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Federal Direct PLUS Loan

Application and Master Promissory Note [60-DAY DRAFT 08/14/2013]

William D. Ford Federal Direct Loan Program

Warning: Any person who knowingly makes a false statement or misrepresentation on this form or any accompanying document is 

subject to penalties that may include fines, imprisonment, or both, under the U.S. Criminal Code and 20 U.S.C. 1097.

SECTION A: BORROWER INFORMATION – TO BE COMPLETED BY ALL BORROWERS; READ THE INSTRUCTIONS IN SECTION H BEFORE COMPLETING THIS SECTION

CHECK ONE – I am a: ☐ Graduate or Professional Student ☐ Parent of a Dependent Undergraduate Student

1. Driver’s License State and No. 2. Social Security No. 3. Date of Birth (mm-dd-yyyy)

4. E-Mail Address (optional)

 

5. Name and Permanent Address (see instructions) 6. Area Code/Telephone No.

7. Citizenship Status (to be completed by parent borrowers only -- check 

one)

(1) ☐U.S. Citizen or National

(2) ☐Permanent Resident/Other Eligible Non-Citizen

If (2), Alien Registration No.

8. Employer’s Name and Address 9. Work Area Code/Telephone No.

( )

10. References: List two persons with different U.S. addresses who do not live with you and who have known you for at least three years. If you are a parent borrower, do not list the student.

Name 1. 2.

Permanent Street Address

City, State, Zip Code

E-Mail Address (optional)

Area Code/Telephone No. ( ) ( )

Relationship to Borrower

SECTION B: SCHOOL INFORMATION – TO BE COMPLETED BY THE SCHOOL

11. School Name and Address 12. School Code/Branch 13. Identification No.

SECTION C: DEPENDENT UNDERGRADUATE STUDENT INFORMATION – TO BE COMPLETED BY PARENT BORROWERS ONLY

14. Dependent Undergraduate Student’s Name (last, first, middle initial) 15. Social Security No. 16. Date of Birth (mm-dd-yyyy)

SECTION D: BORROWER REQUEST, CERTIFICATIONS, AUTHORIZATIONS, AND UNDERSTANDINGS – ALL BORROWERS READ CAREFULLY BEFORE SIGNING BELOW

17. This is an Application and Master Promissory Note (MPN) for one or more Federal Direct PLUS (Direct PLUS) Loans. I request a Direct PLUS Loan under this MPN in an amount not to exceed my or (if I am a parent borrower) the 

student’s annual cost of attendance, minus other financial aid received for each academic year. The school will notify me of the loan amount that I am eligible to borrow. Within certain timeframes, I may cancel a loan or request a 

lower amount by contacting the school, or by refusing to accept or returning all or a portion of a loan disbursement that is made to me. The Borrower’s Rights and Responsibilities Statement that accompanies this MPN and the 

disclosure statements that will be provided to me contain additional information about my right to cancel a loan or request a lower amount. If I have an adverse credit history and obtain an endorser so that I may receive a Direct 

PLUS Loan, only one loan may be made to me under this MPN.

18. Under penalty of perjury, I certify that:

A. The information I have provided on this MPN and as updated by me from time to time is true, complete, and correct to the best of my knowledge and belief and is made in good faith.

B. I am (1) a graduate or professional student, (2) the biological or adoptive parent of the student identified in Section C, or (3) the spouse of the parent and my income and assets were reported on the Free Application for 

Federal Student Aid (FAFSA), or would be reported if a FAFSA were filed.

C. I will use the proceeds of loans made under this MPN for authorized educational expenses that I incur or, if I am a parent borrower, that the student incurs; I will immediately repay any loan proceeds that cannot be 

attributed to educational expenses for attendance on at least a half-time basis at the school that certified my loan eligibility.

D. If I owe an overpayment on a Federal Perkins Loan, Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Academic Competitiveness Grant (ACG), National Science or Mathematics Access to Retain Talent 

(SMART) Grant, or Leveraging Educational Assistance Partnership Grant, I have made satisfactory arrangements to repay the amount owed.

E. If I am in default on any loan I received under the Federal Perkins Loan Program (including National Direct Student Loans), the William D. Ford Federal Direct Loan (Direct Loan) Program, or the Federal Family Education Loan 

(FFEL) Program, I have made satisfactory repayment arrangements with the holder to repay the amount owed.

F. If I have been convicted of, or if I have pled nolo contendere (no contest) or guilty to, a crime involving fraud in obtaining funds under Title IV of the Higher Education Act of 1965, as amended (HEA), I have fully repaid the 

funds to the U.S. Department of Education (ED) or to the loan holder in the case of a Title IV federal student loan. If I am a parent applying for a Direct

PLUS Loan for a dependent undergraduate student, and if that student has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining funds under Title IV of the HEA, the student has fully 

repaid the funds to ED, or to the loan holder in the case of a Title IV federal student loan.

19. For each Direct PLUS Loan I receive under this MPN:

A. I authorize the school to certify my eligibility for the loan.

B. I authorize the school to credit my loan proceeds to my account at the school (if I am a graduate or professional student borrower) or to the student’s account at the school (if I am a parent borrower), and to pay to ED any 

refund that may be due up to the full amount of the loan.

C. I authorize ED to investigate my credit record and report information about my loan status to persons and organizations permitted by law to receive that information.

D. I authorize ED to defer repayment of principal on my loan if I enroll at least half time at an eligible school and, if I am a graduate or professional student, for the 6-month period after I cease to be enrolled at least half time, 

unless I notify ED differently.

E. I authorize the school and ED to release information about my loan to the references on the loan and to members of my immediate family, unless I submit written directions otherwise.

F. I authorize the schools, ED, and their agents to release information about my loan to each other.

G. I authorize the schools, ED, and their respective agents and contractors to contact me regarding my loan request or my loan, including repayment of my loan, at the number that I provide on this MPN or any future number 

that I provide for my cellular telephone or other wireless device using automated dialing equipment or artificial or prerecorded voice or text messages.

20. I understand that:

A. ED will give me the opportunity to pay the interest that accrues on each loan made under this MPN during deferment (including in-school deferment), forbearance, and other periods as provided under the Act. If I do not 

pay the interest that accrues during these periods, ED may add unpaid interest that accrues on each loan made under this MPN to the principal balance of that loan (this is called “capitalization”) at the end of the deferment, 

forbearance, or other period. Capitalization will increase the principal balance on my loan and the total amount of interest I must pay.

B. ED has the authority to verify information reported on this MPN with other federal agencies.

SECTION E: PROMISE TO PAY – TO BE COMPLETED BY ALL BORROWERS

21. I promise to pay to ED all loan amounts disbursed under the terms of this MPN, plus interest and other charges and fees that may become due as provided in this MPN. I understand that more than one loan may be made to 

me under this MPN for myself or for the student identified in Section C. I understand that by accepting any disbursement issued at any time under this MPN, I agree to repay the loan associated with that disbursement. 

22. If I do not make a payment on a loan made under this MPN when it is due, I will also pay reasonable collection costs, including but not limited to attorney fees, court costs, and other fees. 

23. I will not sign this MPN before reading the entire MPN, even if I am told not to read it, or told that I am not required to read it. I am entitled to an exact copy of this MPN and the Borrower’s Rights and Responsibilities 

Statement. 

24. My signature certifies that I have read, understand, and agree to the terms and conditions of this MPN, including the Borrower Request, Certifications, Authorizations, and Understandings in Section D, the terms and 

conditions described in Section F, the Notice About Subsequent Loans Made Under this MPN in Section F, and the Borrower’s Rights and Responsibilities Statement.

I UNDERSTAND THAT I MAY RECEIVE ONE OR MORE LOANS UNDER THIS MPN, AND THAT I MUST REPAY ALL LOANS THAT I RECEIVE UNDER THIS MPN.

25. Borrower’s Signature 26. Today’s Date (mm-dd-yyyy)

OMB No. 1845-0068

Form Approved

Exp. Date xx/xx/xxxx
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Direct PLUS Loan MPN (continued)

SECTION F: MPN TERMS AND CONDITIONS

GOVERNING LAW

The terms of this Application and Master Promissory 

Note (MPN) will be interpreted in accordance with the 

Higher Education Act of 1965, as amended (the HEA) 

(20 U.S.C. 1070 et seq.), the U.S. Department of 

Education’s (ED’s) regulations, any amendments to the 

HEA and the regulations in accordance with the 

effective date of those amendments, and other 

applicable federal laws and regulations (collectively 

referred to as the “Act”). 

Under applicable state law, I may have certain 

borrower rights, remedies, and defenses in addition to 

those stated in this MPN and the Borrower’s Rights 

and Responsibilities Statement, except as preempted 

by federal law.

DISCLOSURE OF LOAN TERMS

This MPN applies to Federal Direct PLUS (Direct PLUS) 

Loans. Under this MPN, the principal amount that I 

owe, and am required to repay, will be the sum of all 

disbursements that are made (unless I reduce or 

cancel any disbursements as explained below under 

Loan Cancellation), plus any unpaid interest that is 

capitalized and added to the principal amount.

I understand that each loan made under this MPN is 

separately enforceable based on a true and exact copy 

of this MPN.

