Federal Direct PLUS Loan
Direct PLUS Loans (Parent Loans for Undergraduate Students) are part of the federal Direct Loan Program, offering low-interest loans to students and parents to help pay for a student's college education. The loans are called Direct Loans because they are made directly from the U.S. Department of Education, without going through a bank or other lender.
Unlike other federal student loans, Parent PLUS Loans are not awarded to students. Instead, parents of dependent undergraduates apply for these loans separately if additional funds are needed to cover the student's educational costs.
- You need to be the biological or adoptive parent of the student for whom the Federal PLUS Loan is being borrowed. The spouse of a parent who has remarried (i.e., the student's stepparent) is also eligible to borrow a PLUS on the student's behalf, if his/her income and assets have been included on the student's FAFSA (Free Application for Federal Student Aid). Both parents may get a PLUS loan providing the total does not exceed the student's cost of attendance.
- The student needs to have a current official 2014-2015 FAFSA on file and have received an award notification from our office.
- You and the student must meet the basic eligibility requirements for federal student aid, including:
- be a U.S. citizen or eligible non-citizen.
- not be in default on a federal student loan and do not owe money on a federal student grant.
- The student needs to be an eligible dependent undergraduate student who is enrolled at least half time (six credit hours) in a program leading to a degree or certificate at Salisbury University.
- You must not have an adverse credit history (a credit check will be performed). Parent PLUS Loans are not based on income-to-debt ratio. Parent PLUS Loans are approved for parents who have a good credit rating. The PLUS Loan will be reported to credit agencies and becomes a part of their credit history. Parents who have an adverse credit history will not be approved. Federal regulation classifies an individual as having an adverse credit history if they are 90 days or more delinquent on any debt or the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt during the five years preceding the date of the credit report.
- If parents are denied a PLUS loan due to adverse credit, the student may become eligible to apply for additional unsubsidized Direct Stafford loans. Amounts vary depending on the student's academic level. Please see application procedures below.
- Credit checks are only valid for 90 days, therefore it is best not to complete your PLUS Loan Request until 90 days or less, prior to the student's planned start date of enrollment (June 1st) We begin processing PLUS Loan Requests approximately 3 months prior to the start of enrollment, but after the student has received their financial aid notification and/or their federal eligibility has been assessed. We continue to process PLUS Loan Requests until our office's published deadlines, but never beyond the end of the student's enrollment period.
Borrowing Limits for PLUS Loans
The parent borrower may borrow an amount up to the cost of attendance minus other financial assistance received.
You can estimate your monthly payments with various repayment plans by using the repayment calculators available online from the U.S. Department of Education’s Direct Loan Web site.
Repayment, Interest, and Fees
A Parent PLUS Loan is borrowed by the parent, not the student. Responsibility for repayment rests with the parent. The variable-fixed interest rate for 2014-2015 academic year is 7.21% and is charged on the loan from the date the first disbursement is made until the loan is paid in full. An origination fee of 4.292% is taken off your requested amount. For more information regarding Direct Parent PLUS loans, such as interest rates, processing fees, deferment, repayment, and more please visit Federal Student Aid.
Deadline to Complete 2014-2015 PLUS Loan Request:
- 2014-2015 Academic Year Loan Period: May 13, 2015
- 2014 Fall Only Loan Period: December 11, 2014
- 2015 Spring Only Loan Period: May 13, 2015
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