The Federal PLUS Loan (Parent
Loan for Undergraduate Students)
is an affordable, low-interest
loan designed to help parents
pay for their child's education.
This is a government loan
meaning that it is guaranteed
(or insured) by the federal
government.
There are two ways in which Federal
PLUS Loans are made available: through private lenders
such as PNC Bank, and in some
cases through schools participating
in the Federal Direct Lending Program.
Eligibility Requirements
Eligibility for these loans is not based on household income, so parents at all income levels are welcome to apply. Applicants will be required to pass a credit check based on the criteria established by the U.S. Department of Education.
In some cases, the student's
school may also require that
a Free
Application for Federal Student
Aid (or FAFSA) is submitted
to the Department of Education.
Check with the school's financial
aid office for more information.
In addition:
- Student must qualify as
your dependent
- Both parent and student
must be U.S. citizens, national,
permanent resident aliens
or eligible non-citizens of
another type
- Student must be accepted
or enrolled (at least half-time)
in an undergraduate program
leading to a degree at a U.S. Department of Education-approved school
- Student must maintain
satisfactory academic progress
Borrowing
Limits
For each undergraduate child,
parents may borrow up to the
student's cost of attendance
minus all other financial
aid awarded. The cost of
attendance may include tuition
and fees, room and board, books
and supplies, transportation,
and miscellaneous expenses.
The student's school will determine
and certify this amount.
Once the loan is approved, the
funds will be sent to the school.
In most cases, PLUS Loans must
be disbursed, or given out, in at least two
installments. Loans are made
co-payable to both the parent
and the school, with any remaining
funds to be credited to the student's account.
This
table illustrates a sample loan amount.
Interest Rates and Fees
The interest rate is fixed at 8.50% for all new loans guaranteed after July 1, 2006.
Two fees are deducted from
the loan funds and are included
in the amount a student will
pay back. The U.S. Department
of Education charges an origination
fee of 3%, and the loan guarantor
charges a federal default fee
of up to 1%.
Repayment
Repayment of the Federal PLUS
Loan begins within 60 days after
the loan has been fully disbursed
and usually extends up to ten
years. The payment amount is based on the total amount owed, but must be at least $50 per month.
Borrower
Benefits
We offer a variety of programs and repayment
incentives to help
you save money on your Federal PLUS
Loan.
For more details, please tell us the location of the school where your dependent student plans to attend, or currently attends:
How
to Apply
In some cases the school may
require the student to complete
the Free
Application for Federal Student
Aid (FAFSA) or Renewal
FAFSA. You must also complete
a Federal PLUS Loan Application
and Master Promissory Note (MPN).
For more information,
contact our customer service
center to speak with one of
our education loan specialists
at 800-762-1001, Monday through Friday from 8am to 6pm Eastern
time.
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