Direct Parent PLUS Loans


What Is It?

  • Direct Parent PLUS loans are federal loans provided by the U.S. Department of Education that parents of dependent undergraduate students can use to help pay education expenses.
  • The U.S. Department of Education is the lender.
  • The borrower must not have adverse credit history.
  • The maximum loan amount is the student's cost of attendance minus any other financial aid received.


How Do I Apply?

The application is available online at  www.studentloans.gov. Parent's must log in using their FSA ID and password (not the student's). You should be notified right away on whether you are approved or denied. Once your application is submitted, it will be sent directly to George Fox within 24 hours.

Applications are aid year specific and must be completed each year you wish to borrow a Parent PLUS loan.

Once the application is complete, parents will also need to complete a PLUS Master Promissory Note on www.studentloans.gov. (This only needs to be completed once per child.)


What If I Am Denied?

In some cases, when a parent is denied, they may still be able to receive a PLUS loan by: 

  • Obtaining an endorser who does not have an adverse credit history. An endorser code should be provided at the time you complete the application.
    • You will also need to complete a PLUS Master Promissory Note for each endorsed loan.
  • Appealing the credit decision by documenting to the Department of Education's satisfaction extenuating circumstances relating to their adverse credit history.

If either is true, parents will also need to complete PLUS Counseling at www.studentloans.gov before disbursements of the loan can be made. 

If a parent is unable to obtain an endorser or appeal, the student may be eligible for additional unsubsidized loans to help pay for his or her education. 

Additional Unsub Amounts

Year in School

Amount

Freshmen and Sophomore $4,000
Junior and Senior  $5,000


What Is The Interest Rate?

PLUS loans first disbursed on or after July 1, 2016, and before July 1, 2017, have a 6.31% interest rate. Interest rates are fixed for the life of the loan.


Is There A Fee Charged?

Yes, there is a loan fee on all Direct PLUS Loans. The fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The current loan fees on PLUS loans disbursed on or after October 1, 2015 and before October 1, 2016, is 4.272%.


When Does Repayment Begin?

Your PLUS loan enters repayment once your loan is fully disbursed (paid out). However, there are options to request a deferment: 

  • While you or your child are enrolled at least half-time
  • For an additional six months after your child ceases to be enrolled at least half-time.

Deferments can be requested when completing the PLUS application online, or by contacting the servicer directly.

Note: If your loan is deferred, interest will accrue on the loan during the period of deferment. You may choose to make interest only payments during the deferment period, but are not required to. To set up interest only payments, contact your servicer. 


Can I Transfer My Loan To My Child?

No, a PLUS loan made to a parent can not be transferred to the child. The parent is responsible for repaying the loan.

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Repayment





Find Out What You Owe

Visit the National Student Loan Data System (NSLDS) to view information about all of the Federal Parent PLUS loans you have received and to find contact information for the loan servicer or lender for your loans. You will need your FSA ID and password to access your information. If you have forgotten your FSA ID, you can retrieve it at fsaid.ed.gov.



Know Your Servicer

A loan servicer is a company that handles the billing and other services on your federal student loan. The loan servicer will work with you on repayment plans and will assist you with other tasks related to your Parent PLUS loan.

You can set up an online login with them now to access your loan information, make payments, and access forms.



Know Your Payment Options

Before you enter repayment, it will be important that you choose the right payment plan option that works for you. To find more detailed information on each repayment plan option, visit Federal Student Aid.

Use the loan Repayment Estimator to calculate what your payments would look like for each repayment plan.


Standard Repayment Plan

  • Fastest and most cost-effective
  • Pay a fixed amount each month until your loans are paid in full
  • Monthly Payments: at least $50
  • Repayment Term: Up to 10 years
  • Default payment plan


Graduated Repayment Plan

  • Payment start low and gradually increase every two years
  • Monthly Payments: varies throughout repayment
  • Repayment Term: Up to 10 years
  • Pay more over time than under the 10-year standard.

To Apply: Contact your servicer


Extended Repayment Plan

  • Must have more than $30,000 in federal loans
  • Allows you to extend the repayment term up to 25 years
  • Monthly Payments: may be fixed or graduated, lower than standard
  • Repayment Term: Up to 25 years
  • Pay more over time than under the 10-year standard.

To Apply: Contact your servicer


Income Contingent Repayment (ICR) 

  • Monthly payments based on adjusted gross income, family size, and total amount of eligible loan debt.
  • Monthly Payment: varies each year depending on income
    • Lesser of the following
      • 20% of your discretionary income
      • what you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income
    • Must apply annually.
    • Repayment Term: Up to 25 years
      • Any remaining balance after 25 years will be forgiven
    • Eligible loans:
      • Direct Consolidation Loans
    • Interest captializes once per year

To Apply: Visit studentloans.gov and complete the IBR/Pay As You Earn/ICR Repayment Plan Request

 

Repayment Example

Meet David

David's son attended an undergraduate program for four years. On average, David borrowed $14,900 in a Parent PLUS loan per year. When his son graduated, David had borrowed a total of $59,600 in Parent PLUS loans with an average 6.8% interest rate. This is what David's repayment would look like - 

Direct Undergraduate Student Loan Repayment Example

Repayment Plan Repayment Period Initial Monthly Payment Final Monthly Payment Total Interest Paid Total Amount Paid
Standard 120 months $686 $686 $22,705 $82,305
Graduated 120 months $396 $1,187 $28,966 $88,566
Extended (Fixed) 300 months $414 $414 $64,500 $124,100

*Use the loan Repayment Estimator to get an individualized repayment estimate.


Loan Consolidation

Carefully consider whether loan consolidation is the best option for you. Loan consolidation can greatly simplify loan repayment by centralizing your loans to one bill and can lower monthly payments by giving you up to 30 years to repay your loans. However, if you increase the length of your repayment period, you'll also make more payments and pay more in interest. 

Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The loans that were consolidated are paid off and no longer exist. If you decide to consolidate during your grace period, you will lose your remaining grace and repayment will begin once your application is processed.

If you are considering the Income Contingent Repayment plan, you will need to consolidate your loans to be eligible.

To find out if consolidation may be right for you, complete this loan consolidation counselor.

For more detailed information on loan consolidation, you can also visit Federal Student Aid

To Apply: Visit studentloans.gov and complete the Direct Consolidation Loan Application and Promissory Note


Deferment and Forbearance

In some cases, you can receive a deferment or forbearance that allows you to temporarily postpone or reduce your payments. You must apply through your servicer and be approved to qualify. Keep in mind, there are time limits on how long you can be in a deferment or forbearance. While they are available to you, it is important to use them only when you really need them.


Deferment

During a deferment, you do not need to make payments, however your PLUS loans will continue to accrue interest. Interest will be capitalized (added to your principal balance), and the amount you pay in the future will be higher. Most common reasons for a deferment are unemployment, economic hardship and attending school.


Forbearance

If you do not qualify for a deferment, in some cases your servicer may be able to grant you a forbearance. With a forbearance, your servicer may allow you to either stop or reduce your monthly payments for up to 12 months. Interest will accrue on all of your loans during this time.

For a list of reasons you may qualify visit Federal Student Aid or contact your servicer.

To Apply: Contact your servicer.

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