Plus Loans

Parents of dependent undergraduate students who are enrolled on at least a half-time basis each semester can borrow a PLUS Loan to help pay education expenses. Graduate and Professional students can borrow under the "Grad PLUS" program.

• Borrowing versus cashing in investments

NEW FOR 2010-2011 :

 On March 25, 2010, the U.S. House of Representatives  and the U.S. Senate passed the  Health Care and Education  Affordability Reconciliation Act of 2010 ("HCEARA"-H.R. 4872) . This bill makes major changes in several federal student aid programs AND mandates that, effective July 1, 2010, all federal student loans (Stafford, PLUS, and Grad PLUS)  will be originated through the Federal Direct Loan Program.  The Family Federal Education Loan Program, which permitted private lenders to originate these loans, is eliminated effective June 30, 2010.

• Read more about this transition
  • NEW: PLUS and GradPLUS processing steps for 2010-2011. 

• Fees:
  • All Direct PLUS Loans have a fixed interest rate of 7.9%. Interest on the loan accrues while the student is in school and during authorized periods of deferment. If you postpone paying the interest, it will be capitalized (that is, added to the principal balance owed). This will significantly increase the total cost of the loan.
  • The loan origination fee is currently 4% of the amount borrowed,
• Repayment Incentives:
  • Under the Electronic Debit Account (EDA) payment option, your bank automatically sends your payment to the Department of Education. Borrowers who utilize this option receive a 0.25% interest rate reduction

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.

• Interest may be paid or capitalized upon the loan entering repayment. We want to remind families that capitalizing the interest on the loan will significantly increase the overall final cost of the loan.
• We want all of families to be fully informed consumers. FinAid's Parent Loan Advisor may help families as they make this important decision.
• Borrowers must request the deferment period. Otherwise, they will be expected to begin repayment within 60 days of disbursement.

Updated July 11, 2010