The Federal Direct Parent/Graduate PLUS Loan is a fixed interest loan that the government provides to parents of dependent students and graduate students. In order for a parent/graduate student to apply for this loan, the student must first complete a FAFSA. The interest rate for the 2012-13 academic year is 7.9%.
After completing the FAFSA, the parent/graduate student must complete a credit check (paper or online – have both appear as links) in order to determine the eligibility for this loan. Once our office receives your application, we will process the credit check to determine the credit decision.
If the parent/graduate student is approved, the next step is to go online to www.studentloans.gov and log in with the FAFSA PIN to sign a Master Promissory Note (MPN) for either the Parent PLUS or the Graduate PLUS. The MPN signifies your acceptance of the loan, and in most cases, your MPN has a “lifetime” of 10 years so you should not need to complete a new one.
All graduate students who borrow a Graduate PLUS Loan are required to complete Entrance Counseling to accept the loan. This is an online process, and requires you to log into www.studentloans.gov with your FAFSA PIN. You must select the Counseling Type for a graduate or professional student.
If the parent is denied, there are three different options that the parent may pursue. The first option is for the parent to use an endorser (cosigner) to take out the loan. The second option is for the parent to request a credit override from Borrower Services on the loan – this is done if you believe that the credit decision you received was in error. This may require you to provide proof to Borrower Services with the reason why your credit decision was incorrect. The third option is for the student to request additional Unsubsidized Stafford Loan funds in their name. Please be aware for this option the student is limited to a maximum award of either $4,000 or $5,000, based on the number of credits the student has completed.
Parents are able to defer payments on their Parent PLUS Loan while the student is enrolled in a degree-seeking program (also referred to as matriculated) and they are at least half-time (which is at least 6 credits for an undergraduate student). To do this, the parent must contact their loan servicer and request an In-School Deferment Request Form. The parent completes the top portion of the form and submits it to our office. We will complete the remainder of the form and forward the completed document to the loan servicer(s).
If a graduate student is denied, the student also has the option to use an endorser (cosigner) or request a credit override from Borrower Services. Graduate students are not eligible to receive additional Unsubsidized Loan funding. You may opt to defer your loan, although it may have been deferred automatically. You can check online at www.nslds.ed.gov to see if your loan has been placed into deferment. If your loan is not in deferment, then you may contact your loan servicer(s) for the In-School Deferment Request Form.