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PLUS Parent Loans
Program DescriptionPLUS Loans come from one of two sources:
- Direct PLUS Loans are made by the U.S. Department of Education. You repay a Direct PLUS Loan to the U.S. Department of Education.
- Federal PLUS Loans are made through Federal Family Education Loan (FFEL) Program. While FFEL funds come from private lenders, such as banks and credit unions, they are subsidized and supported by the U.S. Department of Education. You repay a FFEL PLUS Loan to the private lender that made the loan or to its designated agency.
Whether you receive a Direct or FFEL PLUS Loan depends on the program in which your school participates. In either case the terms of the loan (loan amounts, interest rate, and other benefits) are generally the same.
The school applies PLUS loan funds toward your child's educational costs such as tuition, fees, and room and board. If any loan funds remain after school charges are paid, you will receive the remaining amount from the school, unless you authorized the school to release the funds to your child. Any funds you or your child receives must be used to pay the child's educational expenses.
General Program RequirementsTo qualify for this program, you must:
A) Be a parent of a dependent postsecondary student who is working toward a postsecondary degree or certificate; and
B) Not have an adverse credit history.
There are other requirements. For more information, read The Student Guide online at: http://studentaid.ed.gov/students/publications/student_guide/index.html
Loan TermsMaximum Loan Amount: Your child's cost of attendance minus other financial aid. For example, if your child's cost of attendance is $6,000, and he or she receives $4,000 in other financial aid, you can borrow up to $2,000 in PLUS Loans.
Interest Rate: The interest rate is variable (adjusted annually on July 1), but it does not exceed nine percent. You'll be notified any time the variable rate changes. For the current PLUS Loan interest rate, go to http://studentaid.ed.gov/PORTALSWebApp/students/english/parentloans.jsp?tab=funding.
Maximum Loan Length: up to 30 years, depending on the amount borrowed and the repayment plan chosen. There are a number of repayment plans offered through the Direct and FFEL programs. Read the Repaying Your Student Loan online at http://www.studentaid.ed.gov/students/publications/repaying_loans/index.html for more information about repayment.
Frequency of Payments: monthly or quarterly. Generally, the first payment is due within 60 days after the loan is fully disbursed. You must begin repaying both principal and interest while the student is in school.
Prepayment Penalties: none
Fees: You will pay a fee of up to four percent of the loan, deducted proportionately each time a loan disbursement is made. Because of this deduction, you'll receive slightly less than the amount you're borrowing.
Your Next StepsThe following information will lead you to the next steps to apply for this benefit.
Application ProcessIf your child's school participates in the Direct Loan program, you can obtain a Direct PLUS Loan application from your child's school. To apply for a FFEL PLUS Loan, you can get an application through your child's school, from a lender that participates in the FFEL program, or from the guaranty agency in your state.
Note: Although it's not a requirement, you are strongly encouraged to have your dependent child file a Free Application for Federal Student Aid (FAFSA) to see if he or she may be eligible for other student loans or grants. The student can use FAFSA on the Web, at http://www.fafsa.ed.gov/ to apply (the faster and easier way), or he or she can get a paper FAFSA from his or her high school, local library, postsecondary school, or by calling the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). TTY users for the hearing impaired can call 847-688-2567.
Program Contact Information