PLUS Loans
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 Federal Family Education Loan (FFEL) Program or
in the William D. Ford Federal Direct Loan (Direct Loan) Program offer PLUS Loans.
FFEL Program vs. Direct Loan Program
Schools generally participate in either the FFEL or Direct Loan Program, but some
may participate in both.
- FFEL funds will come from a lender. You will need to choose a lender
if you obtain this loan. Schools that participate in the FFEL Program will usually
have a list of preferred lenders. Borrowers may choose a lender from that list,
or choose a different lender they prefer.
- Direct Loan funds will come directly from the federal government.
No lender choices will need to be made.
Borrowing Limits
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
- Interest rates on PLUS Loans disbursed on or after July 1, 2010, are fixed at 7.9%
for Direct PLUS Loans and at 8.5% for FFEL PLUS Loans.
- Interest is charged on a PLUS Loan from the date of the first disbursement until
the loan is paid in full.
- In addition to the interest rate, a loan fee of up to 4% will be charged. It will
be deducted proportionately from each loan disbursement.
Loan Repayment
- For parent borrowers, the first payment for PLUS Loans disbursed before July 1,
2010, is due within 60 days after the loan is fully disbursed.
- For parent borrowers, the first payment for PLUS Loans disbursed on or after July
1, 2010, may be made either 60 days after the full disbursement or six months after
the student ceases to be enrolled on at least a half-time basis.
- Graduate and professional school students may request to have their loan payments
deferred until graduation as long as they are attending school on at least a half-time
basis. Some may also be eligible for a three-year deferment if they are seeking
but unable to find full-time employment.
- For both parents and students, interest begins to accumulate after the first disbursement
is made.