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Parent PLUS loans

Federal Parent PLUS Loans enable parents with good credit histories to borrow funds for the educational expenses of each child who is a dependent student.  PLUS loan proceeds can be used to pay for eligible educational expenses which may include the following: tuition and fees, room and board, books and supplies, transportation, and other costs associated with attending a post-secondary institution.

How Do I Get Started?

  1. To apply for a PLUS Loan the parent will need to complete and return to the NTC Financial Aid Office a PARENT PLUS Loan Authorization Form.
  2. Parents will also need to complete a Master Promissory Note (MPN) for Parent PLUS Loans. The MPN is a legally-binding contract between the Department of Education and a borrower. The promissory note contains the terms and conditions of the loan, including how and when the loan must be repaid.  Complete the Master Promissory Note (MPN) for Parent PLUS now.
  3. Complete the PLUS Counseling module at www.studentloans.gov

More information about the terms of the Direct PLUS Loan is included in the table below:

Eligibility Criteria Loan Terms Additional Information/Requirements
DIRECT PLUS LOAN
(for Parents of Dependent Undergraduates)

• Non-need-based

• Parent borrows on behalf of undergraduate student

• Student must be enrolled at least half-time in a degree program

• Borrower must be a U.S. citizen or eligible noncitizen

• Borrower cannot be 90 days or more delinquent on the repayment of any debt (180 days delinquent on mortgage loan or medical bill payments) or the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt during the last five years.

• 7.21% variable-fixed interest rate (effective July 1, 2014;  6.84% effective July 1, 2015. Rates change each July 1.)

• 4.292% origination fee (for loans originated Oct. 1, 2014. For loans originated Oct. 1, 2015, the fee will be 4.272%. Fees are scheduled to change each fall due to federal budget sequestration.)

• Parents may borrow up to the student’s Cost of Attendance minus other financial assistance

• Interest begins accruing immediately; may be paid periodically or capitalized

• Repayment of principal and interest begins 60 days after loan is disbursed. (Parents may qualify for deferment while student is enrolled. Go to NSLDS.ed.gov, log in to find your servicer and contact them.)

• PLUS Loans may be consolidated with other Direct Loans

• Students must complete the Free Application for Federal Student Aid (FAFSA).

• Borrowers accepting Direct Loan funds for the first time must complete an online Master Promissory Note.

• More information from the U.S. Department of Education

What is the maximum PLUS loan amount that can be borrowed?
The maximum PLUS loan amount is equal to the student’s cost of education (budget/cost of attendance) minus other financial aid and resources such as scholarships.
           
Example: The budget (cost of attendance) for the student is $14,000.  Other financial aid is $5,500.  The difference of $8,500 is the amount that can be borrowed in a PLUS loan.
 
Can both a parent and step-parent of a dependent student apply for a PLUS loan for that student?
Any two eligible parents may borrow separately to provide for the educational expenses of the student, provided that the combined borrowing of the parents does not exceed the cost of attendance minus other financial aid and resources.  Eligible parents include the student’s biological or adoptive parents or step-parent if their income was used when completing the FAFSA.
 
Can I still receive a Direct PLUS Loan if I have an adverse credit history?
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history or documenting to the U.S. Department of Education’s satisfaction extenuating circumstances relating to your adverse credit history. If you are a parent borrower, the endorser cannot be the child on whose behalf you are borrowing.
 
 

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