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Federal Direct Parent Loan for Undergraduate Students
2015-2016 PARENT PLUS AND GRAD PLUS APPLICATIONS FOR MU WILL OPEN WITH THE DEPT OF ED ON JUNE 15, 2015 AT WWW.STUDENTLOANS.GOV.
The Federal Direct Parent Loan for Undergraduate Students (PLUS) is a low-interest federally insured loan for parents (as defined by the FAFSA form) of dependent students to help pay college costs. The loan can be used to cover any educational expenses not covered by other forms of financial aid. Under the Federal Direct PLUS loan program, parents may borrow up to the full cost of their student's education minus other financial aid received. To be eligible for a Federal Direct PLUS Loan for Parents, the student and parent must be a U.S. citizen or eligible noncitizen and must not be in default on any federal education loans or owe an overpayment on a federal education grant,the student must be enrolled or accepted for enrollment in a degree program on at least a half-time basis (6 semester hours) as an undergraduate student and must maintain Satisfactory Academic Progress (SAP), the parent borrower must not have an adverse credit history (a credit check will be performed) and complete a FAFSA form. If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan promising to repay the loan if the parent fails to do so. If the parent is denied the Federal Direct Parent PLUS Loan and elects not to use an endorser, the student is eligible for the additional Federal Direct Unsubsidized Loan not to exceed the student's Cost of Attendance. Processing fees will be deducted from the total amount borrowed. A parent must sign for the loan and complete all required documentation prior to the end of the student’s current academic year enrollment. A student must sign for the loan and complete all required documentation prior to the end of the student's current academic year enrollment, (per federal guideline 34 CFR 668.164(g)(2)(ii)). Any missing documents can be found on the student's myMu Portal.
The maximum amount a Parent may borrow per academic year for a Parent PLUS is equal to the cost of attendance minus other financial aid (including Federal Direct Subsidized, Unsubsidized or a Private loan).
Parent PLUS Denials
If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. If the parent is denied the Federal Direct Parent PLUS Loan and elects not to use an endorser, the student is eligible for the additional Federal Direct Unsubsidized Loan not to exceed the student's Cost of Attendance. The student must sign his/her award letter requesting the additional Federal Direct Unsubsidized Loan. First and second year students may borrow up to $4,000 and third and fourth year students may borrow up to $5,000.
Applying for a Parent PLUS (FAFSA Required)
Please note: When the loan(s) have been processed, you will receive an updated award letter from MU listing your loan has been PROCESSED. Once the loan is processed/booked, the loan is assigned a Loan Servicer on behalf of the Department of Education. For a complete listing of Loan Servicers, please visit www.studentloans.gov and choose Loan Servicers at the bottom right. For additional information regarding interest rates, repayment etc for Federal Direct Sub/Unsub, Parent/Graduate PLUS, please contact the Direct Loan Servicing Center at 1-800-848-0979.
Direct Loan Interest Rate and Origination Fee
See the Federal Student Aid Web site for interest rates.
The Parent PLUS Loan must be issued in two equal amounts, one in the Fall and one in the Spring semester of the academic year as long at the student is enrolled or accepted for enrollment in a degree program on at least a half-time basis (6 semester hours) as an undergraduate student.
The repayment period for the Federal Direct PLUS Loan begins 60 days after the last disbursement of the loan is made to MU for the academic year. Please visit the Department of Education’s website for additional information concerning loan repayment/repayment plans, deferment/forbearance options, or to use the loan repayment calculator to calculate monthly payments depending on which repayment plan you decide.
Loan Cancellation/ Reinstatement
A student or parent borrower may cancel or reduce a loan anytime before a loan has disbursed to Methodist University. If the loan has already been disbursed and credited to the student’s account in the Business Office, the borrower may cancel a loan within 30 days from the date it disbursed and credited to the student’s Business Office account. A student may reinstate a Federal Direct subsidized (sub) and unsubsidized (unsub) loan at any time prior to the end of the student’s current academic year enrollment. The Federal Parent PLUS for Parents/Graduate students and Alternative Loans MAY NOT be reinstated once reduced or cancelled. Instead, the borrower must reapply online. To reinstate,reduce, or cancel a loan, the borrower must complete the Loan Revision Form.
Important Notice: Canceling any loan disbursement could result in a balance to be due on the student's account in the Business Office which the student will be responsible for paying.
Borrowers cannot cancel a loan disbursement if the designated time period described above has already passed. Instead, the borrower can repay the loan disbursement directly by contacting the loan holder which can be found by accessing www.nslds.ed.gov. The borrower will be responsible for any interest that may have accrued and/or any loan fees.
National Student Loan Database
Borrowers can review Loan (FFELP or Direct), Perkins, and Federal Grant history through secure login to the National Student Loan Database at www.nslds.ed.gov. This site is created to collect information from schools and lenders so that aid can be more efficiently processed. It is a secure site, and only authorized personnel can log on. It is updated every 30-60 days by the schools and lenders, so recent disbursements may not show immediately.
If a borrower disputes the terms of the loan in writing and the holder of the loan is unable to resolve the dispute, a borrower may seek the assistance of The Federal Student Aid Ombudsman of the Department of Education. The Federal Student Aid Ombudsman will review and attempt to informally resolve dispute and may be reached at 1-877-557-2575 or www.ombudsman.ed.gov.
A Direct Consolidation Loan Program is available that allows a borrower to consolidate (combine) one or more of the eligible federal education loans into one loan. For more details and information, go to www.loanconsolidation.ed.gov.