Federal Direct Loans

FAFSA

Complete your FAFSA, a free application for Federal Student Aid at studentaid.gov

Complete the FAFSA Awarding & Verification portal annually.

You must complete a Master Promissory Note (MPN) to apply for a loan. The MPN is a legally binding agreement to repay your loan to the U.S. Department of Education. In most cases, one MPN for the Direct Subsidized and Unsubsidized can be used for loans that you receive over several years of study.

Before receiving a federal loan, students must complete Entrance Counseling. This step ensures you understand the responsibilities and obligations of borrowing. You’ll complete this requirement while finishing your FAFSA Awarding & Verification Portal.

Later, you’ll need to complete Exit Counseling when you graduate or drop below half-time enrollment. Exit Counseling prepares you to repay your federal loans by providing key information. To complete this, log in with your FSA ID and provide details about your income, financial aid history, and living expenses.

For more information about federal student aid and loan repayment, visit www.studentaid.gov.

Most federal student loan applications don’t include a credit check or credit requirements, but there’s one notable exception: PLUS Loans. The Parent PLUS Loan application includes a credit check and sets a standard of credit you must meet to get approved.

While your credit score isn’t a factor, other information on your credit report might be. Specifically, the Parent PLUS Loan application uses the credit check to screen for “adverse credit.” Adverse credit history is a negative mark on your credit report, including:

• Debt worth $2,085 or more that, within the past two years, was sent to collections, written off, or delinquent for 90 days or more
• Any of the following events within the past five years:
  • Default determination
  • Debt discharged through bankruptcy
  • Foreclosure
  • Repossession
  • Tax lien
  • Wage garnishment
  • Federal student loan or other aid debt written off

Biological and adoptive parents, who are U.S. Citizens or Eligible Non-Citizens, may borrow a Parent PLUS Loan to help fund their student’s education.

First time borrowers must complete an application online at studentaid.gov. After completing the application, you will be guided to complete a Master Promissory Note (loan agreement).

If you have borrowed a PLUS Loan in past years, you may not need to apply online again. After you and your student have decided on the amount you wish to borrow, please email Financial Aid to request the loan for the upcoming school year.

If your application for a federal direct parent PLUS loan is denied, you have a couple of options for borrowing as a parent. Option 1 & 2 seen below are the most common methods taken.

1. Student borrows additional Direct Unsubsidized Loans.

A dependent student whose parent is denied a Parent PLUS Loan becomes eligible for the same Direct Unsubsidized Loan limits available to independent undergraduate students. Your student can get increased loan limits, which vary according to class level (limited to $4,000 or $5,000 higher per year). These undergraduate loans have lower interest rates and fees than the PLUS Loans and will be in the student’s name. To receive this loan support, the student must email Financial Aid to request it.

2. Borrow a parent loan with a private lender.

To qualify for a private parent loan, you’ll typically need a good credit score and a steady income. In addition, the standard to qualify for Parent PLUS Loans is less strict than the standard to qualify for private student loans so this may not be a sound option. Private lenders can be reviewed here.

3. Seek an Endorser.

This endorser will be subject to a credit check and must meet the non-adverse credit requirement. An endorser, like a co-signor, legally takes on the responsibility of repaying your parent PLUS debt if you cannot.

STEP 1: An endorser will complete an addendum at studentaid.gov. The Endorser Code will be sent in an email to you. If you have trouble locating the Endorser Code, please email Financial Aid.

STEP 2: If your endorser is approved, you’re expected to complete credit counseling on the federal student loan website.

STEP 3: You must email fa@bryanhealthcollege.edu once the above steps have been completed.

4. Appeal the decision with the Department of Education.

You can appeal if you can prove your adverse credit ruling is based on incorrect, incomplete, or out-of-date information. You must fully document the extenuating circumstances related to the debt. After filing an appeal, the decision is left to the Department of Education. If your appeal is granted, provide the documentation to Financial Aid so that we may proceed with processing your loan.