Parent Loans for Undergraduate Students (PLUS)

Introduction
Eligibility Conditions
Benefits
Application Process
Financing
Administration
Procedures for Appeal

 

  

Unsubsidized loans are provided to parents of dependent, undergraduate and of graduate students who are enrolled at least part-time in approved, post-secondary institutions. Loans are repayable immediately. Despite the name, PLUS was broadened to include graduate students.

There are two types of PLUS programs: the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Eligibility rules and loan amounts are identical under both programs, but the repayment plans differ somewhat. The main difference, however, is that the student receives FFEL funds from private lenders (such as banks, credit unions, or other lenders that participate in the FFEL Program). Direct Loan funds come from the federal government to the school, which delivers the loan proceeds to the student. Usually, schools will participate in just one or the other of these programs but sometimes will participate in both. A student can receive both FFELs and Direct Loans, but not both types for the same period of enrollment at the same school.

Income:
Not a condition.

Assets:
Not a condition.

Age:
Not a condition.

Disability:
Not a condition.

Presence of Spouse:
Not a condition.

Presence of Children:
Not a condition.

Prior Contribution:
Not a condition.

Exhaustion of Benefits From Other Programs:
Not a condition.

Job Search:
Not a condition.

Participation in Work Program:
Not a condition.

School Attendance:
A student must be enrolled at least half-time (6 credits per semester) in a participating, post-secondary institution.

Citizenship:
Must be a citizen or eligible non-citizen, as defined by the U.S. Department of Education. Generally, you are an eligible non-citizen if you are: (1) a U.S. permanent resident and you have an Alien Registration Receipt Card (I-551); (2) a conditional permanent resident (I-551C); or (3) an other eligible non-citizen with an Arrival-Departure Record (I-94) showing any one of the following designations: “Refugee,” “Asylum Granted,” “Indefinite Parole,” “Humanitarian Parole,” or “Cuban-Haitian Entrant.” If you are in the U.S. on only an F1 or F2 student visa, or only a J1 or J2 exchange visitor visa, or a G series visa (pertaining to international organizations), you must fill in oval c. If you are neither a citizen nor eligible non-citizen, you are not eligible for federal student aid. However, you may be eligible for state or college aid.

Other Eligibility Conditions:
The parents of undergraduate students and graduate students must have no adverse credit history, and the graduate students themselves must have no adverse credit history.

Type:
Loans at lower-than-market rates for each child in college; repayments begin 60 days after receipt of the loans.

Level:
Eligible parents and graduate students may borrow up to the cost of education minus any other financial aid per year for each child in college.

The interest rate is fixed at 8.5 percent. Interest is charged on the loan from the date of the first disbursement until the loan is paid.

Additionally, parents will pay a fee of up to 4 percent on the loan, deducted proportionately each time a loan disbursement is made.


Change in Recipient Status:
Students must reapply annually.

Change in Benefit Levels:
Changes in interest levels are by an Act of the New York State Legislature and signature of the Governor.


Where and How to Apply:
For a Direct PLUS Loan, parents must complete a Direct PLUS Loan application and promissory note, contained in a single form obtained from the school's financial aid office.

For a FFEL PLUS Loan, parents must complete and submit a PLUS Loan application, available from the school, lender, or state guaranty agency. In New York State the main guarantor is NYSHESC (parents outside of New York State should check their states for names of the guaranty agencies). After the school completes its portion of the application, it is sent to a lender for evaluation.


Financing:
Direct PLUS Loans are financed by federal general revenues, 89% of which were derived from individual and corporate income taxes (2005).

FFEL PLUS loans are financed by private lenders.


Administration:
Lending institutions administer the Federal Family Education Loan (FFEL) for the state’s guaranty agency (NYSHESC in New York State). Financial-aid offices of participating higher-education institutions certify that students meet enrollment requirements.


Procedures for Appeal:
There is no formal appeals procedure. Students could discuss decisions with, and provide additional clarifying information to, persons in the financial aid offices processing their applications.