Student PLUS Loans
Although often referred to as student PLUS loans (or PLUS student loans) these are in fact federal loans which are made available to parents, rather than students.
Although many students will be in receipt of educational loans (such as Stafford loans) the ever rising cost of education means that there is often a gap between the actual cost of education and the monies received by way of scholarships, grants and loans. For this reason, the government introduced the PLUS (Parent Loans for Undergraduate Students) scheme in an effort to help to close this gap.
PLUS loans may either be granted under the Federal Family Education Loan program (FFELP), in which case loan monies come from private lender and interest is charged at 8.5%, or may be granted as a DIRECT loan from the US Department of Education, in which case interest is charged at 7.9%. A fee of up to 4% will also be added to the loan and this will be deducted proportionately from each loan disbursement.
Applicants must be applying for a loan in support of a dependent undergraduate student and the amount of any loan cannot be greater than the cost of education, less any financial aid (such as a Stafford loan) which the student is already receiving. Applicants must also be US citizens or nationals (or US permanent residents or eligible non-citizens) and have a satisfactory credit rating.
Repayments on PLUS loans are normally required to begin within 60 days of the initial disbursement of the loan.
PLUS loans are normally paid directly to the school and are applied to the payment of tuition, fees, room and board and other school expenses. If there are then funds remaining these can be paid over to the student or credited to the student's school account, depending upon the wishes of the parent. Any surplus funds must however be used for educational purposes.
For Direct PLUS Loans parents must complete a Direct PLUS Loan application and promissory note (combined into a single form) which can be obtained from the school's financial aid office.
For FFELP PLUS Loans parents must complete a PLUS Loan application which is available from the school's financial aid office, lenders or the state guaranty agency. Once the school has completed its portion of the application form it is then sent to a lender for evaluation.
Recommended books from
Paying for College Without Going Broke, 2010 Edition (College Admissions Guides)
by Princeton Review
Amazon Price: $13.60
Customer Review: Plan early or there's not much you can do. That's the basic message here.
Scholarship Handbook 2010 (College Board Scholarship Handbook)
by The College Board
Amazon Price: $19.11
Customer Review: My daughter is a graduating senior high school student. I purchased this book for her. Within a couple days this book was full of color coded flags marking the type of scholarship and due date. She was able to find over 30 scholarships consistent with her intended field of study that she was unable to find using web, government and school resour...
How to Go to College Almost for Free
by Ben Kaplan
Amazon Price: $15.84
Customer Review: As far as the product condition it was great and definitely what I expected. The customer service was fast and agreeable. I haven't gotten a change to read it yet but I'm sure it will be very helpful!
Free $ for College for Dummies
by David Rosen, Caryn Mladen
Amazon Price: $13.59
Customer Review: David Rosen and Caryn Mladen, the authors, cover every route for paying for college: Scholarships, grants, low interest or interest-free loans, tuition discounts, and other stuff. With that said, I found half useful and the other half irrelevant and repetitive.
This book gives good tips on what payment plans do and don't work. Like how workin...
5 top mistakes when paying for college - Bankrate.com
10 Mar 2010 at 5:03am
5 top mistakes when paying for college
Bankrate.com
It's also required for federal student loans, such as subsidized and unsubsidized Stafford loans, and PLUS loans for parents. The US Department of Education ...
and more »
University of Wyoming - University of Wyoming News
9 Mar 2010 at 10:29am
University of Wyoming
University of Wyoming News
UW will participate exclusively in the Federal Direct Loan (subsidized and unsubsidized student loans), Federal Parent PLUS Direct Loan and Federal Grad ...
Seeking Shelter From the Coming Tax Storm - Wall Street Journal
6 Mar 2010 at 11:00pm
Seeking Shelter From the Coming Tax Storm
Wall Street Journal
Even if a school has given out all of its own aid, applicants are still eligible for federal Stafford student loans, PLUS loans to parents and the Pell ...
and more »
Bigger Tuition Bills and Student Loans Coming in 2011 - U.S. News & World Report
18 Feb 2010 at 10:06am
City Town Info Education Channel
Bigger Tuition Bills and Student Loans Coming in 2011
U.S. News & World Report
Many colleges use parent loans, such as federal PLUS loans, to bridge such gaps. Including PLUS loans in a student's aid offer is a contro...
| 