At or before the time of the first disbursement of each 

loan, I will receive a disclosure statement identifying 

the amount of the loan and additional terms of the 

loan. The Borrower’s Rights and Responsibilities

Statement accompanying this MPN also contains 

important additional information. The Borrower’s 

Rights and Responsibilities Statement and any 

disclosure statement I receive in connection with any 

loan under this MPN are hereby incorporated into this 

MPN.

I may request additional loan funds to pay for my or 

the student’s educational costs by contacting the 

school’s financial aid office. The school will determine 

if I am eligible for any additional loan funds. I will be 

notified of any increase or other change in the amount 

of my loan.

I understand that ED may use a servicer to handle 

billing and other communications related to my loan.

LOAN CANCELLATION

I may pay back all or part of a loan disbursement 

within the timeframes set by the Act, as explained in 

the Borrower’s Rights and Responsibilities Statement 

and in a disclosure statement that I will receive. If I 

return the full loan amount within those timeframes, I 

will not have to pay any loan fee or interest charges. If 

I return part of a disbursement within those 

timeframes, ED will reduce the loan fee and interest 

charges in proportion to the amount returned.

INTEREST

Unless ED notifies me in writing of a lower rate, the 

interest rate for any loan I receive under this MPN is a 

fixed rate that is calculated in accordance with a 

formula specified in the Act. The interest rate for 

Direct PLUS Loans is calculated each year. When the 

rate is calculated, it applies to Direct PLUS Loans for 

which the first disbursement is made on or after July 1 

through June 30 of the following year. Different fixed 

interest rates may apply to different loans that I 

receive under this MPN, depending on when the loan 

is first disbursed. The maximum interest rate for Direct 

PLUS Loans will not exceed 10.5%. ED will notify me of 

the interest rate on each loan that I receive.

Interest accrues on the unpaid principal balance of 

each loan from the date of disbursement until the loan 

is paid in full, including during deferment, 

forbearance, or other periods. I agree to pay all 

interest charges on my loan. I will be given the 

opportunity to pay the interest that accrues during a 

period of authorized deferment or forbearance. If I do 

not pay this interest, ED may capitalize the interest 

(add it to the principal balance of my loans) at the end 

of the deferment or forbearance.

LOAN FEE

As provided by the Act, ED charges a loan fee for each 

Direct PLUS Loan that I receive under this MPN. The 

loan fee is a percentage of the loan amount and will 

be deducted proportionately from each disbursement 

of each of my loans. The specific loan fee that I am 

charged will be shown on disclosure statements that 

will be sent to me. ED may refund the loan fee only as 

permitted by the Act.

LATE CHARGES AND COLLECTION COSTS

ED may collect from me: 

• A late charge of not more than six cents for each 

dollar of each late payment if I do not make any 

part of a required installment payment within 30 

days after it becomes due, and 

• Any other charges and fees that are permitted by 

the Act related to the collection of my loans. 

If I default on my loans, I will pay reasonable collection 

costs, plus court costs and attorney fees.

REPAYMENT

I must repay the full amount of the loans made under 

this MPN, plus accrued interest. I will repay each loan 

in monthly installments during a repayment period 

that begins on the day of the final disbursement of 

that loan. Payments that I make or that someone else 

makes on my behalf will be applied first to late 

charges and collection costs that are due, then to 

interest that has not been paid, and finally to the 

principal amount of the loan, except during periods of 

repayment under the Income-Based Repayment Plan 

or the Pay As You Earn Plan, when payments will be 

applied first to interest that is due, then to fees that 

are due, and then to the principal amount.

ED will provide me with a choice of repayment plans. 

The Borrower’s Rights and Responsibilities Statement 

includes Information on these repayment plans.

ED will provide me with a repayment schedule that 

identifies my payment amounts and due dates. If I 

intent to repay my loan but am unable to make my 

scheduled loan payments, ED may grant a forbearance 

that allows me to temporarily stop making payments, 

temporarily make a smaller payment amount, or 

extend the time for making payments.

ED may adjust payment dates on my loans or may 

grant me forbearance to eliminate a delinquency that 

remains even though I am making scheduled 

installment payments.

I may prepay all or any part of the unpaid balance on 

my loans at any time without penalty. If I do not 

specify which loans I am prepaying, ED will determine 

how to apply the prepayment in accordance with the 

Act. 

After I have repaid in full a loan made under this MPN, 

ED will send me a notice telling me that I have paid off 

my loan.

ACCELERATION AND DEFAULT

At ED’s option, the entire unpaid balance of a loan 

made under this MPN will become immediately due 

and payable (this is called “acceleration”) if any one of 

the following events occurs: 

(1) I (or the student) do not enroll as at least a halftime student at the school that certified my loan 

eligibility; 

(2) I do not use the proceeds of the loan solely for 

my or the student’s educational expenses; 

(3) I make a false representation that results in my 

receiving a loan for which I am not eligible; or 

(4) I default on the loan.

The following events will constitute a default on my 

loan: 

(1) I do not pay the entire unpaid balance of the 

loan after ED has exercised its option under items 

(1), (2), and (3) above; 

(2) I do not make installment payments when due, 

and my failure to make payments has persisted for 

at least 270 days; or 

(3) I do not comply with other terms of the loan, 

and ED reasonably concludes that I no longer 

intend to honor my repayment obligation. 

If I default, ED may capitalize all outstanding interest. 

This will increase the principal balance of my loan, and 

the full amount of the loan, including the new 

principal balance and collection costs, will become 

immediately due and payable.

If I default, the default will be reported to national 

consumer reporting agencies (credit bureaus) and will 

significantly and adversely affect my credit history. I 

understand that a default will have additional adverse 

consequences to me as explained in the Borrower’s 

Rights and Responsibilities Statement. Following 

default, I may be required to repay the loan 

(potentially including amounts in excess of the 

principal and interest) under the Income-Based 

Repayment Plan or the Income-Contingent Repayment 

Plan in accordance with the Act.

LEGAL NOTICES

Any notice required to be given to me will be effective 

if it is sent by first class mail to the most recent 

address ED has for me, by electronic means to an 

address I have provided, or by any other method of 

notification that is permitted or required by applicable 

statute or regulation. I will immediately notify ED of a 

change of contact information or status as specified in 

the Borrower’s Rights and Responsibilities Statement 

under “Information you must report to us after you 

receive your loan.”

If ED does not enforce or insist on compliance with 

any term of this MPN, this does not waive any right of 

ED. No provision of this MPN may be modified or 

waived except in writing by ED. If any provision of this 

MPN is determined to be unenforceable, the 

remaining provisions will remain in force.

Information about my loans 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 

ED.

NOTICE ABOUT SUBSEQUENT LOANS MADE UNDER 

THIS MPN

This MPN authorizes ED to make multiple loans to me 

to pay my educational expenses or, if I am a parent 

borrower, the educational expenses of the student 

identified in Section C during the multi-year term of 

this MPN, upon my request and upon the school’s 

annual certification of my loan eligibility. If I have an 

adverse credit history and obtain an endorser to 

receive a Direct PLUS Loan, only one loan may be 

made under this MPN.

At schools that are authorized to use the multi-year 

feature of the MPN and choose to do so, subsequent 

loans may be made under this MPN for subsequent 

academic years. At any school, subsequent loans may 

be made under this MPN for the same academic year.

I understand that no subsequent loans will be made 

under this MPN after the earliest of the following 

dates: 

(1) The date ED or the school receives my written 

notice that no further loans may be made; 

(2) One year after the date I sign the MPN or the date 

ED receives the MPN if no disbursements are made 

under the MPN; or 

(3) Ten years after the date I sign the MPN or the date 

ED receives the MPN.
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Direct PLUS Loan MPN (continued)

SECTION G: IMPORTANT NOTICES

GRAMM-LEACH-BLILEY ACT NOTICE

In 1999, Congress enacted the Gramm-Leach-Bliley Act 

(Public Law 106-102). This Act requires that lenders 

provide certain information to their customers 

regarding the collection and use of nonpublic personal 

information. 

We disclose nonpublic personal information to third 

parties only as necessary to process and service your 

loan and as permitted by the Privacy Act of 1974. See

the Privacy Act Notice below. We do not sell or 

otherwise make available any information about you 

to any third parties for marketing purposes.

We protect the security and confidentiality of 

nonpublic personal information by implementing the 

following policies and practices. All physical access to 

the sites where nonpublic personal information is 

maintained is controlled and monitored by security 

personnel. Our computer systems offer a high degree 

of resistance to tampering and circumvention. These 

systems limit data access to our staff and contract 

staff on a “need-to-know” basis, and control individual 

users’ ability to access and alter records within the 

systems. All users of these systems are given a unique 

user ID with personal identifiers. All interactions by 

individual users with the systems are recorded.

PRIVACY ACT NOTICE

The Privacy Act of 1974 (5 U.S.C. 552a) requires that 

the following notice be provided to you: 

The authority for collecting the requested information 

from and about you is §451 et seq. of the Higher 

Education Act (HEA) of 1965, as amended (20 U.S.C. 

