FALL 2013 - SPRING 2014
William D. Ford Federal Direct Parent PLUS Loan Program for Undergraduate Students
What is a Parent PLUS Loan?
The PLUS loan is a federally funded loan from the U.S. Department of Education for parents/stepparents of dependent undergraduate students. Stepparents are eligible as long as their information is included on the Free Application for Federal Student Aid (FAFSA). Parents borrow the loan from the federal government not a bank, savings and loan or credit union.
Am I eligible for a Parent PLUS Loan?
If your student is accepted and enrolled for at least half-time (6 units) in an undergraduate degree program in a U.S.college, university or other eligible postsecondary institution, you may be eligible for a Federal Parent PLUS loan.
Does my student need to complete the FAFSA (Free Application for Federal Student Aid) in order for the Parent to apply for the Parent PLUS Loan?
Yes, students are required to complete the free government application on line at www.fafsa.ed.gov. It is a good idea to be evaluated for all federal and state financial aid options first, prior to applying for a Parent PLUS Loan. In order to be offered a Federal Direct Parent PLUS Loan, the student must have a FAFSA on file with San Francisco State University Office of Student Financial Aid. After SFSU receives the FAFSA, and the students file is complete. The student will be sent an email from our office informing them of a Financial Aid Award Offer that is available to view and accept on line at our SF State Gateway.
What will my interest rate and origination fee be?
Repayment is a fixed interest rate of 6.41% on all PLUS Loans disbursed on or after July 1, 2013. Interest accrues on the unpaid balance of the loan from the date of disbursement by the school until the entire principal balance is paid in full. Failure to make monthly or quarterly interest payments results in the interest being capitalized (added to the principal of the loan). A 4.204% origination fee is deducted upfront of each disbursement.
How much money am I eligible to borrow?
Unlike other types of financial aid, the Parent PLUS Loan is not need based. The maximum eligibility amount is determined by the Student's Cost of Attendance minus any financial aid that the student has been awarded and accepted. The PLUS loan can replace all or a portion of the expected resources. If the student will not be receiving financial aid of any kind, the parent can borrow the full cost of attendance. Parents do not have to apply for the entire amount. Parent should calculate the amount they need. Please refer to the students Award Offer on the SF State Gateway for the amount of PLUS Loan that you are eligible to borrow.
Can I find out in advance if my credit check will be approved?
Approval or denial of the loan is based on the parent's credit history. Credit checks are performed by the Department of Education. If a review of the parents' credit history is adverse and loan is denied. A parent who has adverse credit history may receive a loan by securing an endorser who does not have adverse credit history.
Am I required to take a Parent PLUS Loan upon application?
No. Approval of a Parent PLUS loan application does not commit you to accepting the loan. If approved, you must contact the Office of Student Financial Aid to cancel or reduce the requested loan amount.
How will I receive my Parent PLUS Loan funds?
The Parent PLUS Loan is disbursed to the Parent. If the loan is a full year loan, the loan will be disbursed half in the Fall and the other half in the Spring semester. If the loan is for one-semester, the loan will be disbursed in one disbursement.
When will I have to begin repaying the Parent PLUS Loan?
Repayment and interest will apply to funds after the loan has been disbursed. The first payment of interest and principal are due within 60 days after the loan is fully disbursed. The parent may request an in-school deferment. If, after obtaining a Parent PLUS loan, the student for whom the parent borrowed drops to less than half time or withdraws during the period for which the loan was intended, the entire amount is immediately due.
If the parent is denied the parent PLUS loan does the student have an opportunity to request more student loan?
Yes, if the parent is denied and does not get an endorser on the loan. The student may request an additional Federal Direct Unsubsidized student loan. A written request must come from the student, not the parent.
Freshmen and Sophomore class level maximum increase: $4,000 for the academic year.
Junior and Senior class level maximum increase: $5,000 for the academic year.
Steps in Applying for a Parent PLUS Loan
(Please complete steps in order)
Step 1 -
To apply, the parent completes the Federal Direct Parent PLUS Loan Request Form. We suggest the parent with the best credit history apply for the loan. If your PLUS loan is denied, the other parent can apply or the parent can request an endorser. The parent must complete and mail this form to the Office of Student Financial Aid.
Step 2 -
Parent must go online to apply for the Parent PLUS Loan at https://studentloans.gov Click on SIGN IN (go to Request a PLUS LOAN) this is where the parent completes the actual application. The Department of Education will perform a credit check. The credit check approval is good for 90 days.
***(If your Parent PLUS loan is denied, your parent may be able to request an endorser.)***
Step 3 -
After the credit check is approved and, if this is the parent's First Federal Direct Parent PLUS Loan, the parent must also complete an on line electronic Master Promissory Note (e-MPN).
After you have applied and received an approval from Federal Direct Parent PLUS Loan and completed the Master Promissory Note, your information will be sent to San Francisco State University, Office of Student Financial Aid electronically.