PLUS loan
From Wikipedia, the free encyclopedia
| US Student loans |
| Regulatory framework |
|---|
| Higher Education Act of 1965 US Dept of Education FAFSA Cost of attendance |
| Distribution channels |
| Federal Direct Student Loan Program FFELP |
| Loan products |
| Perkins · Stafford PLUS · Consolidation |
PLUS (Parent Loan for Undergraduate Students) Loans are loans offered to parents of students enrolled full-time at American institutions of higher education. PLUS loans are similar and different from Perkins and Stafford loans in various respects:
Contents |
[edit] Similarities with Stafford and Perkins loans
- Offered under Title IV of the Higher Education Act of 1965 (with subsequent amendments), and are therefore backed by the full faith of the United States Government
- Available both through the Federal Direct Student Loan Program (FDSLP, also known as Direct) or from a private lender through the Federal Family Education Loan Program (FFELP)
- Can be consolidated through the College Consolidation Loan program
[edit] Differences from Stafford and Perkins loans
- Become due for repayment immediately, and there is only interest rate term
- Are a commitment by the parent, rather than the student
- Are subject to higher interest rates
- Can be incurred in amounts that cover up the entire cost of education, less other financial aid
- Offer different repayment plans, though there is no interest rate or accrual relief involved in any of the plans
- Eligibility is based on the parents' not having an adverse credit history
[edit] Changes as of July 1, 2006
Like the Stafford loan program, the PLUS program changed to a higher, but fixed-rate structure for loans disbursed after midnight, July 1, 2006. The rate offered through the Direct channel will be 8.5%, and FFELP loans will be the same, though price competition may result in lower rates and incentives.
Additionally, the PLUS loan program is now available for graduate and professional students to borrow to finance their own educations. That is, the program is expanding away from a parent-only based program to include graduate school students. The new option is commonly referred to as the Grad PLUS loan.
Amendments were made to the PLUS Master Promissory Note to accommodate the changes in elibility as well as the new fixed rate structure via an addendum.
[edit] External links
- FAFSA Loan: Insights into how private lenders sell student loans, from a former loan officer
- Resources to help graduate students learn about options; including the Federal PLUS loans or Grad PLUS loans, for financing their education
- http://www.studentloaninfo.net Information about Federal PLUS loans
