Fillable Master Promissory Note Template Direct Plus Loans (Page 3 of 15) in pdf

MPN TERMS AND CONDITIONS

GOVERNING LAW

If you are in the military and the interest rate on your loan is greater than 6%, you

may qualify to have the rate limited to 6% during your period of service. In

The terms of this Master Promissory Note (MPN) will be interpreted in accordance

addition, under the no accrual of interest benefit for active duty service members,

with the HEA (20 U.S.C. 1070 et seq.), ED's regulations, any amendments to the HEA

you are not required to pay the interest that accrues on any type of Direct Loan

and the regulations in accordance with the effective date of those amendments,

Program loan first disbursed on or after October 1, 2008 during periods of

and other applicable federal laws and regulations. Throughout this MPN, we refer

qualifying active duty military service (for up to 60 months).

to these laws and regulations collectively as the “Act”.

Interest accrues on the unpaid principal balance of each loan from the date of

Under applicable state law, except as preempted by federal law, you may have

disbursement until the loan is paid in full, including during deferment,

certain borrower rights, remedies, and defenses in addition to those stated in this

forbearance, or other periods. Except during certain periods of repayment under

MPN and the Borrower's Rights and Responsibilities Statement.

the Revised Pay As You Earn Repayment Plan (REPAYE Plan), you agree to pay all

DISCLOSURE OF LOAN TERMS

interest charges on your loan. (The REPAYE Plan is not available to parent

This MPN applies to Direct PLUS Loans. Under this MPN, the principal amount that

borrowers.) You will be given the opportunity to pay the interest that accrues

you owe, and are required to repay, will be the sum of all disbursements that are

during a period of authorized deferment or forbearance. If you do not pay this

made (unless you reduce or cancel any disbursements as explained below under

interest, we may capitalize the interest (add it to the principal balance of your

Loan Cancellation), plus any unpaid interest that is capitalized and added to the

loans) at the end of the deferment or forbearance.

principal balance.

LOAN FEE

Each loan made under this MPN is separately enforceable based on a true and

As provided by the Act, we charge a loan fee for each Direct PLUS Loan you receive

exact copy of this MPN.

under this MPN. The loan fee is a percentage of the loan amount and will be

At or before the time of the first disbursement of each loan, you will receive a

deducted proportionately from each disbursement of each of your loans. The

disclosure statement identifying the amount of the loan and additional terms of

specific loan fee that you are charged will be shown on disclosure statements that

the loan. The Borrower's Rights and Responsibilities Statement accompanying this

will be sent to you. We may refund the loan fee only as permitted by the Act.

MPN contains important additional information. The Borrower's Rights and

Responsibilities Statement and any disclosure statement you receive in connection

LATE CHARGES AND COLLECTION COSTS

with any loan under this MPN are hereby incorporated into this MPN.

We may collect from you:

You may request additional loan funds to pay for your or the student's educational

•

A late charge of not more than six cents for each dollar of each late payment

costs by contacting the school's financial aid office. The school will determine if

if you do not make any part of a required installment payment within 30 days

you are eligible for any additional loan funds. You will be notified of any increase or

after it becomes due, and

other change in the amount of your loan.

•

Any other charges and fees that are permitted by the Act related to the

We may use a servicer to handle billing and other communications related to your

collection of your loans.

loan.

If you default on your loans, you must pay reasonable collection costs, plus court

LOAN CANCELLATION

costs and attorney fees.

You may pay back all or part of a loan disbursement within the timeframes set by

REPAYMENT

the Act, as explained in the Borrower's Rights and Responsibilities Statement and

You must repay the full amount of the loans made under this MPN, plus accrued

in a disclosure statement that you will receive. If you return the full loan amount

interest. You will repay each loan in monthly installments during a repayment

within those timeframes, you will not have to pay any loan fee or interest charges.

period that begins on the day of the final disbursement of that loan. Generally,

If you return part of a disbursement within those timeframes, ED will reduce the

payments that you make or that someone else makes on your behalf will be

loan fee and interest charges in proportion to the amount returned.

applied first to late charges and collection costs that are due, then to interest that

has not been paid, and finally to the principal amount of the loan. However, any

INTEREST

payments made under the REPAYE Plan, the Pay As You Earn Repayment Plan

Unless we notify you in writing that a different rate will apply, the interest rate for

(PAYE Plan), and the Income-Based Repayment Plan (IBR Plan) will be applied first

any loan you receive under this MPN is a fixed rate that is calculated in accordance

to interest that is due, then to fees that are due, and then to the principal amount.

with a formula specified in the Act. The interest rate for Direct PLUS Loans is

The REPAYE, PAYE, and IBR plans are not available to parent borrowers.

calculated each year. When the rate is calculated, it applies to Direct PLUS Loans

You have a choice of repayment plans. The Borrower's Rights and Responsibilities

for which the first disbursement is made during the period beginning on July 1 of

Statement includes information on these repayment plans. You must select a

one year and ending on June 30 of the following year. Different interest rates may

repayment plan. If you do not select a repayment plan, we will choose a plan for

apply to different loans you receive under this MPN, depending on when the loan

you in accordance with the Act.

is first disbursed. The maximum interest rate for Direct PLUS Loans is 10.5%. We

Once you choose a repayment plan, we will provide you with a repayment

will notify you of the interest rate on each of your loans.

schedule that identifies your payment amounts and due dates. If you intend to

repay your loan but are unable to make your scheduled loan payments, we may

grant you a forbearance that allows you to temporarily stop making payments or

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Master Promissory Note Template Direct Plus Loans Page 3

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