What is a Federal Direct PLUS Loan?
The Federal Direct PLUS Loan Program is available to parents of undergraduate students, if they are credit-worthy applicants. A parent of an undergraduate student may borrow up to the total Estimated Cost of Attendance less financial aid resources received by the student. The U.S. Department of Education is the lender for the Direct PLUS Loan Program.
The maximum Parent PLUS Loan a parent may borrow per academic year is equal to your cost of attendance minus other financial aid (including Federal Direct Subsidized and/or Federal Direct Unsubsidized Loans for which you are eligible). There is no aggregate maximum loan limit for the Parent PLUS Loan.
The Federal Direct PLUS Loan Program requires a 3% origination fee and a 1% default fee. There’s an up-front rebate of 1.5%, so the net disbursement is 97.5% of the gross loan amount. The borrower must make the first 12 payments on time to keep the up-front rebate.
The first payment is due within 60 days after each loan is fully disbursed.
Parents have the option of deferring repayment based on your enrollment status. Specifically, parent PLUS borrowers may defer repayment:
- While the student is enrolled on at least a half-time basis, and
- During the 6-month period after the student cease to be enrolled on at least a half-time basis
- Interest will be capitalized until repayment begins. If a deferment is chosen, the parent borrower will be sent a quarterly interest statement and will have the option of paying the interest as it accrues during the deferment period. The parent borrower may be allowed up to thirty years for repayment.
Parent borrowers must call the Direct Loan Servicing Center (DLSC) at (800) 848-0979 to request a deferment. Please note that if the parent borrower does not choose to defer payment, repayment begins 60 days after full disbursement of the loan. Therefore, the first payment of a fall/winter loan will usually be due in February. Interest begins to accumulate when the first disbursement is made.
When to apply
You should begin the application process prior to the beginning of the academic year in order to ensure timely processing. Depending on the time of year, it can take up to 4 weeks from the
time Siena Heights University receives the PLUS
Application until the servicer sends notice of
acceptance or rejection.
How to apply for PLUS
- At www.studentloans.gov, complete the Direct PLUS Loan process
And (once approved)
- Complete a Direct PLUS Loan Master Promissory Note (MPN).
The parent borrower will need to log in using their social security number, first two characters of their
last name, date of birth and Federal PIN number.
A federal PIN is required for an online PLUS MPN. This would be the same PIN that you used to
sign the FAFSA. If you do not have a federal PIN or if you are unable to remember your current PIN
you can request a new or duplicate one at www.pin.ed.gov.
After loging in to studentloans.gov/ follow the steps below:
After we receive the Application, Siena Heights University confirms student’s eligibility for a
PLUS Loan and transmits the application to the PLUS loan servicer. Funds are sent directly
to Siena Heights University and applied against student’s bill.
Options if PLUS is not approved
These are some options the family may want to consider:
Parent may be reconsidered and approved for the PLUS loan with an endorser (co-signer). An endorser promises to
repay the loan if the parent borrower fails to do so.
The Student has the option of taking out an additional Unsubsidized Stafford Loan. The amount of
the loan will vary based on grade level and financial aid that the student has already received. For
freshmen and sophomores the amount is up to $4000 and for juniors and seniors the amount is up
to $5000 for the year.
Once Siena Heights University receives notification from the Federal Government that a PLUS
request has been denied we will revise the student’s financial aid package showing the additional
unsubsidized loan eligibility. The student will be notified and given the option to accept all or a
portion of the new unsubsidized loan award or decline it all together. Additional loan eligibility cannot be awarded without a parent PLUS denial.