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Minnesota State University, Mankato
Minnesota State University, Mankato

Federal Direct PLUS Loan

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The Federal Direct PLUS Loan is intended to allow parents with acceptable credit histories to borrow for each dependent son or daughter enrolled in a post-secondary institution.  Parents should use the Direct PLUS Loan only if they wish to assume the educational debt for their son or daughter or if additional funds are needed to meet the educational budget of the institution their son or daughter is attending.

Apply for Direct PLUS Loan

IMPORTANT: The Direct PLUS Loan complies with both Satisfactory Academic Progress Standards (SAPS) criteria as well as the Family Education Rights and Privacy Act (FERPA).

CAUTION: Applying for a Plus Loan prior to receiving an Official Award Notice could result in the expiration of the credit check process, which is normally only valid for 90 days.   

Loan Eligibility

An eligible parent borrower must:

  • Be the natural or adoptive parent, or legal guardian of the dependent student,
  • Be a U.S. citizen or eligible non-citizen (eligible non-citizens must supply documentation of their immigration status),
  • Be borrowing on behalf of a dependent student who meets all of the requirements for the Federal Direct Loan Program (for this reason, Minnesota State Mankato requires a FAFSA to be on file prior to processing a Direct PLUS Loan),
  • Have a credit worthy history as determined by your lender, and
  • Not be in default or owe a refund on any Title IV Federal Student Aid.

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Credit Requirements

Minimum of 6 credits is required.

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Loan Amounts

There are no annual or aggregate limits on Federal PLUS loans. However, you may not borrow more than the cost of education (usually expressed as a yearly amount) as determined by the school, less any other financial aid received during the time period the loan will cover.  For example, if the cost of education is $14,000 per academic year, that is the maximum amount of student financial assistance your son or daughter may receive from all sources including the Federal Direct PLUS Loan.

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Costs Involved

The guarantee and origination fees are subtracted from the loan, by the lender Department of Education Servicer, to cover the expense of processing the loan and Direct PLUS loan defaults.  The fees and the current interest rate on your loan are printed on the loan disclosure statement you receive prior to or at the time the first half of your loan is disbursed. This disclosure will usually come from your lender's guarantor the Department of Education Servicer.

Origination Fees

  • First disbursed on or after October 1, 2017 and before October 1, 2018 = 4.264% origination fee
  • First disbursed on or after October 1, 2018 and before October 1, 2019 = 4.248% origination fee

This is a loan fee deducted proportionately from each loan disbursement you receive. This means the money you receive will be less than the amount you actually borrow. You're responsible for repaying the entire amount you borrowed and not just the amount you received.

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Disbursement of Funds

Your Direct PLUS loan funds will be disbursed at the beginning of each term (1/2 Fall and 1/2 Spring). If you are applying for the academic year as a whole (Fall and Spring together) or if you are applying for a single term, your funds will be disbursed at the earliest possible disbursement date according to the lender's (guarantor's) and Minnesota State University, Mankato's predetermined disbursement schedule.

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You MUST repay the Federal Direct PLUS Loan.  It is not a grant.  Failure to repay the loan has serious consequences.  If you default on your loan, all national credit bureaus will be notified.  You will be subject to collections procedures by external collection agencies, wage garnishment, and seizure of federal income tax refunds.

Fall 2018- Summer 2019

  • As of 7/1/2018, Direct PLUS loans are fixed at 7.6% for the 2018-2019 school year. The interest on the Direct PLUS loan is not paid by the U.S. Department of Education during in-school periods. Interest accrues from the time of final disbursement. However, interest accrued during periods of deferment can be paid periodically or can accrue and be capitalized and added to the principal amount of the loan.

Payments begin on a Direct PLUS loan after the final disbursement of the loan. Generally, the maximum repayment period is 10 years.  Repaying the loan as quickly as possible minimizes the interest costs.  A repayment schedule is sent to the parent borrower upon final disbursement of the loan.  The parent remains responsible for all payments required to meet the repayment schedule even if other arrangements have been made, for example, the student makes the payment on behalf of the parent borrower.

The Direct PLUS Loan Program contains a variety of provisions designed for flexible repayment.   Among the provisions are deferments and forbearances, which may enable the borrower to temporarily suspend or reduce payments.  If problems arise in making payments, the lender or servicer should be contacted immediately to see if any of the following conditions are met.


A deferment is a period of time during which repayment requirements are temporarily suspended.  Deferments are granted for specific time periods and only for conditions set forth under federal law. 


Department of Education servicer is able to assist through times of difficulty in making payments through the use of forbearance.  If a borrower is not eligible for a deferment and has difficulty making the scheduled payments, lender or servicer should be contacted to discuss the possibility of a forbearance to reduce or suspend regular payment or lengthen the repayment period.

Department of Education servicer may grant a forbearance if eligibility for deferment is exhausted, or if the borrower is involved in certain bankruptcy proceedings or is applying for a total and permanent disability cancellation.  In most cases, the decision regarding whether or not to grant forbearance is made by the Department of Education servicer.  The Department of Education servicer is anxious to work with borrowers when they believe the borrower has a commitment to repay the loan.

The interest which accrues on the loans during periods of forbearance is the borrower’s responsibility.  Payment of interest can be made during the forbearance or it can be capitalized and added to the loan.  If the interest is capitalized, the monthly payment amount may increase after the forbearance period has ended.

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