The Parent Loan for Undergraduate Students or PLUS Loan may be taken out by parents of dependent undergraduate students and by graduate or professional school students. It is an affordable, low-interest loan designed to help students and parents pay for a college education. This is a government loan meaning that it is guaranteed (or insured) by the federal government. Schools that participate in the William D. Ford Federal Direct Loan (Direct Loan) Program offer PLUS Loans.
The maximum amount borrowed may not exceed the total cost of attendance minus any other financial aid received. If the cost of attendance is $6,000, for example, and a student receives $4,000 in aid, only $2,000 may be borrowed. The cost of attendance may include tuition and fees, room and board, books and supplies, transportation, and miscellaneous educational expenses. The student's school will determine and certify this amount.
Interest Rates and Fees
- - For Direct PLUS Loans first disbursed on or after July 1, 2015, and before July 1, 2016, the interest rate is 6.84%. These are fixed interest rates for the life of the loan.
- In addition to the fixed interest rates, there is a loan fee on all Direct PLUS Loans - this is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed:
- - For Direct PLUS Loans first disbursed on or after October 1, 2014, and before October 1, 2015, the loan fee is 4.292%
- - For Direct PLUS Loans first disbursed on or after October 1, 2015, and before October 1, 2016, the interest rate is 4.272%.
Your Direct PLUS Loan enters repayment once your loan is fully disbursed (paid out).
However, if you are a graduate or professional student, your loan will be placed into deferment while you are enrolled at least half-time and for an additional six months after you cease to be enrolled at least half-time.
If you are a parent borrower, you may contact your loan servicer to request a deferment:
- - while you or your child are enrolled at least half-time and
- - for an additional six months after your child ceases to be enrolled at least half-time.
If your loan is deferred, interest will accrue on the loan during the deferment. You may choose to pay the accrued interest or allow the interest to capitalize when the deferment period ends. Your loan servicer will notify you when your first payment is due.
What else should I know about PLUS Loans?
PLUS Loans may be cancelled or forgiven. Before your money is disbursed, you may cancel all or part of your loan by notifying your college. After the loan is disbursed, you may cancel all or part of the loan within a specific time frame. Your promissory note and additional information you receive from your school will explain the procedures and time frames for canceling your loan. You may also qualify for forgiveness of some or all of the loan if you meet certain conditions.
Parent borrowers cannot transfer a Direct PLUS Loan to the child. The parent is responsible for repaying the loan.
Last Edited: September 2015
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