1087a et seq.) and the authorities for collecting and 

using your Social Security Number (SSN) are §§428B(f) 

and 484(a)(4) of the HEA (20 U.S.C. 1078-2(f) and 

1091(a)(4)) and 31 U.S.C. 7701(b). Participating in the 

William D. Ford Federal Direct Loan (Direct Loan) 

Program and giving us your SSN are voluntary, but you 

must provide the requested information, including 

your SSN, to participate.

The principal purposes for collecting the information 

on this form, including your SSN, are to verify your 

identity, to determine your eligibility to receive a loan 

or a benefit on a loan (such as a deferment, 

forbearance, discharge, or forgiveness) under the 

Direct Loan Program, to permit the servicing of your 

loan(s), and, if it becomes necessary, to locate you and 

to collect and report on your loan(s) if your loan(s) 

become delinquent or in default. We also use your 

SSN as an account identifier and to permit you to 

access your account information electronically.

The information in your file may be disclosed, on a 

case by case basis or under a computer matching 

program, to third parties as authorized under routine 

uses in the appropriate systems of records notices. 

The routine uses of this information include, but are 

not limited to, its disclosure to federal, state, or local 

agencies, to private parties such as relatives, present 

and former employers, business and personal 

associates, to consumer reporting agencies, to 

financial and educational institutions, and to guaranty 

agencies in order to verify your identity, to determine 

your eligibility to receive a loan or a benefit on a loan, 

to permit the servicing or collection of your loan(s), to 

enforce the terms of the loan(s), to investigate 

possible fraud and to verify compliance with federal 

student financial aid program regulations, or to locate 

you if you become delinquent in your loan payments 

or if you default. To provide default rate calculations, 

disclosures may be made to guaranty agencies, to 

financial and educational institutions, or to state 

agencies. To provide financial aid history information, 

disclosures may be made to educational institutions. 

To assist program administrators with tracking refunds 

and cancellations, disclosures may be made to 

guaranty agencies, to financial and educational 

institutions, or to federal or state agencies. To provide 

a standardized method for educational institutions to 

efficiently submit student enrollment status, 

disclosures may be made to guaranty agencies or to 

financial and educational institutions. To counsel you 

in repayment efforts, disclosures may be made to 

guaranty agencies, to financial and educational 

institutions, or to federal, state, or local agencies. 

In the event of litigation, we may send records to the 

Department of Justice, a court, adjudicative body, 

counsel, party, or witness if the disclosure is relevant 

and necessary to the litigation. If this information, 

either alone or with other information, indicates a 

potential violation of law, we may send it to the 

appropriate authority for action. We may send 

information to members of Congress if you ask them 

to help you with federal student aid questions. In 

circumstances involving employment complaints, 

grievances, or disciplinary actions, we may disclose 

relevant records to adjudicate or investigate the 

issues. If provided for by a collective bargaining 

agreement, we may disclose records to a labor 

organization recognized under 5 U.S.C. Chapter 71. 

Disclosures may be made to our contractors for the 

purpose of performing any programmatic function 

that requires disclosure of records. Before making any 

such disclosure, we will require the contractor to 

maintain Privacy Act safeguards. Disclosures may also 

be made to qualified researchers under Privacy Act 

safeguards.

FINANCIAL PRIVACY ACT NOTICE

Under the Right to Financial Privacy Act of 1978 (12 

U.S.C. 3401-3421), ED will have access to financial 

records in your student loan file maintained in 

compliance with the administration of the Direct Loan 

Program.

PAPERWORK REDUCTION NOTICE

According to the Paperwork Reduction Act of 1995, no 

persons are required to respond to a collection of 

information unless it displays a currently valid OMB 

control number. The valid OMB control number for 

this information collection is 1845-0068. The time 

required to complete this information collection is 

estimated to average 0.5 hours (30 minutes) per 

response, including the time to review instructions, 

search existing data sources, gather and maintain the 

data needed, and complete and review the 

information. If you have any comments concerning 

the accuracy of the time estimate(s) or suggestions 

for improving the form, please write to: U.S. 

Department of Education, Washington, DC 20202-

4537. If you have any comments or concerns 

regarding the status of your individual submission of 

this form, write directly to:

U.S. Department of Education

Common Origination and Disbursement School 

Relations Center

Attn: Applicant Services

PO Box 9002

Niagara Falls, NY 14302
Page 4 of 11

Direct PLUS Loan MPN (continued)

SECTION H: INSTRUCTIONS FOR COMPLETING THE MPN

ED will perform a credit check with a national consumer reporting agency before 

approving each loan. If you have an adverse credit history, you may not borrow a Direct 

PLUS Loan unless you:

(1) Obtain an endorser who does not have an adverse credit history, or 

(2) Document to ED’s satisfaction that there are extenuating circumstances related to 

the adverse credit history. 

An endorser is someone who agrees to repay the loan if you do not do so. If you are a 

parent borrower, the endorser may not be the student for whom you are borrowing the 

loan.

Print using a blue or black ink ballpoint pen or type. Do not use pencil. Report all dates as 

month-day-year (mm-dd-yyyy). Use only numbers. Example: June 24, 1982 = 06-24-1982.

Some of the items in Sections A and C may have been completed for you. If so, review 

these items carefully to make sure that the information is correct. 

Cross out any information that is incorrect and enter the correct information. Put your 

initials next to any information that you change.

SECTION A: BORROWER INFORMATION

IMPORTANT: Check the appropriate box to indicate whether you are a Graduate or 

Professional Student or a Parent of a Dependent Undergraduate Student before

completing the Borrower Information section.

Item 1. Enter the two-letter abbreviation for the state that issued your current driver’s 

license, followed by your driver’s license number. If you do not have a driver’s license, 

enter N/A.

Item 2. Enter your nine-digit Social Security Number.

Item 3. Enter your date of birth. 

Item 4. Enter your preferred e-mail address for receiving communications. You are not 

required to provide this information. If you do, we may use your e-mail address to 

communicate with you. If you do not have an e-mail address or do not wish to provide 

one, enter N/A.

Item 5. Enter your last name, then your first name and middle initial. Enter your 

permanent address (number, street, apartment number, or rural route number and box 

number, then city, state, zip code). If your mailing address is a post office box or general 

delivery, you must list both your street address and your mailing address. If you do not 

have a permanent street address or rural route number and box number, provide the 

physical location of your residence. A temporary school address is not acceptable. 

Item 6. Enter the area code and telephone number at which you can most easily be 

reached. (Do not list your work telephone number here.) If you do not have a 

telephone, enter N/A.

Item 7. Complete this item only if you are a parent borrower. Place a check in the box 

that corresponds to your citizenship status. If you check box (2), enter your Alien 

Registration Number.

(1) “U.S. Citizen” includes citizens of the 50 states, the District of Columbia, Puerto 

Rico, the U.S. Virgin Islands, Guam, and the Northern Mariana Islands. “National” 

includes not only all U.S. citizens, but also citizens of American Samoa and Swain’s 

Island.

(2) “Permanent Resident” means someone who can provide documentation of this 

status from the U.S. Citizenship and Immigration Services (USCIS). “Other Eligible 

Non-Citizen” includes individuals who can provide documentation from the USCIS 

that they are in the United States for a purpose that is not temporary, with the 

intention of becoming a citizen or permanent resident. This category includes 

refugees, persons granted asylum, Cuban-Haitian entrants, temporary residents 

under the Immigration Reform and Control Act of 1986, and others.

NOTE: If your citizenship status is not one of the categories described above, you 

are not eligible to receive a Direct PLUS Loan.

Item 8. Enter your employer’s name and address (street, city, state, zip code). If you are 

self-employed, enter the name and address of your business. If you are not employed, 

enter N/A.

Item 9. Enter your work area code and telephone number. If you are self-employed, 

enter the area code and telephone number of your business.

Item 10. Enter the requested information for two adults with different U.S. addresses 

who do not live with you and who have known you for at least three years. If you are a 

parent borrower, do not list the student for whom you are borrowing as a reference. 

References who live outside the United States are not acceptable. If a reference does 

not have a telephone number or e-mail address, or does not wish to provide an e-mail 

address, enter N/A. If you provide an e-mail address for a reference, ED may use it to 

communicate with the reference.

SECTION B: SCHOOL INFORMATION

This section will be completed by the school that certifies your loan eligibility.

SECTION C: DEPENDENT UNDERGRADUATE STUDENT INFORMATION

Complete this section only if you are a parent borrowing for a dependent undergraduate 

student.

Item 14. Enter the student’s last name, then first name and middle initial.

Item 15. Enter the student’s nine-digit Social Security Number.

Item 16. Enter the student’s date of birth. 

SECTION D: BORROWER REQUEST, CERTIFICATIONS, AUTHORIZATIONS, AND 

UNDERSTANDINGS

Items 17, 18, 19, and 20. Read these items carefully.

SECTION E: PROMISE TO PAY

Items 21, 22, 23, and 24. Read these items carefully.

Items 25 and 26. Sign your full legal name, in blue or black ink, and enter the date you 

signed this MPN. 

By signing this MPN, you:

(1) Acknowledge that you have read, understand, and agree to the terms and conditions 

of the MPN, including the Borrower Request, Certifications, Authorizations, and 

Understandings in Section D and the accompanying Borrower’s Rights and 

Responsibilities Statement.

