Parent Loans for Undergraduate Students (PLUS)

General Loan Program Requirements
To qualify for this loan program, you must:
A.) Be a parent of a dependent undergraduate student, who:

• demonstrates financial need
• in most cases is a regular student enrolled in an eligible program at least half time and working toward a degree or certificate. There is an exception to this requirement: If the student must take certain course work to qualify for admission into a school's eligible program, you may take out a Federal PLUS Loan for up to 12 consecutive months while the student completes the preparatory course work. The student must be enrolled at least half time.
• has a high school diploma or a General Education Development (GED) certificate, passes a test approved by the U.S. Department of Education, meets other standards your state establishes that the Department approves, or completes a high school education in a home school setting that is treated as such under state law
• is a U.S. citizen or eligible noncitizen
• has a valid Social Security Number (unless the student is from the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau)
• is registered with the Selective Service if required (If the student is a male aged 18 through 25, he must be registered. If he has not registered, he can use the paper or electronic FAFSA to register, or he can call 1-847-668-6888. TTY users for the hearing-impaired can call 1-847-688-2567
• maintains satisfactory academic progress once in school
• certifies that he or she is not in default on a federal student loan and does not owe money on a federal student grant.
• certifies that he or she will use federal student aid only for educational purposes

The student might be ineligible for federal student aid if he or she has been convicted of selling or possessing illegal drugs. Call 1-800-4-FED-AID (1-800-433-3243) to see if the drug conviction law applies to you.

B.) Pass a credit check. If you don't pass, you might still be able to receive a loan if you can demonstrate that extenuating circumstances exist, or if someone you know - who can pass - agrees to endorse the loan and promises to repay it if you don't.

Loan Program Description
Parents can borrow either a Federal PLUS Loan (under the Federal Family Education Loan [FFEL] Program) or a Direct PLUS Loan to help pay their child's education expenses. Direct PLUS Loans are made through the William D. Ford Direct Loan (Direct Loan) Program.

The main difference between FFEL and Direct PLUS Loans is that you receive FFEL funds from private lenders such as banks, credit unions, or other lenders that participate in the FFEL Program. Direct Loan funds come directly from the US Department of Education to your child's school. Often, a school will participate in just one or the other of these programs but sometimes will participate in both. You can receive both FFEL and Direct PLUS Loans, but not both types for your child for the same period of enrollment at the same school. You repay a Federal PLUS Loan to the private lender that made you the loan or to its designated agency. You repay a Federal Direct PLUS Loan to the U.S. Department of Education.

Loan Terms
The loan terms for a PLUS Loan for Parents are as follows:

Maximum Loan Amount: Your child's cost of Attendance minus other financial aid. For example, if your child's cost of attendance is $6,000, and he or she receives $4,000 in other financial aid, you can borrow up to $2,000 in PLUS loans.
Interest Rate: variable (adjusted annually on July 1, does not exceed 9%)
Maximum Loan Length: up to 30 years, depending on the amount borrowed and the repayment plan chosen.
Frequency of Payments: monthly or quarterly. Generally, the first payment is due within 60 days after the loan is fully disbursed.
Prepayment penalties: none
Fees: You will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement* is made. Because of this deduction, you'll receive slightly less than the amount you're borrowing.

Loan Application Process
For a Direct PLUS Loan, you must complete a Direct PLUS Loan application and promissory note, contained in a single form that your child can get from the school's financial aid office. For a FFEL PLUS Loan, you must complete and submit a PLUS Loan application, available from a school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.

Although it's not a requirement, you are encouraged to have your dependent children file a Free Application for Federal Student Aid (FAFSA), so they can receive the maximum student aid for which they are eligible. The student can use the FAFSA on the Web, to apply or she or she can get a paper FAFSA from your high school, local library, postsecondary school, or by calling the Federal Student Aid Information Center at 1-800-4-FEDAID (1-800-433-3243). TTY users for the hearing impaired can call 1-847-688-2567.

Loan Program Contact Information
If you currently have a Direct PLUS Loan and you have questions, you should contact the Direct Loan Servicing Center or go to www.dl.ed.gov. If you currently have a FFEL PLUS Loan, you should contact the lender or agency holding the loan.
800-848-0979

General information about the federal student aid programs, assistance in completing the FAFSA, and information about FAFSA on the Web are available through the Federal Student Aid Information Center.
800-433-3243

TTY users for the hearing impaired can call:
800-730-8913

Callers in locations without access to 800 numbers may call 1-319-337-5665 (this is not a toll free number).

To report fraud, waste, or abuse involving federal student aid funds, please call 1-800-MIS-USED.
800-647-8733

Loan Managing Agency
U.S. Department of Education