Information for 2021-22

• The borrower is the parent.
• A co-signer is not required; however, a co‐signer could be used in the event the main borrower’s application is denied.
• Interest Type: Variable fixed, meaning borrowers would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan.  Interest is capped at 10.5%.
• Current Interest Rate: 6.284% for 21-22.
• Fees: 4.228% origination fee (deducted from the total amount borrowed). 
• Repayment is immediate and begins 30‐60 days after last disbursement is made. Interest‐Only and Deferred payment options may be available; you will need to contact your loan servicer (once assigned) for details. Minimum monthly payment is $50.
• Loan Term: 10 years.
• Limits: Up to cost of attendance minus any financial aid received.
• Required Materials:
  • FAFSA (https://studentaid.gov/h/apply-for-aid/fafsa)
  • Master Promissory Note (https://studentaid.gov/mpn/parentplus/landing)
  • Completed application (https://studentaid.gov/plus-app/parent/landing)
• Additional Details:
  • The PLUS Loan is not need‐based. A review of credit‐worthiness is required in order to receive PLUS funds.
  • You will be asked to choose an amount to borrow that is either;
    (1) Specific – you pick an exact number. This the suggested course of action.
    (2) Max Available – you choose to borrow as much as possible. This includes borrowing against unbilled expenses such as books, travel, and personal allowances.
    (3) Unknown – if you do not know how much to borrow, contact our office and we can help you decide what is right for you and your student.
  • The amount that you choose is a NET amount, meaning the actual loan balance will be higher to accommodate the origination fee.

We encourage you to submit your application by August 15, in order for the loan credits to be available toward the payment required for fall term registration. Please note that you cannot apply for a PLUS loan prior to June 1st. 

If you are applying for financial aid, you should not submit your loan application until you have received a financial aid decision and can determine how much you will need to borrow.

For New Direct PLUS Borrowers:

1. Create an FSA Account online. The federal government no longer uses the 4 digit FAFSA PIN to validate student or parent identity. In order to complete an application for a PLUS Loan, you will need a FSA username/ID and password. Account creation takes about 5 minutes to complete and is required to be able to log in to the site.
2. Complete a 2021-2022 Free Application for Federal Student Aid (FAFSA).  The federal government requires all PLUS applicants to have a completed FAFSA for the student they are borrowing for on file.  Please use our school code, E00468, to designate Harvard to receive the completed FAFSA.
3. Complete the on-line Master Promissory Note and PLUS Loan Application. In order for us to process your new loan, the borrower information must match exactly the information that was submitted on your original Master Promissory Note. Please note: you must select “Harvard College”, school code G02155, when completing the online PLUS application.

For Returning PLUS Borrowers:

1. Complete a 2021-2022 Free Application for Federal Student Aid (FAFSA).  The federal government requires all PLUS applicants to have a completed FAFSA for the student they are borrowing for on file.  Please use our school code, E00468, to designate Harvard to receive the completed FAFSA.
2. Complete the on-line PLUS Loan Application.  In order for us to process your new loan, the borrower information must match exactly the information that was submitted on your original Master Promissory Note. If your address has changed since the last time you applied, please complete a new Master Promissory Note. Please note: you must select “Harvard College”, school code G02155, when completing the online PLUS application.

Please note the Federal PLUS Loan program carries a loan origination fee of 4.228% which will be added to the amount you request online. For example: if you request a loan of $10,000, your application will be processed for $10,440, in order to net the proper amount. Please contact our office with any questions.

In the event the borrower is denied the PLUS loan, they will have the option to either;
(1) appeal the decision, or
(2) re‐apply with a co‐signer, or
(3) withdraw their application.

If you choose to appeal the decision the process begins online at https://studentaid.gov/appeal-credit where you will be asked to document your extenuating circumstances. Appeals can take up to two weeks to process so make sure to plan accordingly. If approved, you will be notified by Direct Lending Services and our office will receive notification shortly thereafter. You MUST also complete online PLUS Credit Counseling.

If you choose to reapply with a co-signer you will follow the same general process as above by documenting your extenuating circumstances at https://studentaid.gov/appeal-credit. If approved, you will need a credit-worthy co-signer and have them complete both a Master Promissory Note (MPN) and Co-Endorser addendum. PLEASE NOTE: When applying with a co‐signer the amount of your loan changes from a NET amount to a GROSS amount. Your co‐signer will need to adjust the amount of loan they are approving on their addendum if you wish to maintain your original request. If you do not know how to do this, please contact our office beforehand. A Co‐Endorser addendum is only approved once, meaning incorrect information will have to be discarded and the process will start all over. You MUST also complete online PLUS Credit Counseling.

If you choose to withdraw your application for a Federal PLUS Loan, the student will have the option of borrowing an additional $4,000 in Unsubsidized Stafford Loan, assuming they meet the eligibility requirements. This amount increases to $5,000 for seniors.

All lenders are not alike. In addition to banks, some educational associations, state education agencies, and other organizations offer student and parent loans for school. Each of these lenders may offer special discounts or services to a student based on the state they live in, the credit rating of the applicant, or even their grade level.

It is important to research and choose the lender that is right for you. Don’t be afraid to ask questions and make sure you take the time to compare what each lender has to offer before making a decision.

As a general rule, students should only consider obtaining a private education loan if they have maxed out their Federal loan options. Parent borrowers should also compare costs with the Federal PLUS loan. The PLUS loan is a federal parent loan and usually has better repayment terms than most private loans.

The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a higher interest rate and no fees. A good rule of thumb is that 3% to 4% in fees is about the same as a 1% higher interest rate. Lenders rarely give complete details of the terms of the private student loan before the student submits an application, in part because this helps prevent comparisons based on cost.

Here are several points you should research if considering a private loan:

• What is the interest rate; is it fixed or variable; is the rate capped?
• What fees must be paid for this loan?
• When does repayment begin and is there a grace period?
• What will my monthly payment be?
• What is the total cost if I use the full repayment period?
• Are there penalties for early repayment?
• Are there deferment or forbearance options?
• Is the loan program well-established?

There are many different private loan search engines and resources available. Some states have programs for residents so you may want to see if your home state has an education lending authority. Regardless of where you start, always get multiple offers before committing to a specific lender.

The Master Promissory Note (MPN) is the legally binding contract that sets the terms and conditions for the loan you are borrowing. An MPN is required for each loan program. MPNs can be used multiple times over a maximum of ten years, meaning you don’t have to sign a new one every year.

• Outside Awards can help reduce your need for loans. 
• Term-time work and summer employment can also reduce the need to borrow.
• Payment Plans can lessen the burden of a term bill balance by stretching it out over time.
• Savings accounts are great for any student. If you already have a job, set aside money each month for education expenses.