(2) Agree to repay in full all loans made under this MPN according to the terms and 

conditions of the MPN.
William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower’s Rights and Responsibilities Statement

Page 5 of 11

Important Notice: This Borrower’s Rights and 

Responsibilities Statement provides additional 

information about the terms and conditions of the 

loans you receive under the accompanying Federal 

Direct PLUS Loan (Direct PLUS Loan) Application and 

Master Promissory Note (MPN). Please keep this 

Borrower’s Rights and Responsibilities Statement for 

your records. You may request another copy of this 

Borrower’s Rights and Responsibilities Statement at 

any time by contacting your servicer.

Throughout this Borrower’s Rights and Responsibilities 

Statement, the words “we,” “us,” and “our” refer to 

the U.S. Department of Education. The word “loan” 

refers to one or more loans made under the Direct 

PLUS Loan MPN.

Note to Endorser: An endorser is someone who agrees 

to repay a Direct PLUS Loan if the borrower does not 

repay the loan. If you are the endorser of a Direct PLUS 

Loan, you are not entitled to all of the same benefits as 

a Direct PLUS Loan borrower, and not all of the terms 

and conditions of a Direct PLUS Loan apply to you. 

However, you should read the entire Borrower’s Rights 

and Responsibilities Statement. We have highlighted 

important information that applies to you as an 

endorser.

1. The William D. Ford Federal Direct Loan Program.

The William D. Ford Federal Direct Loan (Direct Loan) 

Program includes the following types of loans, known 

collectively as “Direct Loans”:

• Federal Direct Stafford/Ford Loans (Direct 

Subsidized Loans)

• Federal Direct Unsubsidized Stafford/Ford Loans 

(Direct Unsubsidized Loans)

• Federal Direct PLUS Loans (Direct PLUS Loans)

• Federal Direct Consolidation Loans (Direct 

Consolidation Loans)

The Direct Loan Program is authorized by Title IV, Part 

D, of the Higher Education Act of 1965, as amended, 

20 U.S.C. 1070 et seq (HEA).

Direct Loans are made by the U.S. Department of 

Education. We contract with servicers to service, 

answer questions about, and process payments on 

Direct Loans. We will provide you with the address 

and telephone number of your servicer after the 

school notifies us that the first disbursement of your 

loan has been made.

2. Laws that apply to this MPN. The terms and 

conditions of loans made under this MPN are 

determined by the HEA and other applicable federal 

laws and regulations. These laws and regulations are 

referred to as “the Act” throughout this Borrower’s 

Rights and Responsibilities Statement. Under 

applicable state law, you may have certain borrower 

rights, remedies, and defenses in addition to those 

stated in the MPN and this Borrower’s Rights and 

Responsibilities Statement, except as preempted by 

federal law. 

NOTE: Any amendment to the Act that affects the 

terms of this MPN will be applied to your loans in 

accordance with the effective date of the 

amendment.

3. Direct PLUS Loans. Direct PLUS Loans are loans 

made to graduate or professional students or to 

parents of dependent undergraduate students to help 

pay for the cost of education beyond high school. 

(“Dependent” is defined in the Act and is different 

from the definition used by the Internal Revenue 

Service.) To be eligible for a Direct PLUS Loan:

• You must be a graduate or professional student 

or the biological or adoptive parent of the 

dependent undergraduate student for whom 

you are borrowing. If you are the spouse of the 

dependent undergraduate student’s parent, you 

may borrow a Direct PLUS Loan if your income 

and assets were reported on the Free 

Application for Federal Student Aid (FAFSA), or 

would be reported if a FAFSA were filed.

• You, and if you are a parent borrower your 

child, must be a U.S. citizen or national, a 

permanent resident of the United States, or an 

otherwise eligible non-citizen.

• You, and if you are a parent borrower your 

child, must not be in default on a federal 

education loan or owe an overpayment on a 

federal education grant, and must not have 

been convicted of, or have pled nolo contendere

(no contest) or guilty to, a crime involving fraud 

in obtaining funds under the Act.

• You must not have an adverse credit history 

(unless you meet certain other requirements –

see below).

• You, or if you are a parent borrower your child, 

must be enrolled at least half time at a school 

that participates in the Direct PLUS Loan 

Program.

We will check your credit history each time you 

request a Direct PLUS Loan. If you have an adverse 

credit history, you may not borrow a Direct PLUS Loan 

unless you:

(1) Document to our satisfaction that there are 

extenuating circumstances related to the adverse 

credit history, or 

(2) Obtain an endorser who does not have an 

adverse credit history. 

An endorser is someone who agrees to repay the 

Direct PLUS Loan if you do not do so. If you are a 

parent borrower, the endorser of a Direct PLUS Loan 

may not be the student for whom you are borrowing 

the loan.

If you are a graduate or professional student, you 

must complete a Free Application for Federal Student 

Aid (FAFSA) and your school must determine your 

eligibility for the maximum annual Direct Subsidized 

Loan and Direct Unsubsidized Loan amounts before 

you apply for a Direct PLUS Loan.

If you have questions about your eligibility for a Direct 

PLUS Loan, contact the financial aid office at the 

school you attend or are planning to attend or, if you 

are a parent borrower, the school the student attends 

or is planning to attend.

4. About the MPN. You may receive more than one 

loan under this MPN over a period of up to 10 years to 

pay for your educational costs (if you are a graduate or 

professional student borrower) or for the educational 

costs of the student identified in Section C of the MPN 

(if you are a parent borrower), as long as the school is 

authorized to use the multi-year feature of the MPN 

and chooses to do so.

If the school is not authorized to use the multi-year 

feature of the MPN or chooses not to do so, or if you 

do not want to receive more than one loan under this 

MPN, you must sign a new MPN for each loan that you 

receive. If you do not want to receive more than one 

loan under this MPN, you must notify the school or 

your servicer in writing.

If you are a parent requesting more than one Direct 

PLUS Loan to pay for the educational costs of more 

than one dependent undergraduate student, you must 

sign a separate MPN for each student. You must also 

sign separate MPNs if you are a parent borrowing on 

behalf of a dependent undergraduate student and you 

also wish to obtain a Direct PLUS Loan to pay for your 

own attendance in a graduate or professional degree 

program.

If we determine that you have an adverse credit 

history and you obtain an endorser (see Item 3, 

“Direct PLUS Loans”), you may receive only one loan 

under this MPN. If you later want to receive another 

Direct PLUS Loan, you must sign a new MPN. If you 

receive a loan under this MPN without an endorser, 

but are later determined to have an adverse credit 

history and obtain an endorser for a future Direct 

PLUS Loan, you will have to sign a new MPN for that 

loan.

5. Direct PLUS Loans and eligibility for other financial 

aid. If you borrow a Direct PLUS Loan, this may affect 

your eligibility for other financial aid. Therefore, we 

suggest that you contact the school’s financial aid 

office to determine eligibility for grants, work-study 

funds, or other forms of federal, state and private 

student aid that do not have to be repaid before you 

apply for a Direct PLUS Loan.

6. Use of your loan money. You may use the loan 

money you receive only to pay for your authorized 

educational expenses or, if you are a parent borrower, 

for the student’s authorized educational expenses for 

attendance at the school that determined you were

eligible to receive the loan. Authorized expenses 

include the following:

• Tuition

• Room

• Board

• Institutional fees

• Books

• Supplies

• Equipment

• Dependent child care expenses

• Transportation

• Commuting expenses

• Rental or purchase of a personal computer

• Loan fees

• Other documented, authorized costs

7. Information you must report to us after you 

receive your loan. You must notify your servicer 

and/or the financial aid office at the school about 

certain changes.

Until you or (if you are a parent borrower) the student 

graduate or otherwise leave school, you must notify 

the school’s financial aid office if:

• You change your address or telephone number;

• You change your name (for example, maiden name 

to married name);

• You or (if you are a parent borrower) the student --

• Do not enroll at least half time for the loan 

period certified by the school, or

• Do not enroll at the school that determined you 

were eligible to receive the loan;

• You or (if you are a parent borrower) the student 

stop attending school or drop below half-time 

enrollment;

• You or (if you are a parent borrower) the student 

transfer from one school to another school; or

• You or (if you are a parent borrower) the student 

graduate.

You must also notify your servicer if any of the above 

events occur at any time after you receive your loan. 

In addition, you must notify your servicer if you:

• Change your employer, or your employer’s 

address or telephone number changes; or

• Have any other change in status that would 

affect your loan (for example, if you receive a 

deferment while you are unemployed, but you 

find a job and therefore no longer meet the 

eligibility requirements for the deferment).

Note to Endorser: You must notify your servicer 

if you change your address, telephone number, 

name, or employer, or if your employer’s 

address or telephone number changes.

8. Amount you may borrow. For each academic year, 

you may borrow up to – but not more than – the 

amount of your estimated cost of attendance (if you 

are a graduate or professional student borrower) or 

the student’s estimated cost of attendance (if you are 

a parent borrower), minus the amount of any other 

financial aid received for that academic year. The 

school determines the cost of attendance using 

federal guidelines. It is important not to borrow more 

than you can afford to repay, even if you are eligible 

to borrow more.

