Federal PLUS Loan

A parent or step-parent may borrow through this government sponsored loan program.

There are no annual or aggregate loan limits. The maximum amount available each year will be determined by deducting any financial aid available for the student from the cost of attendance. The parent-borrower must be "credit worthy" and a credit check will be conducted. A pre-approval request is available through American Education Services.

To apply for a PLUS Loan the parent should submit a Loan Request Form. If the student does not file a Free Application for Federal Student Aid (FAFSA), the parent borrower must provide documentation of citizenship to the Office of Financial Aid.  The Office of Financial Aid will send the loan information to the lender or guarantor during the certification process.

• Before disbursement of funds for a first PLUS Loan, the parent will need to complete a Master Promissory Note(MPN). Loan funds will not be disbursed until this process is completed.
  
• If a parent borrowed through the PLUS Loan Program previously, the Parent Loan (PLUS) section on the Loan Request Form should be completed including the amount that is necessary for the entire academic year. It is not necessary to complete another MPN unless a new lender is selected.

Fees: Each loan disbursement is subject to a 3% origination fee and a 1% default fee.  In the past some guarantors have subsidized the 1% default fee.  It is unclear if this benefit will be available for the 2008-09 academic year.

Interest rate: 8.5%. 
Over the last few years some lenders provided interest rate reductions.  Most lenders have yet to determine if such benefits will be available for the 2008-09 academic year.  We suggest that borrowers contact various lenders to inquire about special offers before submitting a Federal PLUS Loan request. 

Repayment Period: 10 years
Congress recently approved deferment of repayment until the student drops to less than half time status.

NOTE: If a student's parent is unable to obtain a PLUS Loan, the student may qualify for additional unsubsidized Federal Stafford Loan funds. At the first-year and sophomore levels, the student may borrow to a maximum of $4,000 in additional funds each year. During the junior and senior years the amount increases to $5,000 per year.