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Federal PLUS (Parent) Loans
PLUS Loans are low cost federally insured loans made to parents of dependent undergraduate students. Parents may borrow a PLUS Loan to meet their student's educational costs, less any other financial aid that may have been awarded. Loan funds must be used toward school budgeted costs such as tuition, fees, books, supplies, room and board, and miscellaneous expenses.
Eligibility is not based on need or income, but approval of the loan is based on a review of the parent's credit history. Parents may borrow for each child enrolled in school. A separate Master Promissory Note (MPN) is required to be completed for each child. The MPN is good for 10 years.
Eligibility Criteria:
The parent or stepparent must:
- be the natural or adoptive parent of the student,
- be a U.S. citizen or an eligible non-citizen,
- not be in default on any student loan, and
- not have an adverse credit history as determined by the lender and federal regulations.
The student must:
- be the legal dependent of the parent applying for the loan,
- be enrolled at least half-time at a federally accredited school ,
- not be in default on any student loan,
- maintain satisfactory academic progress,
- comply with selective service registration,
- not owe a refund on any federal student grant, and
- not be incarcerated.
Loan Limits, Fees and Other Information:
| Federal PLUS (Parent) Loan | |
|---|---|
| Borrower | Parent |
| Annual Loan Limit | Cost of Attendance Minus Aid |
| Aggregate Loan Limit | Cost of Attendance Minus Aid |
| Interest Rate | Fixed at 8.5%1 |
| Federal Default Fee | 0% - 1%2 |
| Federal Origination Fee | 3% |
| Credit Check | Yes |
| Must Show Financial Need | No |
| Repayment Term | Up to 10 years |
| Repayment Begins | 30 days after the loan is fully disbursed |
| Delayed Repayment | An option is available to delay the start of repayment during the time the student (for whom the loan was made) is enrolled in school at least half-time and 6 months thereafter3 |
- The 8.5% interest rate applies to new loans first disbursed on or after July 1, 2006. For variable interest rates for PLUS Loans with a first disbursement date between July 1, 1998 and June 30, 2006, click here.
- The 1% Federal Default Fee may be paid for in full or in part by the guaranty agency.
- Interest is the responsibility of the borrower. Any unpaid interest is accrued and will be added to the principal when repayment commences.
Repayment and Interest:
PLUS Loans must be repaid. Repayment begins within 30 days from the final disbursement of the loan.
For PLUS loans disbursed on or after 7/1/2008, you may opt to postpone payments while your dependent student is enrolled in school at least half-time and for six months thereafter. Repayment will begin 6 months after the last day of at least half-time enrollment. You may also choose to defer only for the period of time that your dependent student is enrolled at least half-time. Repayment will begin 30 days after the student ceases at least half-time enrollment. You are responsible for all interest that accrues during any deferment or grace period. National Education will send quarterly interest statements during this time. Should you choose to not pay the interest, all interest will be capitalized and added to your balance at the time of repayment. You can also choose to not postpone your payments. If you choose this option, you will need to start making payments 30 days after the final disbursement date.
Alternative payment plans, deferments and forbearance are available to help you manage the repayment of your PLUS Loan. Select a different payment plan to fit your budget. You can reduce your initial payments by up to 40%.
Tips to remember:
- The parent is the borrower and is responsible for paying back the loan.
- PLUS Loans are expected to be repaid within ten years.
- The interest rate is fixed at 8.5% for PLUS Loans made on or after July 1, 2006. (see current interest rates).
- Repayment begins within 30 days after the final disbursement of loan funds.
- PLUS Loans do not have a grace period but you may opt to delay repayment while the student is enrolled in school at least half-time and 6 months thereafter.
- There is no penalty for early repayment; you can pay more than the monthly amount if you wish.
- National Education offers alternative payment plans.
- If you have any questions, contact us.
We reserve the right to modify or discontinue benefit programs at any time without notice. Any termination or modification of the program will not affect the terms of loans previously made. Specific terms and conditions may apply, please call us if you have any questions.