9. Interest rate. The interest rate on a Direct PLUS 

Loan is a fixed rate that is calculated in accordance 

with a formula specified in the Act. The interest rate is 
William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower’s Rights and Responsibilities Statement

Page 6 of 11

calculated each year. When the rate is calculated, it 

applies to all Direct PLUS Loans for which the first 

disbursement is made on or after July 1 through June 

30 of the following year. Different fixed interest rates 

may apply to separate loans made under this MPN 

depending on when the loan is first disbursed. The 

maximum interest rate for Direct PLUS Loans will not 

exceed 10.5%. We will notify you of the interest rate 

for each loan you receive in a disclosure statement 

that we send to you.

If you qualify under the Servicemembers Civil Relief 

Act, the interest rate on your loans obtained prior to 

military service may be limited to 6% during your 

military service. To receive this benefit, you must 

contact your servicer for information about the 

documentation you must provide to show that you 

qualify.

Note to Endorser: You are eligible for the 

reduced interest rate described above based on 

the borrower’s military service or your own 

military service, but only for a Direct PLUS Loan 

for which you signed an Endorser Addendum 

prior to the earlier of the beginning date of the 

borrower’s military service or the beginning 

date of your military service.

10. Payment of interest. Except as provided below for 

borrowers who serve in the military, you are required 

to pay the interest accrues on each Direct PLUS Loan 

you receive from the date the loan is first disbursed 

until it is repaid in full, including during periods of 

deferment or forbearance.

No accrual of interest benefit for active duty service 

members

Under the no accrual of interest benefit for active duty 

service members, you are not required to pay the 

interest that accrues on any type of Direct Loan 

Program Loan first disbursed on or after October 1, 

2008 during periods of qualifying active duty military 

service (for up to 60 months). 

Interest capitalization

If you do not pay the interest as it accrues on a Direct 

PLUS Loan, as described above, we will add it to the 

unpaid principal amount of your loan. This is called 

“capitalization.” Capitalization increases the unpaid 

principal balance of your loan, and interest then 

accrues on the increased principal amount. We 

capitalize unpaid interest when you resume 

repayment after periods of deferment or forbearance. 

We may also capitalize unpaid interest that has 

accrued since the first disbursement of your loan 

when you enter repayment for the first time.

The chart that follows shows the difference in the 

total amount you would repay on a $15,000 Direct 

PLUS Loan if you pay the interest as it is charged 

during a 12-month deferment or forbearance period, 

compared to the amount you would repay if you do 

not pay the interest and it is capitalized. 

If you pay the 

interest as it 

accrues...

If you do not pay 

the interest and 

it is capitalized...

Loan Amount $15,000 $15,000

Interest for 12 

Months 

$1,575

(paid as 

accrued)

$1,575

(unpaid and 

capitalized)

Principal to be 

Repaid

$15,000 $16,575

Monthly 

Payment 

$184 $203

Number of 

Payments

120 120

Total Repaid $22,077 $24,396

The example in the chart above shows payments 

made under the Standard Repayment Plan at an 

interest rate of 10.5% (the maximum interest rate for 

a Direct PLUS Loan). In this example, you would pay 

$19 less per month and $2,319 less altogether if you 

pay the interest as it is charged during a 12-month 

deferment or forbearance period.

You may be able to claim a federal income tax 

deduction for interest payments you make on Direct 

Loans. For further information, refer to IRS Publication 

970, which is available at http://www.irs.ustreas.gov.

11. Loan fee. For each Direct PLUS Loan you receive 

under this MPN, we charge a loan fee that is a 

percentage of the principal amount of each loan. This 

fee will be subtracted proportionately from each 

disbursement of your loan. The loan fee will be shown 

on a disclosure statement that we send to you.

12. Repayment incentive programs. A repayment 

incentive is a benefit that we offer to encourage you 

to repay your loan on time. The repayment incentive 

program described below may be available to you. 

Interest Rate Reduction for Automatic Withdrawal of 

Payments

Under the automatic withdrawal option, your bank 

automatically deducts your monthly loan payment 

from your checking or savings account and sends it to 

us. Automatic withdrawal helps to ensure that your 

payments are made on time. In addition, you receive a 

0.25% interest rate reduction while you repay under 

the automatic withdrawal option. Your servicer will 

provide you with information about the automatic 

withdrawal option. You can also get the information 

on your servicer’s web site, or by calling your servicer. 

Your servicer’s web site address and toll-free 

telephone number are provided on all correspondence 

that your servicer sends you.

13. Disbursement (how your loan money will be paid 

out). Generally, the school will disburse (pay out) your 

loan money in more than one installment, usually at 

the beginning of each academic term (for example, at 

the beginning of each semester or quarter). If the 

school does not use academic terms or does not have 

academic terms that meet certain requirements, it will 

generally disburse your loan in at least two 

installments, one at the beginning of the period of 

study for which you are receiving the loan, and one at 

the midpoint of that period of study. The school 

determines the schedule for disbursing your loan 

money in accordance with the Act.

The school may disburse some or all of your loan 

money by crediting it to your account at the school (if 

you are a graduate or professional student borrower) 

or to the student’s account at the school (if you are a 

parent borrower), or may give it to you directly by 

check or other means. Your servicer will notify you in 

writing each time the school disburses part of your 

loan money.

If you are a graduate or professional student and have 

not previously received a Direct PLUS Loan or a 

Federal PLUS Loan under the Federal Family Education 

Loan (FFEL) Program, you must receive entrance 

counseling before your school can make the first 

disbursement of your loan. Your school will tell you if 

entrance counseling is required, and will provide 

instructions for completing entrance counseling.

If the school credits your loan money to your or the 

student’s account and the amount credited is more 

than the amount of the tuition and fees, room and 

board, and other authorized charges, the excess 

amount is called a credit balance.

Unless you authorize the school to hold the credit 

balance for you, the school must pay you the credit 

balance within the following timeframes:

• If the credit balance occurs after the first day of 

class of a payment period (the school can tell 

you this date), the school must pay you the 

credit balance no later than 14 days after the 

date the balance occurs.

• If the credit balance occurs on or before the first 

day of class of a payment period, the school 

must pay you the credit balance no later than 

14 days after the first day of class of the 

payment period.

If you are a parent borrower, you may authorize the 

school to pay the credit balance to the student.

14. Canceling your loan. Before your loan money is 

disbursed, you may cancel all or part of your loan at 

any time by notifying the school. After your loan 

money is disbursed, there are two ways to cancel all 

or part of your loan:

• You may notify the school (within certain 

timeframes). If the school obtains your written 

confirmation of the types and amounts of Title 

IV loans that you want to receive for an award 

year before crediting loan money to your or the 

student’s account at the school, you may tell 

the school that you want to cancel all or part of 

that loan within 14 days after the date the 

school notifies you of your right to cancel all or 

part of the loan, or by the first day of the 

school’s payment period, whichever is later (the 

school can tell you the first day of the payment 

period). 

If the school does not obtain your written 

confirmation of the types and amounts of loans 

you want to receive before crediting the loan 

money to your or the student’s account, you 

may cancel all or part of that loan by informing 

the school within 30 days of the date the school 

notifies you of your right to cancel all or part of 

the loan. 

If you ask the school to cancel all or part of your 

loan within the timeframes described above, 

the school will return the cancelled loan amount 

to us. If you ask the school to cancel all or part 

of your loan outside the timeframes described 

above, the school may process your cancellation 

request, but it is not required to do so.

• You may return all or part of your loan to us.

Within 120 days of the date the school 

disburses your loan money (by crediting the 

loan money to your or the student’s account at 

the school, by paying it directly to you, or both), 

you may cancel all or part of your loan by 

returning all or part of the loan money to us. 

Contact your servicer for guidance on how and 

where to return your loan money.

You do not have to pay interest or the loan fee on the 

part of your loan that is cancelled or returned within 

the timeframes described above. We will adjust your 

loan amount to eliminate any interest, loan fee, and 

rebate amount that applies to the amount of the loan 

that is cancelled or returned.

15. Repaying your loan. The repayment period for 

each Direct PLUS Loan made under this MPN begins 

on the date of the final disbursement for that loan. 

This means that the repayment period for each loan 

you receive under this MPN will begin on a different 

date. Unless you receive a deferment or forbearance 

(see Item 21), your first payment on each loan will be 

due within 60 days of the final disbursement of that 

loan. Your servicer will notify you of the date your 

first payment is due.

You must make payments on your loan even if you do 

not receive a bill or repayment notice. 

You must repay all of your Direct Loans under the 

same repayment plan, unless you want to repay your 

loans under the Income-Based Repayment (IBR), the 

Pay As You Earn, or the Income Contingent Repayment 

(ICR) plan and you have other types of Direct Loans 

that may not be repaid under those plans. In that case, 

you may select the IBR, Pay As You Earn, or ICR plan 

for the loans that are eligible for repayment under 

those plans, and may select a different repayment 

plan for the loans that may not be repaid under IBR, 

Pay As You Earn, or ICR.

