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Federal Direct Parent Loan for Undergraduate Students The Parent Loan for Undergraduate Students (PLUS) is a low-interest federally insured loan for parents 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. Credit checks are required however the Direct Lending Program uses a more lenient credit assessment when compared to most FFELP lenders. Processing fees will be deducted from the total amount borrowed. If the parent is denied the Federal Direct Parent PLUS Loan and elects not to use an endorser, the student may be eligible for the additional Federal Direct Unsubsidized Loan not to exceed the student’s Cost of Attendance. Eligibility for Parent PLUS Loan Parent may apply for a Parent PLUS Loan if the student is:
Borrowing Limits 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 is denied the Federal Direct Parent PLUS Loan and elects not to use an endorser, the student may be eligible for the additional Federal Direct Unsubsidized Loan not to exceed the student's Cost of Attendance (COA). The first and second year students may borrow up to $4,000; the third and fourth year students may borrow up to $5,000. The student must sign his/her award letter to request the additional Federal Direct Unsubsidized Loan to the student's Award.
Applying for a Parent PLUS: Step 1: The Parent will complete the Direct PLUS Loan application at www.studentloans.gov. Once on the site, “Sign In” under the “Manage My Direct Loan” located on the left side of the page. You will need your social security number, date of birth and your Federal Student Aid PIN to sign in. To complete the Parent PLUS Loan application, select the link titled "Start PLUS Application Process" and select the link for the "Parent PLUS”. The Department of Education will automatically notify Methodist University of the loan decision. If the borrower requests a paper copy of the MPN be sent for completion, there are more steps involved before the Direct Loan can be approved and disbursed, possibly causing delays in receiving loan funds. Please note: Once the loan is completed and processed, the loan will then be assigned to a servicer by the Department of Education. The servicers are ACS, Great Lakes Education Loan Services, Nelnet, Sallie Mae Corporation, and AES/PHEAA. All questions after disbursement of the loan should be directed to the servicer. Step 2: The parent will complete a PLUS loan Request Form (LRF) for the 2010-11 academic year and submit this form to the Office of Financial Aid at Methodist University. Your loan can NOT be processed until this form is received. Once we receive this form and know how much you want to borrow, we can certify your PLUS loan with the Department of Education. If you want to borrow the difference of the cost of Methodist University minus any financial aid received, please contact the Business Office at 1-800-488-7110 ext. 7619; however, you can borrow more.
How can I check the status of my PLUS Loan? Borrowers may check the status of their PLUS Loan by contacting the Department of Education Applicant Services at 1-800-557-7394. How will my loan be issued? According to institutional policy, 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. Repayment Terms The Parent PLUS Loans are a fixed-rate loan with a 7.9% interest rate. Interest begins accruing from the time of full disbursement. A 2.5% origination fee (4% origination fee - 1.5% up-front rebate = 2.5% origination fee) will be deducted from each disbursement. Repayment begins within 60 days after the date of the final disbursement. Parent interested in deferring the Parent PLUS Loan must contact the Department of Education Applicant Services at 1-800-848-0979 for a deferment application. THE DEFERMENT PROCESS WILL NEED TO BE COMPLETED ONCE THE FIRST DISBURSEMENT HAS BEEN RECEIVED AT METHODIST UNIVERSITY BEFORE THE PARENT PLUS WILL BE PLACED IN DEFERMENT STATUS. Loan Cancellation Parent Borrowers have the right to cancel all or part of federal loan disbursement within 14 days of official notification of the disbursement to the university. Submit a written request to the Office Financial Aid within 14 days from the disbursement date. Official notification will be sent to the borrower notifying the borrower of the funds credited to university account. The written request to cancel a Parent PLUS loan may be submitted by a handwritten, typed, or printed statement bearing an original signature submitted by mail, in person, or by fax (no e-mail can be accepted). Canceling any loan disbursement could cause a balance to be due on the university account in the Business Office which the student will be responsible for paying. This is more likely to be true if excess funds (credit balance) have already been distributed via a check. Repayment after the designated time period 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 (the parent borrower for parent loans) 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. OmbudsmanIf 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. Loan ConsolidationA 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. |
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