PLUS Loan Frequently Asked Questions

How much can I request for a Federal PLUS Student Loan?

You may request up to the cost of education (as determined by the school) minus any other aid that the student has received. So, if the cost of education is $14,000 and the student is receiving only a Federal Stafford Loan for $3,500, you may borrow up to $10,500.

Is this loan in the parent's name or the student's?

The Federal PLUS Student Loan is in the name of the parent who applied. Unfortunately, the loan cannot be switched from the parent's name to the student's.

Apply Now for the PLUS Loan for Parents

When do payments start?

Parents now have the choice of making payments while the student is in school or deferring payments until the student graduates. If you choose to pay after graduation, interest will accrue from the time of full disbursement. You can choose to pay the interest monthly, or you can defer both interest and principle until the student graduates. If you choose not to pay the interest monthly, it is capitalized no more than four times per year.

How do I apply for the PLUS Loan?

Complete the application online!

Do I need to fill out the FAFSA?

No. The FAFSA is not required for PLUS Loans. However, it is strongly recommended that you file a FAFSA do so for your child, as the FAFSA opens up a myriad of other financial aid avenues. Certain schools may also require that a FAFSA is filed in order to certify a PLUS loan. It is recommended that you check with the financial aid office to see what the school's policy is.

How do I check on the status of my PLUS Loan application?

Once you sign and submit the Master Promissory Note, be sure to check in with the school's financial aid office to find out when they will be requesting certification.

What is the interest rate?

The interest rate for PLUS loans is set each year by the government, and calculated using the 91-day T-bill rate for the last auction in May of each calendar year, plus 3.1%. Currently, the PLUS loan interest rate for the 2009-2010 academic year (beginning July 1, 2009 and ending June 30, 2010) is fixed at 8.5%.

If you are a parent or legal guardian with PLUS loans and want to lock in the lowest rate possible, you must consolidate your PLUS loans after the final disbursement for that academic year.

Click here to consolidate your PLUS loans.

What are the fees for PLUS Loans?

Parents are required to pay a 3% origination fee. A federal default fee of 1% may also apply. These fees are deducted from the principal at each disbursement.

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What kind of credit is required for a PLUS Loan?

Eligibility for the PLUS Loan depends on a modest credit check that determines whether the parent has an adverse credit history. An adverse credit history is defined as being more than 90 days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.

To ensure that you can obtain a PLUS loan for your child's education, it is essential to have a recent copy of your credit report.

As a service to Parent PLUS Loan customers, we offer you the ability to order your credit report and score online for a nominal fee, in partnership with the Fair Isaac Company.

What if I am not approved for the PLUS Loan?

There are several options if you are not approved for the PLUS Loan, as some applications are declined for reasons other than poor credit. If you are declined, you can:

• Apply for unsubsidized Stafford Loan funds
• Apply for a Alternative Student Loan
• Find an additional co-signer and apply again

When will I get my denial letter?

After you are denied, you should receive your denial letter within two weeks of the denial date.

I already have a PLUS Loan. How can I find out more information about it?

You can check the status of your loans by using the National Student Loan Database System (NSLDS). You can access NSLDS for free at www.nslds.ed.gov

You will need a Federal student aid pin to access this site. If you do not know your pin you can access it at www.pin.ed.gov

When my child is done with school, can I transfer the PLUS Loan to them?

No. The PLUS Loan is a Parent loan, taken out in the parent's name. The student is not the borrower. If, as a parent, you are interested in a loan that has such a feature, you'll need to resort to private student loans. These loans are in the student's name, and depending on the lender, may have a cosigner release option. After a certain number of consecutive on time payments, the parent (as a co-signer) can apply to be released from the loan, making it entirely the student's obligation.

I'm an uncle/grandmother/friend - can I take out a PLUS Loan?

PLUS Student Loans are restricted to the parents or legal guardians of a dependent undergraduate student. Again, if you're interested in cosigning a loan for someone who is not your child, you'll need to borrow a private student loan.

 

Apply Now for the PLUS Loan for Parents