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.
There are three steps in applying for a PLUS Loan. The appropriate time window for beginning and completing this process is between June 15 and July 20, 2014.
1. Fill out the Alma College PLUS Loan Application and send it to the Alma College Student Financial Assistance Office.
2. Complete a PLUS Loan master promissory note (MPN) at www.studentloans.gov. You will need your PIN (the same parent PIN you created when filing the FAFSA) to access the MPN. If you do not have a PIN, you may apply for one at www.pin.edu.gov.
*Note: If you would like to initiate a credit check, you may do so at www.studentloans.gov. Please keep in mind that steps 1 and 2 will still need to be completed and the credit check is only valid for 90 days.
You may borrow up to the cost of attendance minus any 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 6.41%. For the most up to date interest rates please visit direct.ed.gov.
All PLUS Loans are subject to an origination fee of 4.3%. 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 and the minimum monthly payment on principal and interest is $50. Payments can be deferred by contacting the Department of Education and requesting deferment.
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:
- Continue pursuing the PLUS Loan with a co-signer. Please contact the Student Financial Assistance Office to initiate this process.
- Reapply for the PLUS Loan with a different parent. The new applicant would need to complete his/her own application and MPN.
- Help your student apply for additional unsubsidized loans through the Federal Direct loan program. Students of parents who are denied a PLUS Loan are eligible for these additional loan funds: $4,000 per year for freshmen and sophomores, and $5,000 per year for juniors and seniors. Please contact the Financial Aid Office to initiate this process.
- Help your student apply for alternative loans.