Publication Date: February 2003
DCL ID: GEN-03-03
Implementation of a PLUS Master Promissory Note
Posted on 02-07-2003
SUBJECT: Implementation of a PLUS Master Promissory Note
SUMMARY: This letter announces a Master Promissory Note for use in the Federal Family Education Loan PLUS Program and provides details on its implementation.
This letter and its enclosure provide details on the introduction of the Federal PLUS Loan Application and Master Promissory Note (PLUS MPN) in the Federal Family Education Loan (FFEL) Program.*1* The new FFEL PLUS MPN is now available for the 2003-2004 academic year. After a one-year transition period, it will replace the current approved promissory note for Federal PLUS loans made under the FFEL Program beginning with the 2004-2005 academic year.
The PLUS MPN is designed for a parent borrower to use as a multi-year note for one dependent student. Under the PLUS MPN process, a parent borrower will sign a PLUS MPN only once, at the time the parent first borrows for that dependent student. The parent may obtain additional loans for that same dependent student based on the originally signed MPN, during the same year or in subsequent years, for up to ten years after the date the parent first signed the PLUS MPN. Generally, as long as the parent borrower, the dependent student, and the lender do not change, a new PLUS MPN is not required. However, as with the Stafford Loan MPN for student borrowers, the parent borrower, the school or the lender may request that a new PLUS MPN be signed for each new loan period even if doing so would not otherwise be required.
The use of the PLUS MPN as a multi-year note will be available to parent borrowers whose dependent students are attending any domestic school that participates in the FFEL Program. A parent whose dependent student is attending a foreign school will be able to use the multi-year feature of the PLUS MPN only if the school has been expressly approved by the Secretary to have its student and parent borrowers do so.*2* A parent borrower whose dependent student is attending an eligible FFEL foreign school that is not approved to use the multi-year feature of the PLUS MPN will need to sign a new PLUS MPN for each new loan.
Copies of the PLUS MPN and related forms are included in the enclosure to this letter for your information. FFEL lenders and guaranty agencies have been provided with the forms and will be free to distribute the forms to schools or directly to FFEL PLUS borrowers. The PLUS MPN may first be used for Federal PLUS Loans for loan periods beginning on or after July 1, 2003 and must be used for all Federal PLUS Loans for loan periods beginning on or after July 1, 2004, or for any loan certified on or after July 1, 2004, regardless of the loan period.
The enclosure to this letter and the attached forms provide additional detailed information on the new FFEL Program PLUS MPN process. Schools may contact the guaranty agencies or FFEL lenders they normally work with to determine how they plan to implement the new PLUS MPN process.
Jeffrey R. Andrade
Deputy Assistant Secretary
Office of Postsecondary Education
*1* Note that the Direct Loan Program will also introduce a PLUS MPN at the same time and under generally the same conditions as the FFEL PLUS MPN. Details of the Direct Loan PLUS MPN will be provided to Direct Loan schools in a forthcoming Direct Loan Bulletin.
*2* Please refer to Dear Colleague Letter GEN-02-10 for details of institutional eligibility for use of the multi-year feature of both the Stafford and PLUS MPNs.
ATTACHMENT: FEDERAL PLUS LOAN APPLICATION AND MASTER PROMISSORY NOTE AND RELATED FORMS