The Parent Loan for Undergraduate Students (PLUS) is a loan available to the parents of a dependent student. A parent may borrow to cover the cost of a college education on behalf of a child regardless of the family’s income.
- Parents may borrow up to the full cost of their dependent’s cost of education, less the amount of any financial aid received.
- PLUS loans borrowed during the 2014-15 academic year have a 7.21% fixed interest rate for the life of the loan. (The interest rate is reset each year for the life of the loan and is determined at a specific time each year based on the rate of the 10-year Treasury Bill plus 4.60%.)
- Parents have two repayment options:
- Begin repayments 60 days after the loan is fully disbursed. The minimum payment is $50 per month.
- Payments may also be deferred until the student has completed college or is enrolled in less than half time hours.
- The typical repayment term is 10 years.
- There is a 3% origination and 1.288% default fee automatically deducted from the disbursements.
- The parent is responsible for paying the interest that accrues on the loan from the time the loan is disbursed until it is paid in full.
- You must be a creditworthy borrower.
HELPFUL HINT: The first monthly payment on your PLUS loan (for a fall/spring student) is not due until February. This gives you five to six months in which you could save the amount of the PLUS loan to apply toward future years, thereby reducing the amount you would need to borrow in future years.
After the PLUS loan application has been completed, OC will be notified of the status of your PLUS loan. If (and only if) your PLUS loan is denied, OC will be authorized by federal law to offer your student an additional $4000 (for freshmen or sophomores) or $5000 (for juniors and seniors) unsubsidized Stafford loan.
The attached chart compares and contrasts the advantages/disadvantages of taking a Parent PLUS loan versus an alternative private student loan - PLUS vs Private Loan Chart.
To apply for a Parent (PLUS) loan, please use the following link - www.studentloans.gov.