For: All parents of dependent undergraduates regardless of income. Qualification is based solely on good credit. There are no debt-to-income ratio guidelines or employment verification requirements.
Loan Amounts: Parents may borrow up to the total education cost for the year, minus any other financial aid that the student is receiving. The total education cost can include tuition and fees, housing and food, books and supplies, transportation, and living allowance.
Interest Rate: The interest rate for Direct PLUS Loans is first disbursed on or after July 1,2013 through June 30, 2014 , the interest rate is 6.41% with an interest rate cap of 10.50%. A federal loan fee of 4.204% will be deducted from the loan proceeds.
The Department of Education is responsible for all Parent PLUS Loan credit decisions. Parent PLUS Loan borrowers are required to pass a simplified credit check, meaning that the Department of Education is not looking for a certain credit score or for an extensive credit history but simply the absence of an adverse credit history. Students can view the status of their parents' application by logging in to www.studentloans.gov or by calling Federal Direct Loans at 1-800-848-0979.
The following will cause a Parent PLUS Loan to be denied:
Parents will receive an immediate approval or denial of their application upon electronic completion as well as the loan reference number, which is needed if the parent wishes to pursue an endorser. The Office of Financial Aid will be notified electronically of the credit decision only if the application was completed electronically. Applications are not approved or denied based on the dollar amount requested; therefore, parents should not complete additional applications once a denial is rendered by the Department of Education. Credit decisions are held for 90 days. Once the loan application is denied, the parent must either find an endorser or appeal the credit decision.
The Office of Financial Aid has no control over or influence on the credit decision rendered by the Department of Education. Any and all correspondence regarding credit appeals and endorsers must be sent to the Department of Education.
Approval for the Parent PLUS loan is loan specific. It is possible to be approved for one loan and denied at a later date for a new loan. Denied parents still have two options to obtain the Parent PLUS Loan:
Endorsing a Parent PLUS Loan
Steps to be taken by the endorser (these must be completed electronically; paper addenda will not be accepted):
Disbursement: Usually done in two equal amounts at the beginning of each semester and sent directly to the college. A federal origination fee will be deducted from the proceeds.
Repayment: PLUS loan repayment normally begins within 60 calendar days after the loan has been fully disbursed. In certain circumstances, parents may elect to repay the loan on a graduated repayment schedule, making interest-only payments (minimum is based on term of the loan, but at least $50 per month) for a portion of the repayment term.