COLLEGE FINANCIAL AID. PLUS LOANS

PAYING FOR COLLEGE

Parents can borrow a PLUS Loan to help fund your education expenses if you are a dependent undergraduate student enrolled at least 1/2 in an eligible program at an eligible school.

PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Your parents can get either loan, but not both, for you during the same enrollment period. They also must have an acceptable credit history.

How To Apply:

For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your school’s financial aid office.

For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your lender, school, or your state guaranty agency. After the school completes its part of the application, it must be sent to a lender for evaluation.

Your parents generally will also be required to pass a credit check. If your parents don’t pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if your parents fail to do so. Your parents may also qualify for a loan without passing the credit check if they can demonstrate that extenuating circumstances exist. You and your parents must also meet other general eligibility requirements for federal student financial aid.

How much can be borrowed:

The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid, your parents can borrow up to $2,000.

Who gets the loan money:

Either the United States Department of Education (for a Direct PLUS Loan) or your parents’ lender (for a FFEL PLUS Loan) will send the loan funds to your school.

Your college might require your parents to endorse a disbursement check and send it back to the school. In the majority of cases, the loan will be disbursed in at least 2 installments, and no installment will be greater than 1/2 the loan amount. The funds will 1st be applied to your tuition, fees, room and board, and other school charges. If any loan funds are left, your parents will receive the amount as a check or in cash, unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds can only be used for your education expenses.

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Your parents will pay a fee of up to four percent of the loan, deducted proportionately each time a loan disbursement is made.