Fillable Master Promissory Note Template Direct Plus Loans (Page 12 of 15) in pdf

William D. Ford Federal Direct Loan Program

Direct PLUS Loan Borrower's Rights and Responsibilities Statement

17. LATE CHARGES AND COLLECTION COSTS

If you default on a loan, we will report this to nationwide consumer reporting

agencies. We will notify you at least 30 days in advance that we plan to report default

If you do not make any part of a payment within 30 days after it is due, we may

information to a consumer reporting agency unless you resume making payments on

require you to pay a late charge. This charge will not be more than six cents for

the loan within 30 days of the date of the notice. You will be given a chance to ask for

each dollar of each late payment. If you do not make payments as scheduled, we

a review of the debt before we report it.

may also require you to pay other charges and fees involved in collecting your

If a consumer reporting agency contacts us regarding objections you have raised

loan.

about the accuracy or completeness of any information we have reported, we are

18. DEMAND FOR IMMEDIATE REPAYMENT

required to provide the agency with a prompt response.

The entire unpaid amount of your loan becomes due and payable (this is called

NOTE TO ENDORSER

“acceleration”) if you:

If the borrower of a Direct PLUS Loan becomes delinquent in making payments or

•

Receive loan money, but you or the student for whom you obtained the

defaults on the loan, we may also report your name to consumer reporting agencies

loan do not begin attendance in any classes at the school that determined

in connection with the delinquent or defaulted loan.

you were eligible to receive the loan;

•

Use your loan money to pay for anything other than expenses related to

22. DEFERMENT AND FORBEARANCE (POSTPONING PAYMENTS)

your or the student's education at the school that determined you were

General

eligible to receive the loan;

If you meet certain requirements, you may receive a deferment that allows you to

•

Make a false statement that causes you to receive a loan that you are not

temporarily stop making payments on your loan. If you cannot make your scheduled

eligible to receive; or

loan payments, but do not qualify for a deferment, we may give you a forbearance. A

•

Default on your loan.

forbearance allows you to temporarily stop making payments on your loan,

temporarily make smaller payments, or extend the time for making payments.

19. DEFAULTING ON YOUR LOAN

Deferment

Default (failing to repay your loan) is defined in detail in the MPN Terms and

Conditions section of your MPN. If you default:

You may receive a deferment:

•

We will require you to immediately repay the entire unpaid amount of

•

While you are enrolled at least half-time at an eligible school;

your loan.

•

We may sue you, take all or part of your federal and state tax refunds and

•

During the 6-month period after you cease to be enrolled at least half-time;

other federal or state payments, and/or garnish your wages so that your

•

While the student for whom you obtained a Direct PLUS Loan is enrolled at least

employer is required to send us part of your salary to pay off your loan.

half-time at an eligible school;

•

We will require you to pay reasonable collection fees and costs, plus court

•

During the 6-month period after the student for whom you obtained a Direct

costs and attorney fees.

PLUS Loan ceases to be enrolled at least half-time;

•

You will lose eligibility for other federal student aid and assistance under

•

While you are in a full-time course of study in a graduate fellowship program;

most federal benefit programs.

•

While you are in an approved full-time rehabilitation program for individuals

•

You will lose eligibility for loan deferments.

with disabilities;

•

We will also report your default to nationwide consumer reporting

•

While you are unemployed (for a maximum of three years; you must be

agencies (see Item 20). This will harm your credit history and may make it

diligently seeking, but unable to find, full-time employment);

difficult for you to obtain credit cards, home or car loans, or other forms of

•

While you are experiencing an economic hardship (including Peace Corps

consumer credit.

service), as defined in the Act (for a maximum of three years);

If you default on your loan, you will not be charged collection costs if you

•

While you are serving on active duty during a war or other military operation or

respond within 60 days to the initial notice of default that we send to you, and

national emergency or performing qualifying National Guard duty during a war

you enter into a repayment agreement with us, including a loan rehabilitation

or other military operation or national emergency and, if you were serving on or

agreement, and fulfill that agreement.

after October 1, 2007, for an additional 180-day period following the

demobilization date for your qualifying service; or

NOTE TO ENDORSER

If the borrower defaults on the loan, and you do not make payments on the

•

If you are a member of the National Guard or other reserve component of the

loan, you may also be subject to the actions described above.

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

20. CONSUMER REPORTING AGENCY NOTIFICATION

months of having been enrolled at least half-time, during the 13 months

We will report information about your loan to nationwide consumer reporting

following the conclusion of your active duty service, or until you return to

agencies (commonly known as “credit bureaus”) on a regular basis. This

enrolled student status on at least a half-time basis, whichever is earlier.

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.

Page 12 of 15

Master Promissory Note Template Direct Plus Loans Page 12

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