Parent PLUS Loan Information
What is a Federal Direct PLUS?
A Federal Direct PLUS is a loan the parent borrows for their dependent undergraduate student for educational expenses.
Who can take out a PLUS?
Only a parent of a dependent student may request a PLUS loan. A parent can be the student’s natural, adoptive or step-parent.
Where does the money for a PLUS come from?
Parents will be borrowing the money from the U.S. Department of Education.
What are the stipulations?
The student is required to complete the Free Application for Federal Student Aid (FAFSA) before we can process the PLUS loan. The PLUS Loan is not based on financial need. The borrower must be a U.S. citizen or eligible non-citizen and provide a valid Social Security Number. The U.S. Department of Education will perform a credit check on the borrower.
Are there any fees?
Each PLUS is subject to an origination fee of 4.288% at the time of disbursement. These fees are automatically deducted from each disbursement. The fee is used by the Department of Education to reduce the cost of this loan program.
What is the interest rate on the PLUS?
The interest rate is a fixed rate of 6.41%. (For loans disbursed on or after July 1, 2013).
How much can I borrow?
The parent may borrow up to the student’s cost of attendance minus any financial aid the student is receiving. Some parents only want to borrow for direct costs: i.e. tuition, fees, room & board (if contracted). Use Calculating the Amount of PLUS
to determine the amount you want to borrow.
How is the PLUS disbursed?
PLUS Loan funds will be direct credited to the student’s account. A full year loan will be disbursed equally between fall and spring.
What if I borrow more than my student’s bill? What happens to the excess funds?
If the PLUS Loan proceeds create a refund, the UW-Platteville Cashier’s Office will send the excess funds to the parent.
When do I begin repaying the PLUS?
Repayment of interest and principal begins within 60 days after the loan is fully disbursed. The standard repayment period is 10 years; however, there is a minimum repayment of $50 per month. You may request that repayment be delayed while your student is enrolled at least half-time and during the 6 month period after your student graduates or is no longer enrolled at least half-time. You must contact the Direct Loan Servicing Center at 1-800-557-7394 to request a postponement of payment. Parents should wait until the first disbursement of the loan to make this call. Interest does accrue on your loan during this time.
What if the parent is denied a PLUS Loan?
If the parent is denied the PLUS Loan due to adverse credit history, the student may be eligible to borrow an Unsubsidized Direct Loan.