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Student Financial Planning

William D. Ford Federal Direct Parent Loan for Undergraduate Students (PLUS)

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PLUS Loan Overview: PLUS is a federal loan program for parents of dependent undergraduate students to help cover out-of-pocket college expenses. PLUS loans are in the parents name and can never be transferred to the student.

Loan Eligibility and Amount: Federal Direct PLUS Loans allow parents to borrow on behalf of their dependent undergraduate children who are enrolled at least half time at a post secondary school. When you apply for a Direct PLUS Loan, the Department of Education will check your credit history. In addition, parents must be a US citizen or eligible non-citizen, and must not be in default on any federal loans. Students must meet Satisfactory Academic Progress. Parents can borrow up to the amount of the Total Cost of Attendance, minus any other aid the student is receiving.

Interest Rate, Origination Fee and Repayment: The interest rate on the loan is 7.9%, and interest begins to accrue the moment the loan is disbursed. In addition, there is a 4% origination fee. For PLUS loans made to parents that are first disbursed on or after July 1, 2008, the borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student (on whose behalf the parent borrowed) ceases to be enrolled at least half-time. Please be aware that the school can’t set up the deferment on the PLUS loan: you must contact Direct Lending in order to request the deferment. They can be reached at 1-800-848-0979.

Loan Application Requirements: To apply for a Direct PLUS loan, a parent must compete two steps with the Department of Education. Both steps are available on the same web page and can be done at the same time. The two steps are:

1. "Complete the PLUS Loan Request Process" at www.studentloans.gov, and
2. "Sign the Master Promissory Note" at www.studentloans.gov.
You will need the parent's FAFSA PIN number to complete the application (MPN) with an electronic signature.

Both steps must be completed before you can receive funds.

Generally, the PLUS Electronic MPN needs to be completed only once, provided the parent borrower remains the same from year to year.

The federal government will make a credit decision on the loan. This decision process can take up to two weeks. If you are approved for a PLUS loan and the PLUS Loan Request and Master Promissory Note are completed, we will disburse the funds to the student's account on the scheduled disbursement date.

What happens if I am denied? If you do not qualify for a PLUS loan you will be notified in writing along with your options. If you believe that the credit decision is incorrect you may appeal the credit decision. You also have the option to get a cosigner ("Endorser") or to bypass the PLUS loan which allows the student to take an additional Unsubsidized Stafford Loan of up to $4,000 for freshman and sophomores, or $5,000 for juniors and seniors.

PLUS Loan Renewal PLUS loans are not automatically renewed. A parent must complete the PLUS Loan Request process every year.

Disbursement of PLUS Loans: Your Federal PLUS Loan funds will be disbursed directly to your university student account. Funds are first used to pay tuition and other university expenses, but any leftover money can be used for other educational expenses.  In general, you will receive an equal amount for each term for which your loan was approved. Your parent borrower will receive a disclosure statement from the Direct Loan Servicing Center that lists the dates and amounts for each Direct PLUS Loan that you will receive. If you are enrolled less than half time in any term, you cannot receive Federal Loan funds for that term.

Graduate PLUS Loans: For information about Graduate PLUS loans, contact the Carthage Financial Aid Office. Graduate students should not complete the Parent PLUS Loan.

Additional Information: Direct Loan Basics for Parents (PDF)