A Plus Loan is another type of student loan available through the Federal Direct Loan Program.  The Parent Plus Loan for undergraduates and the Plus loan for graduate students are the two types of Direct Plus Loans available.  The Parent Plus Loan are intended for parents to take out a student loan for their children’s undergraduate program.  The parents are responsible to repay back the plus loan and are held responsible for making sure that the loan is paid back in full.  Graduate Plus Loans are intended for students pursuing a graduate degree.  Students that are approved for a direct plus loan are eligible to borrow up to their cost of attendance minus other estimated financial assistance

The terms and conditions applicable to Parent PLUS Loans also apply to Graduate/Professional PLUS loans. These requirements include:

1)      FAFSA Submission

2)      Completed Direct Plus Loan Application

3)      Credit Check/Review of Parents

4)      Signed Promissory Note

 

Plus Loan Disbursement

The Department of Education will send the loan funds to your school and will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, you will receive the amount as a check or in cash.  Any remaining loan funds must be used for your education expenses.

Plus Loan Interest Rate

The interest rate for Plus Loans is fixed at 7.90 for Direct PLUS Loans. For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2009-2010, the variable rate for these PLUS Loans is 3.28 percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.

Plus Loan Repayment

For PLUS loans made to parents that are first disbursed on or after July 1, 2008, the borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.  All payments for a Direct Loan should be sent to the Department of Education, who is the administrator of the Plus Loan.