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Federal Direct Plus Loans (Parent Loans)

The Financial Aid Office (FAO) assists students by awarding financial aid to help pay for post-secondary education. Financial aid is awarded as grants, scholarships, loans and student employment from various federal, state, institutional and private sources. The Federal Direct Plus Loan for Undergraduate Students (PLUS) is available to parents of dependent students to provide the expected parent contribution for their student's educational expenses, and/or make up the difference between the cost of attendance and the financial aid awarded the student. This loan is not based on financial need. The parents pay the costs for this loan, and interest charges and repayment begin upon disbursement. The Financial Aid Office is responsible for determining student and parent eligibility, awarding the loan, ensuring a Master Promissory Note is completed by the borrower, and disbursing federal funds to the borrower.

ELIGIBILITY
The parent borrower and their student must meet the following criteria to receive a Federal Direct PLUS Loan.

The student and parent borrower must:
• Be U.S. citizens or other eligible status (permanent resident).
• Not owe a defaulted student loan or a federal grant repayment.
• Meet other requirements as applicable.

The student must:
• Be in compliance with the college's Satisfactory Academic Progress Policies.
• Be enrolled at least half-time (audited courses are not eligible to determine enrollment status).

The parent borrower must:
•Not have an adverse credit history.

LOAN AMOUNTS
Parents may borrow a Federal Direct PLUS Loan for an amount up to the student's educational expenses minus other financial aid.

LOAN FEES
Parents will pay a fee of up to 4 percent of the loan deducted proportionately each time a loan disbursement is made.  For a Federal Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they don't make their loan payments when scheduled.

INTEREST, REPAYMENT AND DEFERMENTS
For Federal Direct PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed at 7.90.

Under some circumstances, your parents can receive a deferment on their loans.  If they temporarily cannot meet the repayment schedule, they can also receive forbearance on their loan, as long as it is not in default.  During forbearance, their payments are postponed or reduced.  However, since all Federal Direct PLUS Loans are unsubsidized, your parents will be charged interest during periods of deferment or forbearance.  If they don't pay the interest as it accrues, it will be capitalized.  
 
APPLICATION PROCEDURES
In order to apply for the majority of financial aid programs, the student must complete and submit the free application for Federal Student Aid (FAFSA) for the academic year he or she plans to attend.

Although completion of the FAFSA is not required for a parent to receive a Federal Direct PLUS Loan, the Financial Aid Office strongly encourages students to file the FAFSA.  Filing is easiest if done electronically at the U.S. Department of Education’s web site (http://www.fafsa.gov). Students and parents of dependent students may request a Personal Identification Number (PIN) at the U.S. Department of Education’s web site (http://www.pin.ed.gov).  The PIN serves as an electronic signature, which significantly improves the processing time. A paper signature page must be downloaded, signed and mailed for students or parents who don't have a PIN.

PLUS LOAN PROCEDURES
Parents must submit a Master Promissory Note (MPN) at http://studentloans.gov. The Federal Student Aid PIN must be used to complete the application. Parents completing a Federal Direct PLUS eMPN must use their own PIN number, and not the child’s PIN number.

  1. The Financial Aid Office determines eligibility.
  2. The college disburses an approved Federal Direct PLUS loan in semester installments.


More information about Federal Direct PLUS Loans is available at http://studentaid.ed.gov

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