Parents may want to consider a Federal PLUS Loan (Parent Loan for Undergraduate Students) to assist in paying the costs of college. This is a government-sponsored loan for parents (including adoptive or step-parents) of dependent undergraduate students. Parents of all income levels are eligible; however, new regulations require a credit-worthiness evaluation.
Our office will begin processing applications on March 29th, 2015. The application and Master Promissory Note should be completed and submitted no later than July 20th to avoid delays in funding to cover the Fall term bill in August.
There are three steps in applying for a PLUS Loan:
1. Fill out the FAFSA.
2. Fill out the Alma College PLUS Loan Application and send it to the Financial Aid Office.
3. Complete a PLUS Loan master promissory note (MPN) at www.studentloans.gov. You will need your FSA ID (the same parent FSA ID you created when filing the FAFSA) to access the MPN. If you do not have a FSA ID, you may apply for one at https://fsaid.ed.gov.
*Note: Our office can begin running the credit check portion on March 29th as credit decisions are valid for 180 days.
**If you would like to initiate just the credit check on your own, you may do so on the U.S. Department of Education’s website: www.studentloans.gov. Please keep in mind that steps 1, 2, and 3 will still need to be completed and the credit check is only valid for 180 days.
You may borrow up to the cost of attendance minus any other aid. The maximum amount of Federal Direct Loan eligibility will be counted as aid whether or not the student decides to accept those student loans. Please refer to your financial aid package to determine your individual PLUS Loan borrowing limits.
This is a fixed rate loan at 6.84%. For the most up to date interest rates please visit direct.ed.gov.
All PLUS Loans are subject to an origination fee of 4.272%. This fees deducted from the loan proceeds at the time funds are disbursed. For the most up to date fees please visit direct.ed.gov.
PLUS Loans are sent directly to the school in two disbursements for the Fall and Winter semesters. A separate PLUS Loan must be originated for the Spring Term. The loan will be credited to the student’s account balance and any excess will be refunded at your discretion.
Repayment of your PLUS Loan begins within 60 days after disbursement. The maximum repayment period is 10 years. Payments can be deferred by contacting your assigned loan servicer and requesting deferment. After your first loan disbursement, go to www.nslds.ed.gov to find your loan servicer.
Parents with adverse credit history, those who have accounts more than sixty days delinquent, or those who have filed bankruptcy in the past may be denied a PLUS Loan. If you are notified of a denial, you can still assist your student with the college investment in the following ways:
Appeal – Appeal the credit decision by contacting the Department of Education at (800) 557-7394. Contact the Financial Aid Office if the credit decision has been appealed. The parent borrower must also complete PLUS Counseling on www.studentloans.gov if the credit decision is appealed.
Endorser – Continue the application with an endorser (co-signer). The endorser must complete the endorser addendum on www.studentloans.gov. The parent must complete PLUS Counseling and a Master Promissory Note on www.studentloans.gov.
- The endorser will need the parent borrower’s last name and either the endorser code OR the Loan/Award ID Number and a Federal Student Aid (FSA) ID.
- The endorser code may be found in the confirmation email you received from Direct Lending, or found by logging into the studentloans.gov website and selecting “Direct PLUS Loan Requests” located on the left navigation bar.
- Contact the Financial Aid Office if the application has been approved with an endorser.
- Reapply – Reapply for the Parent PLUS loan with a different parent by completing a new application. The new applicant would need to complete his/her own MPN.
Additional Federal Unsubsidized Loan– A Parent PLUS loan denial makes the student eligible for an additional Federal Unsubsidized loan of $4,000 per year for Freshman/Sophomores or $5,000 per year for Junior/Seniors. The student would need to accept the loan through the student portal by selecting the Financial Aid tab and then MANAGE MY LOAN.
- NOTE: If at a later time during the academic year, either parent becomes eligible or is approved with a co-signer for a Federal Parent PLUS Loan, the additional Unsubsidized Loan will be canceled as the student will no longer be eligible.
Alternative Loan – Help your student apply for alternative loans. Alternative educational loans are available to help students meet education costs not covered by other aid.
- What are the differences between a Federal Parent PLUS Loan and an Alternative loan? See our comparison sheet.
Still Have Questions?
See our Parent PLUS Frequently Asked Questions page for answers.