You may choose one of the following repayment plans 

to repay your Direct PLUS Loan:

Standard Repayment Plan

Under this plan, you will make fixed monthly 

payments and repay your loan in full within 10 years 

(not including periods of deferment or forbearance) 

from the date the loan entered repayment. Your 

payments must be at least $50 a month ($600 a year) 
William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower’s Rights and Responsibilities Statement

Page 7 of 11

and will be more, if necessary, to repay the loan within 

the required time period.

Graduated Repayment Plan

Under this plan, you will usually make lower payments 

at first, and your payments will gradually increase over 

time. You will repay your loan in full within 10 years 

(not including periods of deferment or forbearance) 

from the date the loan entered repayment. No single 

payment will be more than three times greater than 

any other payment. 

Extended Repayment Plan

You are eligible for this plan only if (1) you have an 

outstanding balance on Direct Loan Program loans 

that exceeds $30,000, and (2) you had no outstanding 

balance on a Direct Loan Program loan as of October 

7, 1998 or on the date you obtained a Direct Loan 

Program loan after October 7, 1998.

Under this plan, you will repay your loan in full over a 

period not to exceed 25 years (not including periods of 

deferment or forbearance) from the date the loan 

entered repayment. You may choose to make fixed 

monthly payments or graduated monthly payments 

that start out lower and gradually increase over time. 

Your payments must be at least $50 a month ($600 a 

year) and will be more, if necessary, to repay the loan 

within the required time period. 

The following additional repayment plans are available 

to graduate and professional student Direct PLUS Loan 

borrowers (parent Direct PLUS Loan borrowers may 

not repay their loans under these plans):

Income-Based Repayment (IBR) Plan

Under the IBR Plan, your monthly payment amount is 

generally 15% of your annual discretionary income, 

divided by 12. Discretionary income for this plan is the 

difference between your adjusted gross income and 

150% of the poverty guideline amount for your state 

of residence and family size. If you are married and file 

a joint federal income tax return, the income used to 

determine your IBR Plan payment amount will be the 

combined adjusted gross income of you and your 

spouse. 

To initially qualify for the IBR Plan and to continue to 

make payments that are based on your income, the 

amount you would be required to pay on your eligible 

student loans under the IBR Plan (as described above) 

must be less than the amount you would have to pay 

under the Standard Repayment Plan. If your IBR Plan 

payment amount is less than the amount you would 

have to pay under the Standard Repayment Plan, you 

are considered to have a “partial financial hardship.” 

If you are married and file a joint federal income tax 

return, the loan amount we use to determine whether 

you have a partial financial hardship will include your 

eligible loans and your spouse’s eligible loans. 

While you are repaying under the IBR Plan, you must 

annually provide documentation of your income and 

certify your family size so that we may determine 

whether you continue to have a partial financial 

hardship. Your monthly payment amount may be 

adjusted annually based on the updated income and 

family size information that you provide. If we 

determine that you no longer have a partial financial 

hardship, you may remain on the IBR Plan, but your 

monthly payment will no longer be based on your 

income. Instead, your monthly payment will be what 

you would be required to pay under the Standard 

Repayment Plan, based on the amount you owed on 

your eligible loans at the time you entered the IBR 

Plan. 

Under the IBR Plan, if your loan is not repaid in full 

after you have made the equivalent of 25 years of 

qualifying monthly payments and at least 25 years 

have elapsed, any remaining loan amount will be 

forgiven. You may have to pay federal income tax on 

the loan amount that is forgiven.

Pay As You Earn Plan

Under the Pay As You Earn Plan, your monthly 

payment amount is generally 10% of your annual 

discretionary income, divided by 12. Discretionary 

income for this plan is the difference between your 

adjusted gross income and 150% of the poverty 

guideline amount for your state of residence and 

family size. If you are married and file a joint federal 

income tax return, the income used to determine your 

Pay As You Earn Plan payment amount will be the 

combined adjusted gross income of you and your 

spouse.

The Pay As You Earn Plan is available only to new 

borrowers. You are a new borrower for the Pay As You 

Earn Plan if:

(1) You had no outstanding balance on a Direct 

Loan Program or FFEL Program loan as of October 

1, 2007, or you have no outstanding balance on a 

Direct Loan Program or FFEL Program loan when 

you obtain a new loan on or after October 1, 2007, 

and

(2) You receive a disbursement of a Direct 

Subsidized Loan, Direct Unsubsidized Loan, or 

student Direct PLUS Loan (a Direct PLUS Loan made 

to a graduate or professional student) on or after 

October 1, 2011, or you receive a Direct 

Consolidation Loan based on an application 

received on or after October 1, 2011. However, you 

are not considered to be a new borrower for the 

Pay As You Earn Plan if the Direct Consolidation 

Loan you receive repays loans that would make you 

ineligible under part (1) of this definition. 

In addition to being a new borrower, to initially qualify

for the Pay As You Earn Plan and to continue to make 

payments that are based on your income, the amount 

you would be required to pay on your eligible student 

loans under the Pay As You Earn Plan (as described 

above) must be less than the amount you would have 

to pay under the Standard Repayment Plan. If your 

Pay As You Earn Plan payment amount is less than the 

amount you would have to pay under the Standard 

Repayment Plan, you are considered to have a “partial 

financial hardship.” 

If you are married and file a joint federal income tax 

return, the loan amount we use to determine whether 

you have a partial financial hardship will include your 

eligible loans and your spouse’s eligible loans.

While you are repaying under the Pay As You Earn 

Plan, you must annually provide documentation of 

your income and certify your family size so that we 

may determine whether you continue to have a partial 

financial hardship. Your monthly payment amount 

may be adjusted annually based on the updated 

income and family size information that you provide. If 

we determine that you no longer have a partial 

financial hardship, you may remain on the Pay As You 

Earn Plan, but your monthly payment will no longer be 

based on your income. Instead, your monthly payment 

will be what you would be required to pay under the 

Standard Repayment Plan, based on the amount you 

owed on your eligible loans at the time you entered 

the IBR Plan.

Under the Pay As You Earn Plan, if your loan is not 

repaid in full after you have made the equivalent of 20 

years of qualifying monthly payments and at least 20 

years have elapsed, any remaining loan amount will be 

forgiven. You may have to pay federal income tax on 

the loan amount that is forgiven.

Income Contingent Repayment (ICR) Plan

Under this plan, your monthly payment amount will 

be either 20% of your discretionary income or a 

percentage of what you would repay under a Standard 

Repayment Plan with a 12-year repayment period, 

whichever is less. Discretionary income for this plan is 

the difference between your adjusted gross income 

and the poverty guideline amount for your state of 

residence and family size. If you are married and file a 

joint federal income tax return, the income used to 

determine your ICR Plan payment amount will be the 

combined adjusted gross income of you and your 

spouse. Until we obtain the information needed to 

calculate your monthly payment amount, your 

payment will equal the amount of interest that 

accrues monthly on your loan unless you request a 

forbearance. 

While you are repaying under the ICR Plan, you must 

annually provide documentation of your income and 

certify your family size. Your monthly payment 

amount may be adjusted annually based on the 

updated income and family size information that you 

provide.

Under the ICR Plan, if your loan is not repaid in full 

after you have made the equivalent of 25 years of 

qualifying monthly payments and at least 25 years 

have elapsed, any remaining loan amount will be 

forgiven. You may have to pay federal income tax on 

the loan amount that is forgiven.

Additional repayment plan information

If you are a graduate or professional student, these 

repayment plans will be explained in more detail 

during your exit counseling session.

Under each plan, the number or amount of payments 

may need to be adjusted to reflect capitalized interest 

and/or new loans made to you. 

If you can show to our satisfaction that the terms and 

conditions of the above repayment plans are not 

adequate to meet your exceptional circumstances, we 

may provide you with an alternative repayment plan.

If you do not choose a repayment plan, we will place 

you on the Standard Repayment Plan.

You may change repayment plans at any time after 

you have begun repaying your loan. However, you 

may not change to a different repayment plan that has 

a maximum repayment period of less than the number 

of years your loan has already been in repayment, 

except that you may change to the IBR Plan, the Pay 

As You Earn Plan, or the ICR Plan at any time. There is 

no penalty if you make loan payments before they are 

due, or pay more than the amount due each month.

Note to Endorser: If you are making payments 

on the borrower’s Direct PLUS Loan, you may 

request a change of repayment plans by 

contacting your servicer.

We apply your payments and prepayments made 

under any repayment plan other than the IBR Plan and 

the Pay As You Earn Plan in the following order: (1)

late charges and collection costs, (2) outstanding 

interest, and (3) outstanding principal. 

We apply your payments and prepayments made 

under the IBR Plan or the Pay As You Earn Plan in the 

following order: (1) interest, (2) late fees and 

collection costs, and (3) outstanding principal.

When you have repaid a loan in full, your servicer will 

send you a notice telling you that you have paid off 

your loan. You should keep this notice in a safe place.

16. Transfer of loan. We may transfer one or all of 

your loans to another servicer without your consent. If 

the address to which you must send payments or 

direct communications changes, we will notify you of 

the new servicer’s name, address and telephone 

number, the effective date of the transfer, and the 

date when you must begin sending payments or 

directing communications to that servicer. Transfer of 

a loan to a different servicer does not affect your 

rights and responsibilities under that loan. 

