Plus Loans Ease Student Expenses

PLUS Loans are loans your parents can take out to pay for your education expenses if you’re a dependent under­graduate student enrolled at least half time. Also, your parents must have no adverse credit history. As is true for Stafford Loans, there are FFEL PLUS Loans and Direct PLUS Loans. PLUS Loans are unsubsidized.

Can my parents get both a Direct PLUS Loan and a FFEL PLUS Loan for me?

They can apply for either a Direct PLUS Loan or a FFEL PLUS Loan, but not for both for you during the same enrollment period. Your parents could, however, apply for a Direct PLUS Loan for you and a FFEL PLUS Loan for one of your siblings, for example.

How do my parents apply?

For a Direct PLUS Loan, your par­ents must complete a Direct PLUS Loan application and promissory note, contained in a single form you get from your school’s financial aid office.

For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your school, lender or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.

Although it’s not a requirement, parents are encouraged to have their dependent children file a FAFSA, so their children can receive the maxi­mum student aid they’re eligible for.

Are there any borrowing require­ments my parents have to meet?

Yes, generally they have to pass a credit check. If they don’t pass, they might still be able to receive a loan if someone, such as a relative or friend who can pass the credit check, agrees to endorse the loan and promises to repay it if your parents don’t. Your parents might also qualify for a loan if they don’t pass the credit check if they can demonstrate that extenuating circumstances exist. For them to bor­row for you, you must meet the gen­eral eligibility requirements for federal student aid, and your parents must also meet some of these general require­ments. For example, they must meet citizenship requirements or be eligible noncitizens and may not be in default or owe a refund to any FSA program.

Do they need to find a lender?

Not if they borrow under the Direct Loan Program, because their lend­er will be the U.S. Department of Education. Your school assists the fed­eral government in administering the Direct Loan Program by distributing the loan application, processing the loan and disbursing the loan funds.

Under the FFEL Program, your par­ents will need to find a participating lender. For help, they should contact your school or the guaranty agency that serves your state.

Your school can refuse to certify your parents’ loan application, or can certify a loan for an amount less than they would otherwise be eligible for, if the school documents the reason for its action and explains the reason to your parents in writing. The school’s deci­sion is final and cannot be appealed to the U.S. Department of Education.

How much can my parents bor­row?

The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. For example, if your cost of attendance is $6,000 and you receive $4,000 in other financial aid, your parents could borrow up to — but no more than — $2,000.

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