PLUS Loans

How much may I borrow?
How do I apply?
What happens when the loan enters repayment?

The PLUS (Parent Loan for Undergraduate Students) Loan is a credit-based loan for parents of dependent students. This is a non-need based loan, although some colleges may require that you complete the FAFSA to receive a PLUS loan. PLUS loans may be processed under either the Direct or Stafford Loan system, depending on the type of loan program for which the college has contracted.

The PLUS loan is a variable interest rate loan that is capped at 9%. For the 2004-2005 (July 1, 2004 to June 30, 2005) academic year, the current interest rate is 4.17%.

How much may I borrow?
There is no yearly limit; you may borrow up to the cost of education, less other financial aid received.

To qualify for a PLUS loan, parent borrowers must have a good credit record. If you do not qualify for a PLUS loan based on your credit, then the student may receive the additional amount of Unsubsidized Stafford loan.

Parents may obtain a PLUS loan application directly from the financial aid office. As part of the promissory note, you may be asked to select a student loan lender. Usually, the financial aid office provides a list of preferred lenders. Select your lender carefully because it could save you thousands of dollars in repayment costs. Click here for more information on how to choose a lender.

Typically, fees range from 0 to 4 percent and are deducted from the proceeds of the loan. As with the Stafford loan, research various lenders to determine if they pay any of the origination fees as part of their borrower benefit programs.