Student Financial Aid and Scholarships :: University of North Texas

Federal Direct PLUS (Parent) Loan and Federal Direct PLUS for Grad Student Loan Program

(Information about the Federal Direct PLUS (Parent) Loan and the Federal Direct PLUS for Grad Student Loan Program continues to be updated as new information becomes known.  Please continue to check for revisions).

A few facts about the Federal Direct PLUS loan program:

• The Free Application for Federal Student Aid (FAFSA) must be completed for Federal Direct PLUS eligibility to be determined
• The Direct PLUS is a Federal non-need based program    
• The  PLUS loan has a fixed interest rate of 7.9% which is less than the lender-based FFELP PLUS loan rate of 8.5%
• The loan has an origination fee of 4%.  With the current rebate allowances for on-time payment, the actual origination fee charged is 2.5%.
• A credit check is conducted by the U.S. Department of Education to establish eligibility
• Loan repayment for Parent borrowers begins 60 days after final disbursement of funds (deferment is available upon request)
• Graduate student Federal Direct Loan PLUS borrowers  may defer payments while in school
• Online Entrance and Exit Counseling requirements must be satisfied according to U.S. Department of Education guidelines
• Borrowers must electronically sign a Federal Direct Loan PLUS Master Promissory Note
• Loan repayment for Parent borrowers begins 60 days after final disbursement of funds (deferment is available upon request)
• Borrowers cannot have an adverse credit history
• