Federal Direct Parent Loan For Undergraduate Students(PLUS)
A PLUS Loan is a low-interest federal loan that allows a parent to borrow on behalf of their dependent child. Parent eligibility is subject to a credit check. Funds are sent directly to the college. Repayment begins 30-60 days after the second disbursement is made to the school. Graduate students may also borrow the Graduate PLUS Loan, a PLUS Loan that graduate students must pass a credit check on.
The interest rate for 2016-17 is 6.31% with an origination fee of 4.272% for loans first disbursed on or after October 1st, 2015. The origination fee is 4.276% for loans first disbursed on or after October 1st, 2016.
* In order to qualify for the lower origination fee, when repayment begins, the first 12 payments must be made on time. Failure to do so will cause the rebate fees to be revised to a higher rate.
Repayment of PLUS (for PLUS Loans on/after July 1, 2008)
Parents who wish to postpone PLUS payments are now able to delay their payment on new PLUS Loans until 6 months after the student is no longer enrolled---the parent would need to contact Direct Loan Borrower Services for details/procedure.
WHO IS ELIGIBLE?
All students who meet the following criteria are eligible to participate in the Stafford Loan or the Parent Loan for Undergraduate Students (PLUS) programs:
- Have an official high school diploma or General Education Development (GED)
- Enroll as a matriculated student
- U.S. citizenship or eligible non-citizen
- Maintain satisfactory academic progress toward completion of a college degree
- Register with Selective Service, if required by Law
You are not eligible to receive financial aid if you are currently in default on student loans or owe money to the federal government for financial aid you were ineligible to receive.
Distribution of Refunds
Federal regulations require any excess PLUS loan funds to be returned to the parent (2013-14 FSA Handbook, p 4-39). Therefore, if PLUS loan funds create a credit balance on the account, the refund would be returned to the parent.
Refunds caused by the student's financial aid (all aid other than the PLUS loan) is refunded directly to the student.
Purchase College's policy towards helping to reduce federal student/parent loan debt includes trying to reduce student's (or parent's) indebtedness when a student becomes overawarded after loan disbursements have been made. This is based on guidance from the Federal Student Aid Handbook (2014-15): Although a school isn't required to return Direct Loan, or nonfederal education loan funds that were disbursed to the borrower (either directly or by applying them to the student account) before the overaward situation occurred, the law doesn't prevent your school from returning funds that were applied to the student account if you choose to do so.
All Federal Direct Loan funding requests, reductions, or cancellations must be completed (with all required steps) prior to the last day of the academic year; or if the student leaves the school before the last day of the academic year, then prior to the last date of the student's attendance. Purchase College must be given adequate time to process any late loan funding requests.
It is our school's policy that we do not process any federal loan funding: requests, adjustments, or cancellations after:
- The last day of the academic year in which the loan funding is for
- The last day of a student's attendance within the academic year if it is before the scheduled end date of the academic year
***FAFSA Application is required to be eligible for the Parent PLUS Loan.***