Federal Direct PLUS Loans NYSFAAA Region VII Nautochia Webb May 15, 2015

Federal Direct PLUS Loans What is it? Who qualifies for PLUS? Application and MPN process Direct PLUS Loans Who qualifies?  Parents may borrow on behalf of their dependent, undergraduate children. These are Federal Direct PLUS loans for parents. A parent is a biological or adoptive parent or a person that the state has determined to be a parent.  Graduate and Professional level students. These are Federal Direct PLUS loans for graduate or professional students. PLUS is limited by two factors:  The COA - EFA of the student (if PLUS for parents) or student borrower (if PLUS for graduate or professional student)  The result of the credit check

Federal Direct Loans Subsidized Stafford Only for undergraduates Unsubsidized Stafford For undergraduates, graduates and professional students PLUS Loan for Parents (unsubsidized) For parents of dependent students PLUS Loan for Graduate and Professional Students (unsubsidized)

Federal Direct PLUS Loans Who qualifies? Federal Direct PLUS loans for parents - a parent is a biological or adoptive parent or a person that the state has determined to be a parent. Federal Direct PLUS loans for graduate or professional students.

PLUS Policy and Procedure Considerations The COA - EFA of the student (if PLUS for parents) or student borrower (if PLUS for graduate or professional student) Paper MPN vs. eMPN ( new version 8/4/14) PLUS setup in COD (School Participation Options) PLUS Credit Check Processing Failed credit check process Awarding additional unsubsidized loan process

A graduate/professional student borrower or parent borrower must complete and sign a Direct PLUS Loan MPN before a school can make the first disbursement of a Direct PLUS Loan. Parent borrowers must complete and sign a separate MPN for each dependent student for whom they are borrowing. 6 Direct PLUS Loan MPN

Federal Direct PLUS Loans Request A school may establish a school-specific process for obtaining Direct PLUS Loan information or it may direct its PLUS borrowers to complete the Federal Direct PLUS Request for Supplemental Information (Direct PLUS Loan Request) via the StudentLoans.gov website. 7

A credit check is performed during the Direct PLUS Loan Request process. (COD will deny a PLUS loan request for a borrower with adverse credit.) After completing the Direct PLUS Loan Request, borrowers are given the opportunity to complete the Direct PLUS Loan MPN. Parent borrowers may indicate to whom any PLUS Loan credit balance should be given. 8 Federal Direct PLUS Loan Request

Federal Direct PLUS Loans COD sends PLUS credit decision results to your school in an electronic file called the PLUS Application Acknowledgement (message class CRSP15OP). 9

Federal Direct PLUS Loans A = Appeal Decision E = Pursue Endorser N = Not Pursue PLUS Loan (Process Additional Unsubsidized Loan if Eligible) U = Undecided R = Appeal Closed Without Final Decision More details about the PLUS credit process is available in Volume II, Section 1 of the COD Technical Reference. 10

PLUS Updates - EDExpress EDExpress Release 2.0 new Credit Status Response redesigned Credit/PLUS App Info sub-tab for PLUS and Grad PLUS records new data edits for actual disbursements that check the current Credit Requirements Met value. For more information, see the EDExpress , Release 2.0 Cover Letter, available on the FSAdownload Web site. 11

The school decides the process to be used for PLUS loan promissory notes. For more information about each of the PLUS MPN setup options, see Volume II, Section 1 of the 2015–16 COD Technical Reference at: 6CODTechRefVol2Sec1ImpGuide.pdf 12 COD Setup Options for PLUS MPN

Increased Unsubsidized Loan Limits For dependent undergraduates whose parents are unable to obtain PLUS loans Due to adverse credit or Due to exceptional circumstances Student may receive additional unsubsidized loans in the same amounts as independent undergraduate limits Eligibility extends for one academic year

Entrance Counseling When is it required? Who must complete it? Conducting Entrance Counseling What must be discussed? Using StudentLoans.gov Policy considerations - how will you conduct Entrance Counseling? In Person Audio Visual Online

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Loan Proration Prorated loan limits are then used in the awarding process to determine student eligibility Proration is NOT required for PLUS loans PLUS loans Graduate students Teacher certification Preparatory coursework

PLUS Updates Gen sequester required changes to loan fees in the Direct Loan Program where the first disbursement is on or after October 1,

PLUS Updates - Fees 18 Direct Loan Fees for FY 2015 and FY 2016 Loan TypeImpacted Loans Loan Fee Percent Fee Example Direct PLUS Loans (Parent and Grad/Prof Student FY 2015 First disbursed on or after October 1, 2014 and before October 1, $ on a $10,000 loan FY 2016 First disbursed on or after October 1, 2015 and before October 1, $ on a $10,000 loan

PLUS Updates - Fees Direct Loan Fees for FY 2015 and FY 2016 Loan TypeImpacted Loans Loan Fee Percent Fee Example Direct Subsidized Loans and Direct Unsubsidized Loans FY 2015 First disbursed on or after October 1, 2014 and before October 1, $59.01 on a $5,500 loan FY 2016 First disbursed on or after October 1, 2015 and before October 1, $58.74 on a $5,500 loan 19

PLUS Updates – Credit Check Electronic Announcement February 27, System Changes for the Determination of Adverse Credit History and the Duration of a Credit Check (from 90 Days to 180 Days) to be Implemented March 27-29,

Processing Award Data CAVEAT - a school can decline to originate, or originate a lesser loan amount than requested, on a case-by-case basis You MUST document the reason You cannot do so on an across-the-board basis 34 CFR

Resources Federal Student Aid Handbook Volume 3, Chapter 7, Volume 3, Chapter 5, Volume 4, Chapter 1 Dear Colleague Letters Gen Federal Regulations—34 CFR Borrower Eligibility (b)Direct PLUS (c)(1)(vii)(B) and (C)Adverse Credit History (c)(1)(ii) and (iii)Additional Unsubsidized Other Ordering Direct Loan Materials: 22