Getting a Graduate Student Loan

Student Loan - The Master Promissory Note

To apply for any Direct Loan, you need to complete a Master Promissory Note (MPN). The MPN may be a legally binding agreement to repay your loan to the Department. In most cases, one MPN is used for loans that you just receive over many years of study.

If you received Direct Subsidized or Unsubsidized Loans as an undergraduate student, you may still have a valid MPN on file that you may use to take out further subsidized or unsubsidized loans as a graduate or professional student, if you are attending a school that participates in the Direct Loan Program. If you are getting a Direct PLUS Loan for the first time as a graduate or professional student, you'll need to complete and sign a PLUS MPN that is separate from the one that you use for your Direct


Subsidized and Unsubsidized Loans. When you complete a PLUS MPN, you are authorizing the Department to perform a credit check.


Is there a fee for my Direct Loan?
Yes, it is called the origination fee. You pay a fee that is a percentage of each Direct Loan that you receive. The amount will be shown on the disclosure statement that you will receive. Disclosure statements tell you the type of loan (Subsidized, Unsubsidized and PLUS), the amount of the loan, the amount of each disbursement, the fees, and other information about the loan. We deduct the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay.


How will I receive my loan money?
The school will generally disburse loan money by crediting your school account. It also may give some of it to you directly. Your loan money usually will be disbursed in at least 2 installments. You may use the loan money you receive only to pay for your education expenses at the school that is giving you the loan. Education expenses include such school charges as tuition, room and board, and fees, and such indirect expenses as books, supplies, equipment, dependent child care expenses, transportation and


rental or purchase of a personal computer.
The entire unpaid amount of your loan may become due and payable (on your MPN this is called "acceleration") if it turns out that you are not eligible for the loan. For instance, you'll have to pay back the loan immediately if:
You don't enroll at least half-time at the school that gave you the loan.
You gave false information that made you eligible for the loan.


When do I have to begin making payments on my loan?
Direct PLUS Loans--Repayment begins 60 days after you've received the last installment of the loan for a school year. However, as long as your school reports to us that you are still enrolled at least half-time, we will grant a deferment that allows you to postpone payments while you're continuing your education.* There is no grace period for PLUS loans, so you will be expected to begin repayment as soon as your deferment ends. Direct Subsidized and Unsubsidized Loans--Repayment begins after a 6-month grace period. The grace period begins the day after you cease at least half-time enrollment.


How much time will I have to repay my loan, and how much will I have to pay each month?
Generally, you'll have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Your monthly payment amount will be based on the amount you borrowed.


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