The Federal Direct PLUS Loan is a federal educational loan program which provides low-interest loans, available to parents (Parent PLUS Loan) of dependent undergraduate students and to graduate students (Grad PLUS Loan). The Federal Direct PLUS Loan is not a need-based loan or based on a specific income level. However, borrowers must demonstrate a satisfactory credit rating to participate. The borrower and student must be U.S. citizens, permanent residents, or eligible noncitizens and the student must be attending at least half-time (six credits per semester) in a degree-granting program.
The Federal Government provides a comprehensive explanation of all Federal Direct PLUS Loan provisions, terminology, and repayment plans on their Student Aid on the Web website. Click on the "Federal Student Aid Programs" button on the left hand side of the page for information on specific grants and loans. The following information summarizes the basic Federal Direct PLUS Loan terms and conditions.
General Federal Direct PLUS Loan Provisions
PLUS borrowing is limited to the cost of education minus other financial aid resources. For the 2012-13 academic year, PLUS loans have a fixed interest rate of 7.9% which is set by the federal government. Repayment of principle and interest generally begins 60 days after full disbursement. The interest is not subsidized while the student is in school and will begin to accrue with the first disbursement. Federal regulations require 4% Federal fees be deducted from the loan at disbursement.
To participate, borrowers must demonstrate a satisfactory credit rating according to federal guidelines and credit standards. An applicant's credit standing is determined upon receipt of a PLUS Loan application. Applicants determined to have an adverse credit history, may receive a loan if the applicant obtains a credit worthy endorser or successfully appeals a credit decision.
The PLUS Loan repayment period begins 60 days after full disbursement of the annual loan amount. For example, a loan made for the 2012-13 academic year would be “fully disbursed” with the spring semester 2013 loan payment in early January, making the first loan payment of principle and interest due in early March 2013.
Grad PLUS Loan borrowers enrolled on at least a half-time basis (6 or more credit hours) may receive a deferment for repayment of principle and interest during enrollment, and for up to 6 months after leaving school.
Parent PLUS borrowers may defer principle and interest payments while the undergraduate student on whose behalf they borrowed is in school and for a six-month period after the student graduates or drops below half-time enrollment. Payments can also be deferred while the parents themselves are enrolled in college at least half-time in a degree-granting program.
PLUS Application Procedures
To receive a PLUS Loan, the Free Application for Federal Student Aid (FAFSA) must be filed annually for the student. The borrower must complete a PLUS Loan Master Promissory Note (PLUS MPN) and the borrower must annually request a loan, and demonstrate satisfactory credit.
Although the FAFSA and a loan request must be completed for each academic year, the PLUS MPN needs to be completed only once. The PLUS MPN is designed to serve as a multi-year note, over a maximum ten-year period, and can be used to process the borrower's PLUS Loan eligibility in subsequent years. Therefore, a borrower will need to complete the PLUS MPN only once during the student's enrollment at Alfred University.
Loan Counseling Required for Graduate Students: Entrance Counseling is a federal requirement for all Graduate PLUS borrowers. This counseling session will help graduate students understand the terms and provisions of the PLUS Loan and their rights and responsibilities as a borrower. PLUS Entrance Counseling only needs to be completed once, prior to receiving the first Grad PLUS Loan.
- File the FAFSA.
- Complete the PLUS Loan MPN and/or Request a PLUS Loan. You will need your Federal Student Aid (FAFSA) PIN number to enter the website.
- Complete the required Graduate Student PLUS Entrance Counseling. You will need your Federal Student Aid (FAFSA) PIN number to enter the website.
Please Note: Both the entrance counseling and the PLUS Loan MPN must be completed before your loan can be certified. Also, Alfred University will be notified electronically when you have completed entrance counseling.
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