Master Promissory Note
Federal PLUS Loan Complete the Master Promissory Note
COMPLETE AND /OR VERIFY all of the information on the Federal PLUS Loan Application and Master Promissory Note. SIGN AND DATE the Master Promissory Note. COMPLETE the Student Section: If you are a graduate/professional student, provide information about yourself in both the Borrower (Parent) Section and the Student Information Section. If you are a parent borrowing for a dependent undergraduate student, provide the information regarding your dependent student in the Student Information Section. KEEP the Borrower Copy for your records SEND the remaining copy of the Federal PLUS Loan Application and Master Promissory Note to EAC unless otherwise directed by your school financial aid office.
Who can borrow a Federal PLUS Loan?
The Federal PLUS Loan is designed to be borrowed by: Parents of undergraduate students, or Graduate or professional students.
What is a Master Promissory Note?
In order for loan funds to be disbursed to you, you must sign a Master Promissory Note. A Master Promissory Note is: A promise to pay the full amount of the loan plus interest and other fees that may become due. A legal document that describes: The terms of your loan. The interest rate you will pay. When you must start repaying your loan.
How much can I borrow?
The amount you are eligible to receive will never be greater than the estimated cost of attendance minus any estimated financial assistance that has been or will be awarded during the period of enrollment. However, you may choose to borrow a lesser amount.
What happens then?
Your lender is required to conduct a creditevaluation. EAC notifies you, the lender, and the school when your loan has been approved. Your lender sends the funds to the school for delivery to you.
Who is EAC?
EAC is a guarantor authorized by the Federal Government to guarantee the repayment of student loans to lending institutions. EAC is dedicated to providing you assistance. While its very important to stay in close contact with the lender of your PLUS Loan, EAC is also available to answer your questions, provide guidance, and offer ideas for managing the payments on your PLUS Loan.
How do I contact EAC?
If you have any questions, contact EAC: Toll-free at 1-800-592-1802, press 1 Local at (605) 225-6423, press 1 Telecommunications Device for the Deaf (TDD) at 1-800-752-3949 E-mail at eac@eac-easci.org
Federal PLUS Loan What is the Federal PLUS Loan Notice of Loan Guarantee and Disclosure Statement?
The statement indentifies the particular terms of your loan and includes: The loan amount. You must repay this amount and interest on this amount. The amount of your loan disbursement(s). The estimated date(s) your loan funds will be sent to the school. The interest rate on the loan. The amount of applicable loan fees. Your repayment schedule. After the schools receipt of the PLUS Loan funds, the school credits the student account. Any remaining loan funds will be delivered directly to you. If you are borrowing for your dependent student, you may authorize the school to deliver the remaining loan funds directly to your dependent student.
What is Electronic Funds Transfer (EFT)?
Electronic Funds Transfer (EFT) is a method of sending loan funds to the school by electronic transmission. With this method, the lender sends loan funds to the school electronically in place of issuing a check. If the school participates in EFT for the Federal PLUS Program, the school will transfer electronically transmitted loan proceeds from the schools account to the students account. The school must provide a notification to you that the funds have been credited to the students account. This notice must be provided no more than 30 days before or 30 days after the date the school credits the students account.
Laws and regulations governing the program or the lenders policies may change after you complete the Master Promissory Note. These changes will appear on your Federal PLUS Loan Notice of Loan Guarantee and Disclosure Statement and replace the terms of the Master Promissory Note. If you have any questions about the information on your statement or if you want to cancel your loan, contact your lender before you accept your loan funds.
What do I need to know about repaying?
The repayment period on a Federal PLUS Loan begins on the day your loans last disbursement is made. You are allowed at least five years, but no more than 10 years to repay your loan. The repayment period excludes periods of authorized deferment and forbearance. You are eligible for deferment while enrolled at least halftime at an eligible school. Your first payment is due within 30 to 60 days of the date of the last disbursement. The repayment schedule will be disclosed on the Federal PLUS Notice of Loan Guarantee and Disclosure Statement. You may repay the entire loan at any time without penalty. You remain legally responsible for the loan until it is paid in full.
When will I receive my loan proceeds?
Your loan money will be disbursed to the school by electronic funds transfer (EFT), master check (one check covering multiple students), or individual check. If your loan money is disbursed by individual check, the check will be co-payable to you and the school and sent to the school. Generally, your loan money will be disbursed in multiple installments based on the academic terms at the school. If the school does not have academic terms, your loan money will generally be disbursed in at least two installments, one at the beginning and one at the midpoint of the enrollment period for the applicable loans.
ATTENTION: When you complete and sign a Master Promissory Note, you are signing a legal document that is a
promise to pay the full amount of the loan regardless of the satisfaction with the education received. Your signature on the Master Promissory Note is your agreement to repay this loan under the terms stated. Before signing the Master Promissory Note or accepting the aid, read the Master Promissory Note carefully for the terms of the loan.
Your loan will be in default and will be reported to all national credit bureaus. This could affect your ability to qualify for a loan, home mortgage, credit cards, etc. You will be ineligible for deferments. Your entire loan becomes due.
What happens if I dont make my student loan payments?
You may lose federal payments, and/or your tax refund may be withheld. You may become ineligible for further financial aid and other federal benefit programs. Your wages may be garnished. You will be responsible for collection costs which will increase the total amount you owe by as much as 25%.
REMEMBER: Repayment is required even if you are dissatisfied with the education received, do not graduate, or cannot find a job. This is a loan that must be repaid.
FH10 2461 04/2006