Federal PLUS Loans
Parents can take out a Federal PLUS Loan to borrow funds on behalf of
dependent, undergraduate students who are enrolled at least half time.
As with Federal Stafford Loans, your college or university will participate
in either:
- The Federal Family Education Loan Program (FFELP) — where
banks, credit unions and savings banks fund the loans.
- The William D. Ford Federal Direct Loan Program (Direct Loan) — where the U.S. Department of
Education provides the money for the loan through the college or
university.
Loan Facts
A few Federal PLUS Loan facts:
- Parents must pass a credit check to borrow these
funds.*
- In most cases, these loans come in multiple disbursements.
- Federal PLUS Loans are not based on financial need.
- Parents are responsible for repayment.
- The interest rate is fixed at 8.50% (FFELP) or 7.90% (Direct Loan).
- The loan limit equals the cost of attendance (COA), minus other
financial aid received.
- There is no grace period; generally, repayment begins within 60
days after the final loan disbursement for the academic year.
However, if you would like, you may defer repayment while the student is enrolled on at least half-time basis and/or elect to take a six-month post-enrollment deferment. You will be responsible for paying the interest that accrues while the loan is in deferment. You have the option to either pay the interest while the loan is in deferment or add it to the principal amount of the loan.
- There is a 3% origination fee and a 1% guarantee fee associated with this loan. Some guarantors will pay the 1% guarantee fee on behalf of the borrower.
- Borrowers may qualify for borrower benefits.
When you defer interest payments, interest will accrue and will be added to your loan; therefore, deferring payments for an extended period of time may substantially increase your loan balance. You should make payments that at least cover your accrued interest to avoid increases in your loan balance.
Find a serviced lender.
*If parents apply for, but are denied a PLUS loan, students will have
the option to borrow additional Unsubsidized Federal Stafford Loan funds.
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Take advantage of borrower benefits and save money on your Federal PLUS Loan.
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