Aid ID (FSA ID).

Beginning July 1, 2010 all colleges and universities must use the William D. Ford Federal Direct Loan Program for new federal loans, commonly referred to as Direct Loans. Under the Direct Loan Program the federal government will serve as your lender.

Grad PLUS loan borrowers will be subject to a credit check by the U.S. Department of Education.

Graduate students indicate the amount they want to borrow (for the current school year) based on their eligibility as indicated by their SFS counselor.

To receive the funds you must complete a Master Promissory Note (MPN) at www.studentloans.gov.

Log in using the same FSA ID which was used to complete the Free Application for Federal Student Aid (FAFSA).

The MPN is a legal document in which the student promises to repay the loan and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of the loan. Once the MPN has been completed the school will be informed electronically.

1. Request your loan online.
2. Complete and sign a Master Promissory Note (MPN) online.

Visit the FSA ID page for instructions.