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How to Apply for a Parent PLUS Loan for the 2016-17 Academic Year

Direct PLUS Loans

Direct PLUS Loans are unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS Loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest accrues from the date of the loan disbursement.

Parent eligibility requirements for a Direct PLUS Loan

The parent applying for a PLUS Loan 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. The student must be a dependent student who is enrolled at least half-time. For financial aid purposes, a student is considered "dependent" if he or she is under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid is submitted. If a student is considered dependent, then the income and the assets of the parent must be reported on the FAFSA.

Additional requirements to receive a PLUS loan

Parent PLUS Loan borrowers cannot have an adverse credit history determined based on a credit check that will be conducted. To learn more about this determination, please refer to the Adverse Credit History section below. In addition, parents and their dependent child must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the Federal Student Aid programs. You can find more information about the PLUS loan requirements at Funding Education Beyond High School: The Guide to Federal Student Aid.

Applying for a PLUS Loan and the Master Promissory Note (MPN)

When borrowing a PLUS Loan for the first time, the parent must complete a PLUS Application and Master Promissory Note (MPN). The MPN is a legal document through which the parent promises to repay the loan(s) and any accrued interest and fees to the Department of Education. It also explains the terms and conditions of the Parent PLUS Loan(s).

The MPN can be completed electronically at www.studentloans.gov. If the parent is borrowing Direct PLUS Loans for more than one student, they will need to complete a separate MPN for each student. Only one MPN is needed for all future PLUS loans borrowed for the student. To complete an MPN online, the parent will be required to use their Department of Education-issued PIN (not the student’s).

The parent will receive a disclosure statement with specific information about any loan that the school plans to disburse under the MPN, including the loan amount and loan fees, and the expected loan disbursement dates and amounts.

Adverse Credit History

To be eligible for a PLUS Loan, the parent must not have adverse credit history, which the Department will check at the time of application. If the parent is found to have an adverse credit history, they may still borrow a PLUS Loan if they get an endorser who does not have adverse credit history. An endorser is someone who agrees to repay the loan if the parent does not. The endorser may not be the student on whose behalf a parent obtains a PLUS Loan.

In some cases the parent may also be able to obtain a PLUS Loan by documenting that there are extenuating circumstances related to the adverse credit history.

In each situation, the parent must complete PLUS loan counseling prior to receiving the PLUS loan. Read more information about the PLUS Loan Adverse CreditAdobe Portable Document Format (PDF) icon.

Loan limits, interest rate, and loan charges

There are no set limits for Direct PLUS Loans, but parents may not borrow more than the cost of the student's education minus any other financial aid received, such as a Direct Subsidized or Unsubsidized Loan. The school will determine the maximum amount that can be borrowed.

The interest rate for Direct PLUS Loans is a fixed rate of 6.31% for loans awarded after July 1, 2016. The interest rate for the 2017-2018 academic year will be provided by the Department of Education on or before June 30, 2017. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of the loan's first disbursement.

In addition to interest, a loan origination fee is assessed that is a percentage of the principal amount of each Direct PLUS Loan. This fee is deducted before the loan funding is received. The current origination fee is 4.276%.The loan origination fees for the 2017-2018 academic year will be provided by the Department of Education on or before June 30, 2017.

How a loan is disbursed (paid out)

The Parent PLUS Loan amount will be disbursed to the parent in two equal disbursements. The timing of the disbursements will be based on the student’s intended attendance at Wor-Wic Community College. Disbursement dates will be determined at the time of awarding.

If the loan disbursement amount exceeds the student’s institutional charges, the remaining balance will be provided to the parent in the form of a check. Notification of disbursement will be made at the time of disbursement and will provide information about how to cancel all or part of the loan.

Using the loan for education expenses

The loan funding received through a Parent PLUS Loan must be used to pay for education expenses. Education expenses include school charges such as tuition, fees, and indirect expenses such as books, supplies, equipment, dependent child care expenses, transportation, and rental or purchase of a personal computer.

The information on this site was retrieved from https://studentaid.ed.gov/sa/.

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