17. Late charges and collection costs. If you do not 

make any part of a payment within 30 days after it is 

due, we may require you to pay a late charge. This 

charge will not be more than six cents for each dollar 

of each late payment. If you do not make payments as 

scheduled, we may also require you to pay other 

charges and fees involved in collecting your loan.

18. Demand for immediate repayment. The entire 

unpaid amount of your loan becomes due and payable 

(this is called “acceleration”) if you:

• Receive loan money, but you or the student for 

whom you obtained the loan do not enroll at 

least half time at the school that determined 

you were eligible to receive the loan;

• Use your loan money to pay for anything other 

than expenses related to your or the student’s 
William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower’s Rights and Responsibilities Statement

Page 8 of 11

education at the school that determined you 

were eligible to receive the loan;

• Make a false statement that causes you to 

receive a loan that you are not eligible to 

receive; or

• Default on your loan.

19. Defaulting on your loan. Default (failing to repay 

your loan) is defined in detail in the Terms and 

Conditions section of your MPN (Section F). If you 

default:

• We will require you to immediately repay the 

entire unpaid amount of your loan.

• We may sue you, take all or part of your federal 

tax refund or other federal payments, and/or 

garnish your wages so that your employer is 

required to send us part of your salary to pay off 

your loan.

• We will require you to pay reasonable collection 

fees and costs, plus court costs and attorney 

fees.

• You will lose eligibility for other federal student 

aid and assistance under most federal benefit 

programs.

• You will lose eligibility for loan deferments.

Note to Endorser: If the borrower defaults on 

the loan, and you do not make payments on the 

loan, you may also be subject to the actions 

described above.

• We will also report your default to national 

consumer reporting agencies (see Item 20, 

“Consumer reporting agency notification”). This 

will harm your credit history and may make it 

difficult for you to obtain credit cards, home or 

car loans, or other forms of consumer credit.

20. Consumer reporting agency notification. We will 

report information about your loan to national 

consumer reporting agencies (commonly known as 

“credit bureaus”) on a regular basis. This information 

will include the disbursement dates, amount, and 

repayment status of your loan (for example, whether 

you are current or delinquent in making payments). 

Your loan will be identified as an education loan.

If you default on a loan, we will also report this to 

national consumer reporting agencies. We will notify 

you at least 30 days in advance that we plan to report 

default information to a consumer reporting agency 

unless you resume making payments on the loan 

within 30 days of the date of the notice. You will be 

given a chance to ask for a review of the debt before 

we report it.

If a consumer reporting agency contacts us regarding 

objections you have raised about the accuracy or 

completeness of any information we have reported, 

we are required to provide the agency with a prompt 

response.

Note to Endorser: If the borrower of a Direct 

PLUS Loan becomes delinquent in making 

payments or defaults on the loan, we may also 

report your name to consumer reporting 

agencies in connection with the delinquent or 

defaulted loan.

21. Deferment and forbearance (postponing 

payments).

If you meet certain requirements, you may receive a 

deferment that allows you to temporarily stop making 

payments on your loan. If you cannot make your 

scheduled loan payments, but do not qualify for a 

deferment, we may give you a forbearance. A 

forbearance allows you to temporarily stop making 

payments on your loan, temporarily make smaller 

payments, or extend the time for making payments.

Deferment

You may receive a deferment:

• While you are enrolled at least half time at an 

eligible school;

• During the 6-month period after you cease to be 

enrolled at least half time;

• While the student for whom you obtained a 

Direct PLUS Loan is enrolled at least half time at 

an eligible school;

• During the 6-month period after the student for 

whom you obtained a loan ceases to be enrolled 

at least half time;

• While you are in a full-time course of study in a 

graduate fellowship program;

• While you are in an approved full-time 

rehabilitation program for individuals with 

disabilities;

• While you are unemployed (for a maximum of 

three years; you must be diligently seeking, but 

unable to find, full-time employment); 

• While you are experiencing an economic 

hardship (including Peace Corps service), as 

defined in the Act (for a maximum of three 

years); 

• While you are serving on active duty during a 

war or other military operation or national 

emergency or performing qualifying National 

Guard duty during a war or other military 

operation or national emergency and, if you 

were serving on or after October 1, 2007, for an 

additional 180-day period following the 

demobilization date for your qualifying service; 

or

• If you are a member of the National Guard or 

other reserve component of the U.S. Armed 

forces (current or retired) and you are called or 

ordered to active duty while you are enrolled at 

least half time at an eligible school or within 6 

months of having been enrolled at least half 

time, during the 13 months following the 

conclusion of your active duty service, or until 

you return to enrolled student status on at least 

a half-time basis, whichever is earlier.

You may be eligible to receive additional deferments 

if, at the time you received your first Direct Loan, you 

had an outstanding balance on a loan made under the 

FFEL Program before July 1, 1993. If you meet this 

requirement, contact your servicer for information 

about additional deferments that may be available.

You may receive a deferment while you are enrolled in 

school on at least a half-time basis (and, if you are a 

graduate or professional student, during the 6-month 

period after you cease to be enrolled at least half 

time) if (1) you submit a deferment request form to 

your servicer along with documentation of your 

eligibility for the deferment, or (2) your servicer 

receives information from the school you are 

attending that indicates you are enrolled at least half 

time. If your servicer processes a deferment based on 

information received from your school, you will be 

notified of the deferment and will have the option of 

canceling the deferment and continuing to make 

payments on your loan. 

For all other deferments, you (or, for a deferment 

based on active military duty or qualifying National 

Guard duty during a war or other military operation or 

national emergency, your representative) must submit 

a deferment request form to your servicer, along with 

documentation of your eligibility for the deferment. In 

certain circumstances, you may not be required to 

provide documentation of your eligibility if your 

servicer confirms that you have been granted the 

same deferment for the same time period on a FFEL 

Program loan. Your servicer can provide you with a 

deferment request form that explains the eligibility 

and documentation requirements for the type of

deferment you are requesting. You may also obtain 

deferment request forms and information on 

deferment eligibility requirements from your 

servicer’s web site. 

If you are in default on your loan, you are not eligible 

for a deferment.

You are responsible for paying the interest on a Direct 

PLUS Loan during a period of deferment.

Note to Endorser: You are not eligible to receive 

a deferment.

Forbearance

We may give you a forbearance if you are temporarily 

unable to make your scheduled loan payments for 

reasons including, but not limited to, financial 

hardship and illness.

We will give you a forbearance if:

• You are serving in a medical or dental internship 

or residency program, and you meet specific 

requirements; 

• The total amount you owe each month for all of 

the student loans you received under Title IV of 

the Act (Direct Loan Program loans, FFEL 

Program loans, and Federal Perkins Loans) is 

20% or more of your total monthly gross income 

(for a maximum of three years);

• You are serving in a national service position for 

which you receive a national service award 

under the National and Community Service 

Trust Act of 1993. In some cases, the interest 

that accrues on a qualified loan during the 

service period will be paid by the Corporation 

for National and Community Service;

• You qualify for partial repayment of your loans 

under the Student Loan Repayment Program, as 

administered by the Department of Defense; or

• You are called to active duty in the U.S. Armed 

Forces.

To request a forbearance, contact your servicer. Your 

servicer can provide you with a forbearance request 

form that explains the eligibility and documentation 

requirements for the type of forbearance you are 

requesting. You may also obtain forbearance request 

forms and information on forbearance eligibility 

requirements from your servicer’s web site.

Under certain circumstances, we may also give you a 

forbearance without requiring you to submit a request 

or documentation. These circumstances include, but 

are not limited to, the following:

• Periods necessary for us to determine your 

eligibility for a loan discharge;

• A period of up to 60 days in order for us to 

collect and process documentation related to 

your request for a deferment, forbearance, 

change in repayment plan, or consolidation loan 

(we do not capitalize the interest that is charged 

during this period); 

• Periods when you are involved in a military 

mobilization, or a local or national emergency; 

or

• Periods necessary to align repayment of Direct 

PLUS Loans that do not qualify for a 6-month 

post-enrollment deferment with other Direct 

PLUS Loans that qualify for this deferment, or 

with Direct Subsidized Loans and Direct 

Unsubsidized Loans that have a grace period. 

Contact your servicer for more information. 

You are responsible for paying the interest on a Direct 

PLUS Loan during a period of forbearance.

Note to Endorser: Although you are not eligible 

to receive a deferment, you may receive a 

forbearance.

22. Discharge (having your loan forgiven). We will 

discharge (forgive) your loan under certain 

circumstances.

Loan discharge due to death, bankruptcy, total and 

permanent disability, school closure, false 

certification, identity theft, or unpaid refund

• You die, or the student for whom you borrowed 

a Direct PLUS Loan dies. Your servicer must 

receive acceptable documentation of your or 

the student’s death.

• Your loan is discharged in bankruptcy. 

