Parent PLUS Loan
After taking into account the Monthly Payment Plan and Direct Student Loan, students and parents may find the need for additional financing to meet their expected cost. A possible source you could utilize to obtain this additional funding is the Federal Direct Parent PLUS Loan.
A Federal Direct Parent PLUS Loan (Direct PLUS Loan) is a non need-based loan option for all, or part, of the annual cost of college. A Direct PLUS Loan is provided by the government's Direct Loan Program to a credit-worthy parent for the benefit of a dependent student. This means the parent is considered the primary borrower of the loan. Both the parent and student must be U.S. citizens or eligible non-citizens to qualify.
The PLUS loan contains many benefits and is an economically viable option for a parent to aid in the financing of a student's education. Consider the benefits of the Direct PLUS Loan Program outlined below.
- A fixed interest rate. PLUS loans lock in at a fixed interest rate of 6.31% for loans first disbursed between July 1st, 2016 - June 30th, 2017.
- Loan Fees: First disbursement date on or after 10/1/15 and before 10/1/16 = 4.272% First disbursement date on or after 10/1/16 and before 10/1/17 = 4.276%
- Loan Limits: You can borrow up to the cost of education less any other financial aid.
- Deferring Payments: Since it is a federal loan, it has a wider range of deferment and forbearance options.
- Repayment Plans: A wide array of repayment plans are available and can be changed throughout repayment to help accommodate your financial situation.
- Credit Check: There is a credit check, however there is no debt to income ratio requirement.
IMPORTANT REMINDER - It is also important to remember that in the event a parent is denied a PLUS loan, the student automatically becomes eligible for a limited amount of additional funding through the Federal Direct Loan for students program. This additional limited amount varies based on the student’s current Direct Loan amounts and grade level. Once our office is notified of a PLUS denial, the student will automatically be notified by us of the additional amount they are eligible for.
To apply for a Federal Direct PLUS Loan, go to the www.studentloans.gov.
- The parent must sign in using the FSA ID and password used to sign the FAFSA application.
- Next, click on “Apply for a PLUS Loan” on the left side of the page.
- The parent will need to select “Parent PLUS” to begin the application process. He or she can specify a loan amount or indicate maximum eligibility. We advise you to apply for the amount needed for the full academic year (fall and spring) to avoid having to complete another PLUS Loan Request that will trigger a second credit check for the spring semester.
Your parent will receive the results of a borrower-initiated credit check immediately. If approved, they are advised to complete a Direct PLUS Loan Master Promissory Note, unless one is already on file. If not approved, the borrower is asked how he or she wants to proceed: not pursue a Direct PLUS Loan, obtain an endorser or appeal the credit decision. The school will be notified of the results of the PLUS Loan Request. Please be advised that the credit check decision will be good for 180 days.
If you have additional questions, please do not hesitate to contact our office by phone at 717-361-1404 or via email at email@example.com.