PLUS Loans

The Federal government sponsors the Federal Parent PLUS Loan program, which helps to bridge the gap between the cost of attending college and your other funding.

Using a PLUS Loan, your parents can borrow as much as they need to cover the cost of education, minus your existing aid and other resources. PLUS Loans offer interest rates that are fixed for the life of the loan and capped at a maximum of 9%. Repayment begins approximately 60 days after the disbursement of the loan. You must be enrolled in school at least half time to be eligible for the loan.

Similar to the Stafford Loans that are available to students, schools participate in one of two loan programs--either the William D. Ford Direct Loan Program, with the Federal government as the lender or the Federal Family Education Loan Program (FFELP), with private lending institutions as the lenders. Your financial aid counselor will have more information on the PLUS Loan.

PLUS Loans Require a Check Credit
Unlike Stafford Loans, PLUS Loans require a credit check. If your parents cannot pass the standard credit check, the PLUS Loan program offers credit counseling and other options such as co-signers on the loan. Your parents can also qualify for a PLUS Loan with the help of a friend or relative who agrees to act as an 'endorser,' using their credit history to qualify for the loan.

Apply for the PLUS Loan program through your school's financial aid office. Your parents will need to complete paperwork, including a promissory note. Before your parents apply for a PLUS Loan, talk to them about your long-term plans. They will have to repay the PLUS Loan whether or not you complete your degree program. You can work together to repay the loan, but paying the loan on time will be important to their credit rating as well as the credit ratings of any co-signers.