However, Direct Loans and other federal 

student loans are not automatically discharged 

if you file for bankruptcy. In order to have your 

loan discharged in bankruptcy, you must prove 

to the bankruptcy court that repaying the loan 

would cause undue hardship.
William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower’s Rights and Responsibilities Statement

Page 9 of 11

• You become totally and permanently disabled 

(as defined in the Act) and meet certain other 

requirements.

In certain cases, we may also discharge all or a portion 

of your loan if:

• You (or the student) could not complete a 

program of study because the school closed;

• Your loan eligibility was falsely certified by the 

school;

• A loan in your name was falsely certified as a 

result of a crime of identity theft; or

• The school did not pay a refund of your loan 

money that it was required to pay under federal 

regulations.

Public Service Loan Forgiveness

A public service loan forgiveness program is also 

available. Under this program, we will forgive the 

remaining balance due on your eligible Direct Loan 

Program loans after you have made 120 payments on 

those loans (after October 1, 2007) under certain 

repayment plans while you are employed full-time in 

certain public service jobs.

Additional loan discharge information

The Act may provide for certain loan forgiveness or 

repayment benefits on your loans in addition to the 

benefits described above. If other forgiveness or 

repayment options become available, your servicer 

will provide information about these benefits.

To request loan discharge or forgiveness based on one 

of the conditions described above (except for 

discharges due to death or bankruptcy), you must 

complete an application that you may obtain from 

your servicer.

In some cases you may assert, as a defense against 

collection of your loan, that the school did something 

wrong or failed to do something that it should have 

done. You can make such a defense against 

repayment only if the school’s act or omission directly 

relates to your loan or to the educational services that 

the loan was intended to pay for, and if what the 

school did or did not do would give rise to a legal 

cause of action against the school under applicable 

state law. If you believe that you have a defense 

against repayment of your loan, contact your servicer.

We do not guarantee the quality of the academic 

programs provided by schools that participate in 

federal student financial aid programs. You must 

repay your loan even if you or (if you are a parent 

borrower) the student do not complete the education 

paid for with the loan, are unable to obtain 

employment in the field of study for which the school 

provided training, or are dissatisfied with, or do not 

receive, the education paid for with the loan.

Note to Endorser: If we discharge the full 

amount of the borrower’s loan for any of the 

conditions described above, you are no longer 

obligated to make any payments on the loan. 

However, if a loan is reinstated after a 

discharge, you will again be obligated to make 

payments on the loan if the borrower does not 

make payments. 

23. Loan consolidation. A Direct Consolidation Loan 

Program is available that allows you to consolidate 

one or more of your eligible federal education loans 

into a new loan with a single monthly payment, and 

may allow you to extend the period of time that you 

have to repay your loans. This may make it easier for 

you to repay your loans. However, you will pay more 

interest if you extend your repayment period through 

consolidation, since you will be making payments for a 

longer period of time. Contact your servicer for more 

information about loan consolidation.

Note to Endorser: You are not eligible to apply 

for a Direct Consolidation Loan to repay a Direct 

PLUS Loan for which you are the endorser.

24. Department of Defense and other federal agency 

loan repayment. Under certain circumstances, 

military personnel may have their federal education 

loans repaid by the Secretary of Defense. This benefit 

is offered as part of a recruitment program that does 

not apply to individuals based on their previous 

military service or to those who are not eligible for 

enlistment in the U.S. Armed Forces. For more 

information, contact your local military service 

recruitment office.

Other agencies of the federal government may also 

offer student loan repayment programs as an 

incentive to recruit and retain employees. Contact the 

agency’s human resources department for more 

information.
William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower’s Rights and Responsibilities Statement

Page 10 of 11

Repaying Your Loans: Standard, Graduated, and Extended Repayment Plans

Debt

Standard Repayment Plan

(10-year repayment period)

Graduated Repayment Plan

(10-year repayment period)

Extended-Fixed Repayment Plan

(25-year repayment period)

Extended-Graduated Repayment Plan

(25-year repayment period)

Payment Total Paid Minimum Payment Maximum Payment Total Paid Payment Total Paid Minimum Payment Maximum Payment Total Paid

$10,000 $135 $16,192 $88 $227 $17,865 N/A N/A N/A N/A N/A

$20,000 $270 $32,384 $175 $453 $35,731 N/A N/A N/A N/A N/A

$30,000 $405 $48,577 $263 $680 $53,597 N/A N/A N/A N/A N/A

$40,000 $540 $64,769 $350 $906 $71,463 $378 $113,302 $350 $457 $119,720

$50,000 $675 $80,961 $438 $1,133 $89,329 $472 $141,627 $438 $571 $149,662

$60,000 $810 $97,153 $525 $1,359 $107,195 $567 $169,953 $525 $686 $179,585

$70,000 $945 $113,345 $613 $1,586 $125,061 $661 $198,278 $613 $800 $209,518

$80,000 $1,079 $129,538 $700 $1,812 $142,927 $755 $226,604 $700 $914 $239,457

$90,000 $1,214 $145,730 $788 $2,039 $160,793 $850 $254,929 $788 $1,028 $269,396

$100,000 $1,349 $161,922 $875 $2,265 $178,658 $944 $283,255 $875 $1,143 $299,328

Notes:

• All estimated payments shown in the chart above are calculated using a fixed interest rate of 10.5%, the maximum interest rate for Direct PLUS Loans.

• For the Extended Repayment Plan, an entry of “N/A” means that you are not eligible for this plan based on the loan amount owed.

• You may use the Repayment Estimator at StudentLoans.gov to estimate payment amounts based on your actual loan debt.

Repaying Your Loans: IBR, Pay As You Earn, and ICR Plans

Income-Based Repayment (IBR) Plan

Debt

Starting income of $25,000 Starting income of $40,000 Starting income of $60,000

Initial Payment Final Payment Total Paid Time to Repay 

(Months) Initial Payment Final Payment Total Paid Time to Repay (Months) Initial Payment Final Payment Total Paid Time to Repay (Months)

$20,000 $97 $270 $63,753 299 N/A N/A N/A N/A N/A N/A N/A N/A

$40,000 $97 $538 $80,919 300 $285 $540 $100,466 223 $535 $540 $64,875 121

$60,000 $97 $538 $80,919 300 $285 $810 $174,605 300 $535 $810 $122,145 170

$80,000 $97 $538 $80,919 300 $285 $1,079 $187,524 300 $535 $1,079 $221,369 252

$100,000 $97 $538 $80,919 300 $285 $1,143 $188,307 300 $535 $1,349 $304,342 300
William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower’s Rights and Responsibilities Statement

Page 11 of 11

Pay As You Earn Plan

Debt

Starting income of $25,000 Starting income of $40,000 Starting income of $60,000

Initial Payment Final Payment Total Paid Time to Repay 

(Months) Initial Payment Final Payment Total Paid Time to Repay (Months) Initial Payment Final Payment Total Paid Time to Repay (Months)

$20,000 $65 $260 $34,914 240 $190 $270 $38,069 154 N/A N/A N/A N/A

$40,000 $65 $260 $34,914 240 $190 $540 $84,019 240 $356 $540 $81,429 170

$60,000 $65 $260 $34,914 240 $190 $576 $84,514 240 $356 $810 $145,233 240

$80,000 $65 $260 $34,914 240 $190 $576 $84,514 240 $356 $997 $150,647 240

$100,000 $65 $260 $34,914 240 $190 $576 $84,514 240 $356 $997 $150,647 240

Income-Contingent Repayment (ICR) Plan

Debt

Starting income of $25,000 Starting income of $40,000 Starting income of $60,000

Initial Payment Final Payment Total Paid Time to Repay 

(Months) Initial Payment Final Payment Total Paid Time to Repay (Months) Initial Payment Final Payment Total Paid Time to Repay (Months)

$20,000 $168 $231 $59,894 300 $215 $245 $39,287 173 $245 $271 $34,295 133

$40,000 $225 $504 $120,218 300 $430 $490 $78,574 173 $490 $542 $68,589 133

$60,000 $225 $926 $151,474 300 $475 $786 $145,976 220 $734 $813 $102,884 133

$80,000 $225 $926 $151,474 300 $475 $1,225 $267,378 300 $809 $1,100 $147,913 148

$100,000 $225 $926 $151,474 300 $475 $1,559 $290,626 300 $809 $1,451 $227,523 194

Notes:

• For the IBR Plan, the Pay As You Earn Plan, and the ICR Plan, the estimated payment amounts shown in the charts above are calculated based on an assumption that you are single (not married), do not have any children or anyone else in your 

household, and that your income will increase at a rate of 5% per year. In addition, the calculations use a fixed interest rate of 10.5% (the maximum interest rate for Direct PLUS Loans) and assume that the Poverty Guidelines (calculated annually by 

the US Department of Health and Human Services) will increase at an annual rate of 3.3%.

• For the IBR Plan and the Pay As You Earn Plan, an entry of “N/A” means that you would not have a partial financial hardship based on the loan debt and starting income shown and therefore would not be eligible to initially select the plan.

• You may use the Repayment Estimator at StudentLoans.gov to evaluate your eligibility for the IBR and Pay As You Earn plans, and to estimate your payment amounts under the IBR, Pay As You Earn, and ICR plans based on your actual loan debt, 

income, and family size.