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   Funding Education Beyond High School: The Guide to Federal Student Aid 2008-09
Funding Education Beyond High School: The Guide to Federal Student Aid 2006-07
Federal Student Aid at a Glance Education after High School
Reducing the Cost of Education Am I Eligible
Types of Federal Student Aid Other Aid Sources
Be Careful Getting your PIN
Completing the FAFSA Student Aid Report
Information for Borrower Loan Repayment
Postponing Loan Repayment Consolidating your Loans
Loan Discharge(Cancellation) State Higher Education Agencies
Important Terms Other Publications
 


Types Of Federal Student Aid (Continued)
Grants

Federal Work-Study

Loans

PLUS Loans

Loan Summary

PLUS Loans
Parents of dependent students and students pursuing a graduate or professional degree can borrow from the PLUS Loan program. The terms and conditions applicable to parent PLUS Loans (made to parents of dependent students) also apply to PLUS Loans made to graduate and professional degree students. These terms and conditions include: a requirement that the applicant not have an adverse credit history; a repayment period that begins on the date of the last disbursement of the loan; and a fixed interest rate of 8.5 percent for FFEL PLUS Loans and 7.9 percent for Direct PLUS Loans. As with PLUS Loans made to parent borrowers, eligible graduate and professional degree students may borrow under the PLUS program up to their cost of attendance, minus other financial aid received.

Unlike parent PLUS applicants, graduate and professional degree student PLUS applicants must file a FAFSA. In addition, graduate and professional degree students must have their annual loan maximum eligibility under the Stafford Loan program determined by the school before they apply for a PLUS Loan.

How do parents and graduate and professional degree students apply for a PLUS Loan?
Direct PLUS Loan: FFEL PLUS Loan:
  • The school must participate in the FFEL Loan Program.
  • Complete a FFEL PLUS Loan application and Promissory Note, available from the school, lender or state Guaranty Agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.
Although not a requirement if the student will not be receiving any other federal student aid, parents are encouraged to have their dependent children submit a FAFSA so their children can receive the maximum student financial aid they’re eligible for. Graduate and professional degree students applying for a PLUS Loan are required to submit a FAFSA.

What are the eligibility requirements for PLUS Loans?
PLUS applicants must meet the general eligibility requirements for federal student aid. If a parent is borrowing on behalf of a dependent undergraduate student, the student must also meet these general eligibility requirements. For example, the PLUS applicant and the student must: Are there any other requirements?
A PLUS Loan applicant must not have an adverse credit history. (A credit check will be conducted.) A PLUS Loan applicant who has an adverse credit history still may be able to receive a loan by documenting existing extenuating circumstances or by obtaining an endorser who does not have an adverse credit history. An endorser or co-signer is someone who agrees to repay the loan if the borrower fails to do so.

Do we need to find a lender?
Direct PLUS Loan—No. The U.S. Department of Education is the lender. Your school assists in administering the Direct Loan Program by:
  • Distributing the loan application,
  • Processing the loan, and
  • Disbursing the loan funds.
FFEL Program—Yes. You will need to find a participating lender. Your school will give you the option of choosing a lender from its preferred lender list. The preferred lender list is only a starting place when shopping for financing. How much can a parent or graduate and professional degree student borrow under the PLUS Loan program?
The maximum PLUS Loan amount that a parent or graduate and professional degree student can borrow is the student’s cost of attendance minus any other financial aid the student receives.

If a parent obtains a PLUS Loan to help pay for a dependent student’s education, who receives the loan money—the parent or the student?
  • The school will first apply the PLUS Loan funds to the student’s school account to pay for tuition, fees, room and board and other school charges.
  • If any loan funds remain, they will be sent to the parent borrower, unless the parent authorizes the school to hold the funds or release them to the student.
  • Any remaining loan funds must be used for your education expenses.
 Can a borrower cancel a PLUS Loan even after signing the Promissory Note and agreeing to the terms of the loan?
Yes. A borrower can cancel a PLUS Loan the same way that a borrower would cancel a Perkins or Stafford Loan.

Other than interest, are there any fees or charges to get a PLUS Loan?
Yes. There is a fee of up to 4 percent of the loan amount.

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U.S. Department of Education | Federal Student Aid