07/26/21
Federal Loans Explained
After you receive your Andrews University online award notification, you will need to decide if you want to accept or decline the federal loans offered
to you. If you choose to accept your loans, the steps for all Federal Direct Loans (Subsidized, Unsubsidized, and PLUS loan) are the same. You can
accept your loans online (see Financial Aid-SSB) or by paper as well. Parents and Graduate students can apply for their PLUS loan online (go to
https://studentaid.gov & follow the steps listed) or by paper as well.
STEP 1. DECLINE or ACCEPT LOANS RENEW ANNUALLY
STEP 2: COMPLETE ENTRANCE COUNSELING COMPLETE ONE TIME
Visit the Loan Entrance Counseling website (https://studentaid.gov) and answer questions regarding your rights and responsibilities as a
borrower. Once completed, the results will be electronically sent to our department. Typically, these results take 24 hours to reach us. Parents
and Graduate PLUS borrowers are required to complete PLUS loan counseling when an appeal is requested or an endorser is sought.
STEP 3: SIGN MASTER PROMISSORY NOTES COMPLETE ONE TIME EVERY TEN YEARS
A master promissory note (MPN) is needed to complete your loan application. Without it, you cannot count this loan as accepted aid and your
loan will not disburse. This step will need to be completed only once for each type of loan (Subsidized, Unsubsidized, and PLUS) except when a
PLUS (Parent or Graduate) loan is endorsed. Every endorsed loan requires a single MPN. Go to https://studentaid.gov & follow the steps listed.
STEP 4: ANNUAL STUDENT LOAN ACKNOWLEDGEMENT RENEW ANNUALLY
Per the Department of Education, all student and parent borrowers will now be required to view how much they currently owe in federal student
loans each year, and to acknowledge this amount, before a school can disburse the Direct Loan that a student or parent borrower receives for
each new award year. Information is available at the Federal Student Aid website https://studentaid.gov.
► This information (with links) is also available on the SFS website. Go to www.andrews.edu/sfs.
LOAN FAQs
Are subsidized and unsubsidized loans different? Yes, with a subsidized loan, the government defers the interest for as long as the student is enrolled at
least half-time. An unsubsidized loan accrues interest immediately. The student will receive a statement from the federal government stating the interest charged.
The student will have the option of making payments on the interest or deferring.
What is the interest rate? The interest rates for Direct Subsidized, Direct Unsubsidized, the Grad PLUS, and the Parent PLUS loans are set as of July 1 for the
coming school year. You can see the current rates by going to studentaid.gov/sa/about/announcements/interest-rate
.
How much can I borrow? Your eligible student loan amount will be listed on your online award notification. The maximum PLUS amount that can be
borrowed is the student’s cost of attendance minus all other aid the student receives.
When do I begin repayment? There is no payment required for the student loans until six months after graduating or dropping below half-time. A parent
PLUS borrower can defer repayment of Direct PLUS loans while the student for whom you obtained the loan is enrolled at least half-time, and for an additional 6
months after the student graduates or drops below half-time enrollment.
What happens to my loans if I do not enroll? Previously enrolled students who do not enroll for a given semester or drop below half-time enrollment
should contact the Student Financial Services office to discuss their loan situation.
What about the Grad PLUS loan?
The Grad PLUS loan is like an unsubsidized loan in that it accrues interest. You’ll receive a notice of disbursement that
indicates that payment is due 60 days after last disbursement. However, like other student loans, you can have in-school deferment if continuously enrolled at least
half-time.
What happens after I submit the PLUS application? Once we receive the loan request form, your data will be sent to the loan servicer for a credit
check. When your loan credit is approved, first time borrowers will need to sign a Master Promissory Note. Notes can be signed online at studentaid.gov
. Read the
terms carefully. Only when the signed note is received and the student is registered for at least half-time or more will the loan funds be disbursed to the student’s
account.
What are my options if the loan servicer informs me that my PLUS application is denied? Your loan may still be approved with an appeal or
an endorser. Follow all the steps at studentaid.gov
. Pay special attention to the PLUS Loan Counseling, a newly added requirement since 2015. The student may be
eligible for an additional unsubsidized loan.
Can I ever postpone my PLUS loan payments? In some circumstances, you can postpone payment on a PLUS loan. Contact the Direct Loan Servicing
Center at 1-800-848-0979 to request information about deferment or forbearance. In most cases, you must provide documentation showing why you qualify.
Can my PLUS loan ever be cancelled? Yes, in some extreme situations, a PLUS loan can be cancelled. You must contact the Direct Loan Servicing Center at
1-800-848-0979.
Is there some way to combine more than one PLUS loan to make repayment easier? Federal Direct Loans can be combined through a Federal
consolidation program. Contact 1-800-557-7392 to receive more information.
