A Parent Loan for Undergraduate Students (PLUS) is a low-interest loan to help you, as the parent borrower, pay for your son or daughter's education beyond high school. The PLUS is available without regard to financial need. However, satisfactory academic progress as well as an adequate enrollment level is required. In addition, the lender (Federal Treasury) is required to determine whether you have an adverse credit history. The parent borrower must be the natural or adoptive parent (or in some cases a stepparent) of a dependent student. You may borrow up to the full cost of attendance, minus all other aid awarded. Additionally, as the parent borrower, you will be responsible for repaying the loan. Loan repayment begins 60 days after the loan has been fully disbursed. As of August 9, 2013, the interest rate changed to 6.41% for loan first disbursed before July 1, 2014. For new PLUS disbursed on or after July 1, 2014 will have an interest rate of 7.21% Please note that the interest rates also changed from fixed to variable-fixed, meaning that the interest rate can change every July 1, but any loan taken under that rate will remain fixed for the life of the loan.
The FIRST step in the Electronic PLUS application process is the completion of the Free Application for Federal Student Aid (FAFSA) by you and your student. You may complete the FAFSA for free over the Internet at www.fafsa.ed.gov. This will determine eligibility for any of the federal aid programs available. You are advised to wait until the student receives a financial aid award offer from ESU before continuing with the PLUS application.
The SECOND step in the PLUS process requires the completion of the Federal Direct Parent PLUS Loan Application where you will confirm several items including:
When completing this application, a credit check will be performed to determine the parent's eligibility for the loan. The earliest a parent can complete this application for the 2014-2015 aid year is June 1, 2014. The application can be found online at: https://www.studentloans.gov/
The THIRD step is for a parent borrower to complete the Direct Loan Master Promissory Note (DLMPN) for Parent PLUS Loans on behalf of the student. If you already have a valid DLMPN on file with Direct Lending, you can skip this step. Each DLMPN is valid for 10 years as long as a disbursement took place. This can be done by going to https://www.studentloans.gov/.
The FOURTH step in the PLUS process occurs when the funds are disbursed. After direct institutional costs (tuition/fees and campus room/board) have been paid, any excess funds will go either directly to your dependent student (by the method determined by the student for his/her other federal financial,) or to you, the parent borrower, via check.
- PLUS loans are subject to a 4.288% origination fee if first disbursed before July 1, 2014. The fee will be 4.292% for loans first disbursed on or after July 1, 2014.
- You have the right to cancel all or a portion of the PLUS loan proceeds by contacting the Office of Financial Aid, Scholarships, & Veterans Services prior to disbursement.
The FIFTH step in the PLUS process is the repayment of the Federal Direct PLUS loan.