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 the 2010-2011 Academic Year is 7.9% with fees of 2.5% (if the loan is paid back on time).*
* 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---thep parent would need to contact Direct Loan Borrower Services for details/procedure. For Federal Direct PLUS Loans with loan periods starting Summer 2009 or after, the interest rate is 7.9%.
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:
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.
***FAFSA Application is required to be eligible for the Parent PLUS Loan.***