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You must choose the amount you want to borrow, and you do not have to borrow the maximum amount.. Cost of BorrowingIn addition to interest, you will pay 4 percent of the loan proceeds to the U.S. Department of Education as a loan origination fee. This fee will reduce the amount of loan money disbursed. Interest RateParent loans with a first disbursement on or after July 1, 2006 have a fixed interest rate of 7.90 percent. Loans made prior to that date have a variable interest rate that may change each year on July 1 and that will never be more than 9 percent. Graduate students who borrow from the Direct PLUS program on or after July 1, 2006 will have a fixed interest rate of 7.90 percent. Promissory NoteBorrowing from the PLUS Loan program requires the completion of an Electronic Master Promissory Note (e-MPN). You can use the e-MPN to make one or more loans for one or more academic years while the student for whom you are borrowing is enrolled at Towson University. DisbursementThe Bursar’s Office will credit loan proceeds to the student’s account to pay tuition and other university charges. Remaining funds go to you, or with your permission, directly to the student. RepaymentThe repayment period for principal and interest begins the day after the loan has been fully disbursed. For example, a loan covering the fall and spring terms will enter repayment after the disbursement for the spring term. The first payment becomes due within 60 days after the final loan disbursement of loan proceeds for an academic year. You will have three repayment options:
NOTE: You can prepay all or a portion of your loan at any time without penalty. Additional Information on BorrowingYou can estimate your monthly payments with various repayment plans with the repayment calculators available online from the U.S. Department of Education’s Direct Loan Web site at http://www.ed.gov/DirectLoan.
For more information on the cost of borrowing or repayment, call the Federal Student Aid Information Center at 1-800-4FEDAID (1-800-433-3243). Postponements of PaymentsYou may defer payments if you meet one of several conditions show in the U.S. Department of Education's Loan Deferment Summary table. You may be eligible for additional deferments if, at the time you obtain a Direct Loan, you have an outstanding balance on a loan from the Federal Family Education Loan Program (FFELP), including any Federal Stafford Loan, Guaranteed Student Loan, Federal PLUS Loan, Federal Supplemental Loan for Students, or Federal Consolidation Loan borrowed before July 1, 1993. The same deferments that apply to these FFELP’s can apply to your Direct Loan. If you are unable to make payments on your PLUS Loan for reasons such as unexpected personal problems or poor health, you may request forbearance if you do not qualify for a deferment. Forbearance allows you one of these options: postponement of payments, extension time between payments, or smaller payments than originally scheduled. Interest continues to accrue during a period of forbearance. You may also receive forbearance if you serve in a medical or dental internship or residency, or if you serve in a position under the national and Community Service Trust Act of 1993, or if you are obligated to make federal student loan payments equal to, or greater than, 20 percent of your total monthly gross income (there is a three-year limit for this forbearance). DischargeYou can discharge a PLUS Loan under the specific circumstances. Loan ConsolidationConsolidating your loans allows you to make only one monthly payment to cover your Federal Direct PLUS Loans and any federal student loans you may have for your own education.
Financial Aid Office
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8000 York Road | Towson, MD 21252 | 410-704-2000