The Parent PLUS Loan
The Parent Loan for Undergraduate Students (PLUS) is available for eligible parents to borrow on behalf of their dependent, undergraduate student. The student must be enrolled at least half-time (six credits) in an eligible degree-seeking program.
The PLUS Loan is a credit-based loan. This means that even though a student may be awarded a PLUS Loan as part of their award package, the borrower must have his or her credit approved. Parent PLUS Loan credit decisions are based on adverse credit.
The PLUS Loan is not based upon "need," but it is recommended that the student and parent complete the FAFSA to expedite the processing of the loan and to ensure that the student receives consideration for all other forms of aid for which he or she may be eligible. Repayment of the PLUS Loan begins within sixty (60) days of disbursement. The loan is in the parent borrower's name rather than the student's.
For more information on the Parent Plus Loan, visit the U.S. Department of Education's website.
- Lower interest rate than most private educational loans.
- Fixed Interest rate: 7.21% percent for 2014-2015.
- Possible program incentives to lower the rate.
- Interest rates are "variable-fixed." Learn more.
- Eligibility based on review of "adverse credit" rather than "credit scoring."
- Lack of credit history or insufficient credit history is not considered.
Amount of eligibility determined using the following formula
- Cost of Attendance (COA) - All Other Aid = PLUS Loan Eligibility
- Can be consolidated with other federal loans upon graduation.
In order to qualify to receive a student loan (federal or private), a student must be enrolled and attend classes/submit assignments on at least a half-time basis, regardless of the stage of his or her program. Half-time is defined as at least six hours per semester for undergraduate students.
If a student plans on dropping below these levels, he or she should contact Central Financial Aid before making any final decision or submitting paperwork. Your counselor will review with you how dropping below half-time status will affect your loan eligibility.
The total loan amount a student is eligible for is based on the following formula:
Cost of Attendance (COA) - Aid (scholarships, etc.) = Total Loan Eligibility
The following formula determines a student's eligibility for a Parent PLUS Loan:
COA - Expected Family Contribution (EFC) - Aid - Stafford Loans = Parent PLUS Loan Eligibility.
APPLYING FOR AID
Students are encouraged to begin the financial aid application process in conjunction with the required admissions application activity. Although a financial aid award cannot be made until a student is accepted, all necessary paperwork will be on file to expedite the awarding process upon acceptance. Students interested in borrowing a Parent PLUS Loan should complete the Free Application for Federal Student Aid (FAFSA) as soon after January 1 as possible or when the previous years taxes are completed. Central Financial Aid suggests submitting the FAFSA by March 15 to ensure timely processing and arrival of funds for the fall semester.
The FAFSA may be submitted one of two ways. The student may fill out the paper application or complete the FAFSA online . Submitting the FAFSA online greatly reduces the processing time of the application.
Early submission of applications helps to ensure the arrival of funds by the final payment deadline. It also allows for necessary information to be available when Central Financial Aid begins the awarding process.
What is Adverse Credit?
Unlike private alternative loans, Parent PLUS Loans are not based on credit score. This difference should make the loan more easily obtainable for those with little or no credit history.
Adverse credit is defined to mean as of the date of the credit report, the applicant:
- Is 90 or more days delinquent on any debt (including unpaid collection accounts with a balance greater than $0 and charge-offs); or
- Has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a debt during the five years preceding the date of the credit report.