William D. Ford Federal Direct PLUS Loan

The Federal Direct PLUS Loan is non-need-based loan in the parent’s name, not the student’s. The Direct plus Loan is non-need based and requires credit approval. Eligible parents must be the student’s biological or adoptive parent or the student’s stepparent, if the biological or adoptive parent has remarried at the time of application.


Eligibility:
• Completed FAFSA for student (must be done each year)
• U.S. citizen or permanent resident
• Parent must be student’s biological or adoptive parent or the student’s stepparent, if the biological or adoptive parent has remarried at the time of application
• Not have previous defaults on a federal loan
• Student must be enrolled or plan to enroll at least half-time (6 or more credits)
• Student must be maintaining satisfactory academic progress.
• Parent borrower must be credit approved
• Maintain satisfactory academic progress

Loan Approval:
The credit check process is based on the credit-worthiness of the parent borrower. This loan does not have a debt to income ration requirement. PLUS Loans are available regardless of income or assets, and no collateral is required. If the parent is denied a PLUS based on credit-worthiness, the student is able to borrow an additional $4000 (for freshmen and sophomores) or $5000 (for juniors and seniors) of unsubsidized Stafford. A PLUS denial is required before we can process the additional unsubsidized Stafford.

Per Year Maximum:
Total Cost of Attendance- minus students other financial aid. Example: a standard Cost of Attendance for an on-campus student in 2010-11 is $36,590. If the student receives $20,000 in financial aid, the parent would be eligible for the difference of $16,590 in a Direct PLUS Loan.

Cumulative Maximum:
The Direct PLUS loan does not have a cumulative maximum. This loan, however, does require credit approval and cannot exceed the per year maximum which is the students Cost of Attendance minus their other financial aid.

Repayment:
Standard repayment is 10 years, but can be extended up to 30 years depending on the repayment plan that is selected. Repayment begins 60 days after the full loan amount is disbursed. The parent borrower is responsible for making payments on this loan while a student is in school. Parent borrowers have the option to defer payments on principal and/or interest for PLUS loans that were originated after July 1, 2008, provided the student is enrolled at least half time each semester (6 or more credits). If the parent borrower wants to defer payments they must call the Direct Loan Servicing Center (800-848-0979) after the loan has been disbursed to request a deferment. Interest Rate: Direct Loan interest rates are set by Congress and are fixed at 7.9%. Interest on a Direct PLUS Loan begins as soon as the first disbursement is made. Loan Fees: Direct PLUS Loans have a 4% origination fee. Direct PLUS Loans do, however, have an up-front rebate* of 1.5%, resulting in a net origination fee of 2.5%. This means that 2.5% will be deducted from the loan at the time of disbursement.
(Example: On a $1000.00 Direct PLUS loan the student will receive a loan disbursement of $975.00)

*The rebate is an up-front benefit the parent borrower receives from the US Department of Education. This rebate reduces the amount of loan fees that are deducted from the loan at the time of disbursement. This means that the Direct PLUS borrower see more money upfront. By receiving this rebate up front it reduced the 4% fee that would be deducted from a borrower’s loan disbursement and reduces it to 2.5%. This rebate is given up front to Direct PLUS borrowers, but does require that the borrower make their first 12 monthly payments on time. If the Direct PLUS borrower fails to meet the twelve on-time payments, the rebate fee is capitalized into the principal of the outstanding loan balance. This means that the rebate fee will be added on back on to the total amount of the loan.

How to apply




FAFSA Code: 002346

Information For:

current students
faculty and staff		 parents
alumni		 high school students
admitted students