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Parent PLUS Loan

Please read this important notice about changes in federal loans at MSU.

Who may borrow?

You may borrow if you are the parent/stepparent of a dependent student, you are not in default on any federal education loans, and you are a U.S. citizen or eligible non-citizen.

How to apply

PLUS application is a two step process.
If you don't complete both steps the loan will not be processed. These steps can be completed in either order.

  1. Complete an MSU PLUS Loan Application Form (LAF) for the appropriate loan period:
  2. Complete a PLUS Master Promissory Note (MPN)
    NOTE TO PREVIOUS BORROWERS: You need to complete only ONE multi-year MPN per student. Therefore if you completed an MPN for a previously borrowed PLUS at MSU, it is still valid UNLESS a different parent/stepparent wishes to borrow on behalf of the student OR an endorser (co-signer) was needed for the previous PLUS loan.

    IF you need to complete a PLUS MPN:

Loan maximum

The loan limit for each year is the annual cost of education (the "budget") minus other financial assistance. If your requested amount is too high, it will be reduced to fit within the budget.

Interest rate

Under Direct Loans, the interest rate is 7.9%. Under the Federal Family Education Loan Program (FFELP) the maximum interest rate was 8.5%.

Loan origination fees

    The standard loan origination fee is 3%.  Due to changes in federal law, beginning with Fall 2008, all PLUS loans will have the 3% fee deducted from the disbursement of the loan.  

PLUS repayment

The first payment is due within 60 days after each loan is fully disbursed. Therefore the first payment of a fall/spring loan will be probably be due in February. Interest begins to accumulate when the first disbursement is made. You may contact the servicer and request forbearance of the principle.

When to apply

You should begin the application process prior to the beginning of the academic year in order to ensure timely processing. Depending on the time of year, it can take up to 4 weeks from the time MSU receives the PLUS LAF until the servicer sends notice of acceptance or rejection.

Steps in PLUS processing:

  • After we receive the LAF, MSU confirms student's eligibilty for a PLUS and transmits the application to the PLUS loan servicer.
  • The servicer performs a credit check after receiving either the paper or electronic MPN.
  • The servicer notifies the parent of acceptance or rejection of the loan.
  • If the loan is approved, funds are sent directly to MSU and applied against student's bill.
  • Any PLUS funds that exceed MSU charges are given to student as a refund by the Student Accounts division of the Controller's Office (517/355-3343).

PLUS disbursement

Disbursement of the PLUS funds depends on when the loan is approved. By law PLUS funds cannot be disbursed until 10 days prior to the first day of classes in a semester. If that date has passed, and the approval process has been completed, MSU will generally disburse the funds within 2 days of approval.

Options if PLUS is not approved

These are some options the family may want to consider:

  • Parent may be approved with an endorser (co-signer).
  • Student may call the Office of Financial Aid and request "PLUS replacement". This means the student may be able to borrow an additional amount of unsubsidized Stafford Loan.
  • Private alternative loans may be available.
  • You may wish to explore other options such as a home equity loan.

Helpful links

 

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