Q & A
on the Parent Loan for Undergraduate
Students (PLUS)
Who can borrow a Parent Loan for Undergraduate
Students (PLUS) loan?
Only the parent, stepparent, or legal guardian of a dependent student.
Can a student ever borrow a PLUS loan?
Yes, but only if you happen to be a student who is also the parent
of a child who is currently enrolled in college. In that case, you
may take out a loan to pay the educational costs for your child, but
not a PLUS loan for yourself.
What if I am denied a PLUS loan?
If denied a PLUS loan, you or your child may contact the Office of
Student Finance (OSF) by calling 612-624-1111 or 1-800-400-8636, or
writing to OSF at 200 Fraser Hall, 106 Pleasant St. S.E., Minneapolis,
MN 55455-0422, to request information on other student loan funds.
What is the PLUS interest rate?
The interest rate is fixed at 7.9 percent. A 4 percent origination
fee is deducted from each disbursement. A 1.5 percent rebate is currently
added back to your disbursement. Note: interest
begins to accumulate on the date of the first loan disbursement.
When
does repayment begin?
The repayment period begins on the day after the loan is fully disbursed.
Your first payment is due within 60 days after the final loan disbursement.
Repayment would begin 60 days after your final disbursement. Note:
If, at any time, the student becomes ineligible, you will be billed
for PLUS loans. This typically happens when the student cancels registration
or s/he is over-awarded due to a change in registration status.
How much will my payments be? How
long do I have to repay the loan?
Several repayment options allow you to repay PLUS loans in a way that
best suits your circumstances:
- The Standard Repayment Plan requires fixed
monthly payments of at least $50 over a fixed period of time (up
to 10 years).
- The Extended Repayment Plan allows loan repayment
to be extended over a period from generally 12 to 30 years, depending
on the total amount borrowed. You still pay a fixed amount of
at least $50 each month, but the monthly payments usually will
be less than under the Standard Repayment Plan.
- The Graduated Repayment Plan allows payments
to start out low and increase every two years. Your monthly payments
must be at least half of what you would pay under the Standard
Repayment.
Payments will go to the U.S. Department of Education's Direct Loan
Servicing Center, where staff will provide the information you need
to decide which plan is right for you. You may change the repayment
plan later if your circumstances change.
What happens if, as a parent, I'm
already repaying a Direct PLUS Loan, then I take out another one
for the same or another child? How does this affect my monthly payments?
Your Direct Loan Servicing Center will send you one monthly bill
for both loans. Depending on the repayment plan you have selected
and the amount of your loans, your monthly payment may increase.
May I reduce the loan amount offered?
At the time your child submits her/his Financial Aid Notice (FAAN),
s/he should cross out the total offered and write in a lesser amount.
Do I pay any fees?
An origination fee based on 4 percent of the loan principal is
deducted from each loan disbursement. A 1.5 percent rebate is currently
added back to your disbursement
How much money can I borrow?
Your child will be offered the maximum amount that s/he is eligible
to borrow, but you may reduce that amount if you do not need it.
You may borrow any amount up to the cost of your child's education,
minus any other financial aid s/he may receive. There is no borrowing
limit based on a determination of your financial need. We encourage
you to borrow only the amount you need at the time the loan is offered.
You can always request the difference later if it is needed.
Can I make changes to the loan amount
during the school year?
Yes. If your circumstances have changed since the time you accepted
the loan, you may request an adjustment to your loan amount. You
may increase the amount if you did not accept the full amount of
the loan offered to you. To reduce the amount, please complete a
Loan Cancellation/Reduction form available for pickup at the One
Stop Student Services Center, 200 Fraser Hall, Minneapolis campus,
or by writing to the Office of Student Finance, University of Minnesota,
Twin Cities, 200 Fraser Hall, 106 Pleasant St. S.E., Minneapolis,
MN 55455-0422.
How can I get more information on the
PLUS?
You may request published information from the federal government
by calling their toll free number 1-800-433-3243, or go online.
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