Parents may borrow for their dependent undergraduates if they meet the following requirements:
- must be borrowing to help pay for the educational costs for an eligible student; Graduate students must be borrowing for themselves;
- must be a US citizen or eligible non-citizen; and
- must not owe a refund to any federal Title IV program.
Borrowers in default on any federal Title IV loan must make satisfactory repayment arrangements with the holder of that loan to re-establish federal Title IV eligibility.
Parents and graduate students who do not meet the credit criteria established by federal regulations are not eligible to borrow a Federal PLUS Loan. However, some lenders may allow the parent to obtain a credit worthy endorser. Individual lenders may have additional credit qualifications.
Parents and graduate students file a PLUS Master Promissory Note (MPN) which may be obtained from a college financial aid office.
Loan applications can be filed up to the last day of program enrollment.
Parents and graduate students may borrow up to the cost of education minus any financial aid received by the student. The fixed interest rate cannot exceed 9.00%. As of 07/01/2010 the fixed interest rate for FFELP PLUS loans is 7.9%.
Repayment begins within 60 days after the loan has been fully disbursed.
Borrowers with parent PLUS loans disbursed on or after July 1, 2008, now have the option to postpone their monthly payments through a PLUS loan grace period. Payments will be postponed until six months after the date the student for whom the loan(s) was obtained is no longer enrolled at least half-time. Interest will continue to accrue while payments are postponed. Although principal payments are not required during this period, borrowers have the option to pay accruing interest either monthly or quarterly. Following this grace period, repayment of the loans(s) will begin according to the terms of the Promissory Note(s) and repayment agreements(s). *
Graduate students can receive a deferment on their loans as long as they remain enrolled in school at least half-time. PLUS loans are unsubsidized, borrowers will be charged interest during periods of deferment or forbearance. If they do not pay the interest as it accrues, it will be capitalized (added to the principal balance). *
* Taken from servicer's webpage: www.nelnet.com
