You may review the Plain Language Disclosure for changes that impact your Federal PLUS Loan(s) here. The terms on your existing loan(s) are the same as they were at the time of disbursement, and while your current loan(s) may not be affected, you will want to be aware of these changes. For your convenience, the changes are summarized here:
The following changes apply only to graduate and professional student Federal PLUS Loan borrowers and to endorsers of Federal PLUS Loans made to graduate and professional student borrowers:
Item 8—Repayment: Effective July 1, 2009, an Income-Based Repayment Plan is available to eligible graduate and professional student Federal PLUS Loan borrowers. Under this plan, the required monthly payment amount will be based on a borrower’s income during any period when the borrower has a partial financial hardship. The maximum repayment period under this plan may exceed 10 years. Eligible borrowers who meet certain requirements over a 25-year period may qualify for cancellation of any outstanding balance on their loans.
The following change applies only to parent Federal PLUS Loan borrowers:
Item 12—Deferments: Effective for loans first disbursed on or after July 1, 2008, parent borrowers of PLUS loans may request that repayment of loan principal be deferred while the student on whose behalf the loan was obtained is enrolled on at least a half-time basis and for the 6-month period after the student ceases to be enrolled at least half-time. Interest will continue to be charged on the loan during this period.
The following changes apply to all Federal PLUS Loan borrowers:
Item 1—General: Information about your loan(s) will be submitted to the National Student Loan Data System (NSLDS). Information in NSLDS is accessible to schools, lenders, and guarantors for specific purposes as authorized by the Department.
Item 2—Loan Cancellation: Before your lender sends your loan money to your school, you may cancel or reduce the amount of your loan by writing to your school or lender. After your loan money is sent to your school, you may cancel all or part of your loan by notifying your school within certain time frames. If your school has obtained your written confirmation of the types and amounts of loans you want to receive before crediting the loan funds to your account, you may cancel all or a part of that loan by informing the school within 14 days after the date the school notifies you of your right to cancel the loan, or by the first day of the school’s payment period, whichever is later. If your school has not obtained your written confirmation of the loans you want to receive, you may cancel all or part of the loan by informing the school within 30 days of the date the school notifies you of your right to cancel the loan. If you cancel all or a portion of a loan as described in this paragraph, your school will return the cancelled amount to your lender, and the loan fees will be eliminated or reduced in proportion to the amount returned. You may also pay back all or a part of your loan within 120 days of the date your lender sends your loan money to your school, and your loan fees will be eliminated or reduced.
Item 8—Repayment: Effective July 1, 2009, the second sentence of the second paragraph is revised to read as follows: “My principal repayment period for each loan, exclusive of any period(s) of deferment or forbearance, generally lasts 5 years but may not exceed 10 years (except under an extended or income-based repayment plan).”
Item 9—Interest: Effective for loans first disbursed on or after July 1, 2006, a Federal PLUS Loan has a fixed interest rate. In addition, the following sentences are added: “If I qualify under the Servicemembers Civil Relief Act, the interest rate on my loans obtained prior to military service may be limited to 6% during my military service. To receive this benefit, I must contact my loan holder for information about the documentation I must provide to show that I qualify.”
Item 14—Loan Discharge: Your loan may be discharged (forgiven) if you become totally and permanently disabled as defined by the Act and meet certain other requirements.
Item 17—Sale or Transfer of Your Loan: Your lender may sell or assign this loan without your consent and without selling or assigning any of your other loans. The sale or transfer of your loan does not affect your rights and responsibilities with respect to the loan. If ownership of a loan is transferred and the entity to which you must make payments changes, you will be notified of that entity’s name, address and telephone number, the effective date of the sale or transfer, and the date when you must begin sending payments to that entity.
Item 20—No Accrual of Interest for Active Duty Service Members: You may consolidate your FFELP loans first disbursed on or after October 1, 2008 (including Federal Consolidation Loans that repaid FFELP or Direct Loan Program loans first disbursed on or after October 1, 2008) into the Direct Loan Program to take advantage of the no accrual of interest benefit for active duty service members. No interest will be charged on the portion of a Direct Consolidation Loan that repaid FFELP or Direct Loan Program loans first disbursed on or after October 1, 2008, during periods of qualifying active duty military service (for up to 60 months).
Item 21—Other Loan Forgiveness and Repayment Benefits: The Act may provide for certain loan forgiveness or repayment benefits on your loans in addition to the benefits described in you MPN. If other forgiveness or repayment options become available, your loan holder will provide information about these benefits.