Who is Eligible for a Parent PLUS Loan?

You must be the student's biological or adoptive parent or the student's stepparent. Both parents may get a PLUS loan as long as the total aid package does not exceed the student's cost of attendance. A stepparent is eligible to borrow a PLUS loan if their income and assets would be taken into account when calculating the dependent student's EFC. A legal guardian is not considered a parent for FSA purposes. (FSA Handbook)

 

How Do I Apply for a Parent PLUS Loan?

All eligible parents of dependent undergraduate Incoming, Transfer, and Continuing/Current students interested in applying for a Federal Parent PLUS loan will need to follow these instructions:

 

If your parent would like to obtain a Federal Direct Parent PLUS Loan, a FAFSA is required for the student.  Parent PLUS Loans will be created with the Department of Education beginning mid-July.  Since a credit check is performed when you apply for a Parent PLUS Loan, and it is only good for 90 days, it is best to wait until July before submitting your application.

           

   The PLUS Loan application process is two separate steps. 

       1.  One parent should complete the Parent PLUS application online at

            www.studentloans.gov, using your parent FAFSA PIN # to log in.

       2.  After applying online, the parent (borrower) needs to sign a Master Promissory

            Note (MPN) at www.studentloans.gov.

 

• A credit check is done before you complete the entire PLUS loan application.  If approved, you can proceed by completing the loan application and signing an MPN.  If denied, you have the option to submit endorser information (a co-signer for the parent loan).  If you choose to not use an endorser, your student may be eligible for additional Federal Unsubsidized Stafford Loan.

• During the online application process at www.studentloans.gov, the borrower may request an "in-school deferment" option that will be in effect while the student is enrolled full-time. Interest will accumulate on the loan during this deferment period. You can also contact the Direct Loan Servicer at 1-800-848-0979 to request a PLUS “in-school deferment”. Otherwise, the PLUS Loan will begin repayment 60 days after the loan is fully disbursed into your student’s account.
• Shortly after the PLUS Loan is processed, the borrower should receive a Loan Disclosure Statement from the William D. Ford Federal Direct Loan Program detailing the terms and conditions of the Federal Parent PLUS Loan.
• The Parent PLUS loan you completed online at www.studentloans.gov will be sent to Messiah College electronically.
  

 

NEW FOR 2012-2013: There is a 4.204% fee on all Federal Parent PLUS Loans, so please consider this in your calculations for billing purposes. Example: A $6000 PLUS Loan will net a disbursement of $5745. ($6000 x .95796 = $5747.)   These funds are wired to us and go directly into your student's account.

 

If you have any problems with the www.studentloans.gov website, please contact Direct Loans at 1.800.848.0979.

 

What are the Terms and Conditions of a Federal PLUS Loan?

1. 7.9% fixed interest rate
2. 4.204% Origination fee.
3. Repayment:
1. Will begin 60 days after final disbursement is made, or
2. Payments can be deferred while student is enrolled at least half-time.
1. Call Direct Loan Servicing to have the loan deferred (deferral needs to be renewed each year) at 1.800.848.0979.
2. You can make interest only payments during deferment, if you choose.
3. Standard Repayment term is 10 years.
4. After the Federal PLUS loan has been approved by Direct Loans, a Disclosure Statement from the William D. Ford Federal Direct Loan Program will be mailed to the borrower at the address on the PLUS loan application. This Statement details all the terms and conditions of the Federal PLUS loan.

How does a Federal PLUS loan compare to a Private/Alternative loan?

 

If you aren't sure whether to take a Parent PLUS or an alternative/private student loan, please take a look at the comparison worksheet  here.

 

For more information regarding Federal Direct Loans, please click here. 

 

Are there any other Parent Loans?

 

Yes, there is a Wells Fargo Student Loan for Parents.  This is a private loan with a choice of either fixed or variable interest rate. For more information, please check the Wells Fargo website. 

APR examples can be found on the Disclosure Statement here.

 

If you have any other questions in regards to the PLUS loan, please feel free to contact the Financial Aid Office at 1.717.691.6007 or email finaid@messiah.edu.