The Federal PLUS Loan
Even with Stafford Loan awards, most families
need to find other sources of funding to pay for their child’s total
educational cost. Federal
PLUS Loan offers a low-interest, collateral-free way for parents of
dependent students and graduate and professional school students to
pay for their education, including transportation, housing, and
food. Interest payments may be tax deductible. The PLUS loan is a
preferred funding source for parents and now graduate and
professional school students.
At a Glance
|
Parent PLUS Loan |
Graduate PLUS Loan |
Interest |
Fixed at 8.50%. Borrowers may receive a 0.25% interest rate reduction with automatic monthly payments.
|
Fixed at 8.50%. Borrowers may receive a 0.25% interest rate reduction with automatic monthly payments.
Graduate and Professional school students may apply without a
co-borrower. |
| Origination Fee |
3.00% |
3.00% |
| Guarantee Fee |
0%* |
0%* |
Student eligibility |
• At least half-time student
• U.S. Citizen or non-Citizen permanent resident
• Dependent undergraduate students |
• At least half-time student
• U.S. Citizen or non-Citizen permanent resident
• Dependent undergraduate students
• Graduate and professional students without a co-borrower. |
Parent eligibility |
• U.S. Citizen or non-Citizen
permanent resident
• pass a basic credit check |
• U.S. Citizen or non-Citizen
permanent resident
• pass a basic credit check |
Need Based |
No |
No |
Funding Limit |
Total educational cost
(including transportation, housing, food, and books) minus other
award amounts. |
Total educational cost (including
transportation, housing, food, and books) minus other award
amounts. |
Interest tax deductible |
Yes |
Yes |
Loan deferment option while
student is in school |
Yes |
Yes |
Co-borrower required |
No |
No |
Interest paid by government |
No |
No |
Credit check required |
Yes |
Yes |
Collateral required |
No |
No |
FAFSA required |
Maybe (check with financial aid
office) |
Maybe (check with financial aid
office) |
Minimum monthly payment |
$50 |
$50 |
Loan term |
10 years |
10 years |
Prepayment penalty |
No |
No |
* StuFund will utilize no-fee guarantors when possible. If this is not available, a guarantee fee of up to 1% will be assessed on your loan.
Interest rates and terms
Currently, the interest rate is fixed at 8.50%.
Upon school certification, no payments are required while the
graduate or professional student is attending school as least
half-time.
Interest payments may be tax deductible.
Repayment terms
For the Parent PLUS loan, borrowers have the option of beginning repayment 60 days after the loan
is fully disbursed or six months after the dependent student on
whose behalf the parent borrowed ceases to be enrolled on at least a
half-time basis. If you experience financial hardship while your
student is in school, you can apply for loan payment deferment or
forbearance.
For graduate and professional students, the PLUS loan will be
placed into in-school deferment status while the student is
attending school at least half-time.
PLUS Loans are repaid over a 10 year period.
Eligibility
-- Parents or step-parents of dependent undergraduate students
-- Graduate and professional students without a co- borrower
-- U.S. citizens or non-Citizen permanent resident
-- Qualifying score on basic credit check
Steps
-
Complete and send FAFSA form if your school requires it.
Graduate and professional students are required to complete the
FAFSA and apply for the maximum amount they are eligible for
under the Stafford Loan Program.
- Complete the PLUS application, using school
information and personal information, including you and your
child’s social security number and driver’s license number, or
Alien ID number, loan information and requested award amount.
- After your loan is approved, your PLUS loan will
be sent to your school for disbursement to you.
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