Federal PLUS Loan Program (For Parents and For Graduate or Professional School Borrowers)

* Before July 1, 2010, Stafford, PLUS, and Consolidation Loans were also made by private lenders under the Federal Family Education Loan Program.

Parent Borrowers

If you are a dependent undergraduate student, your parents may borrow money with low interest for your college education through the Federal PLUS Loan Program. The financial aid office at the college you attend can tell your parents what they need to do to apply, if they decide to borrow. For more information, refer to the Federal PLUS Loan Program page within the Parent Zone.

Graduate and Professional Student Borrowers

Graduate and professional students may also borrow through the Federal PLUS Loan Program. For more information, refer to the Federal PLUS Loan Program page within the Student Zone's Advanced Degree section.

Borrowers who wish to take advantage of this program do not need to demonstrate financial need. Repayment of principal and interest begins within 60 days after the funds are disbursed, with no grace period. Under the Federal PLUS Loan Program, borrowers may defer the payment of principal under certain circumstances. Borrowers should contact their loan holder (Direct Loan Servicing Center for Federal Direct Loans, or the lender for loans made through the Federal Family Education Loan Program) for more information.

Eligibility

To be eligible, borrowers must

• Meet the same eligibility criteria as those required for the unsubsidized Federal Stafford Loan
• Be subject to a credit check (loans will be denied to borrowers with adverse credit, as defined by federal regulations)

How to Apply

The financial aid administrator at the college determines your parent’s eligibility for the loan and can provide the proper application documents.

A chart, which conveniently outlines loan limits, interest rates and applicable fees in one document (for loans first disbursed on or after July 1, 2010 through June 30, 2011), is available here at College Zone. Specific details regarding each of these topics are provided in the following sections.

Current Interest Rate for Federal PLUS Loans

The current Direct PLUS loan interest rate is fixed at 7.9%.

Federal PLUS Loans disbursed through the Federal Family Education Loan Program on or after July 1, 2006 and prior to July 1, 2010 have a fixed interest rate of 8.5%.

Loans disbursed prior to July 1, 2006 (including loans made through private lenders via the Federal Family Education Loan Program) have a variable interest rate, adjusted annually on July 1, with a maximum of 9%. The Federal PLUS loan variable interest rate for July 1, 2010 - June 30, 2011 is 3.27%.

Loan Limit

The annual maximum amount that can be borrowed under the Federal PLUS Loan Program is equal to the Cost of Attendance minus (-) financial aid received. There is no aggregate maximum.

Fees and Disbursements

A federally mandated loan fee of four percent charged on loan proceeds prior to disbursement.

Loans are generally disbursed in at least two installments. Check with the financial aid office at your college to learn how your loan(s) will be disbursed.

Loan proceeds are electronically transmitted to the institution.

Rights and Responsibilities, Repayment, Deferments
 
When you borrow a Federal PLUS Loan, you should be aware of the borrowing basics which are outlined in the Student Zone at collegezone.com.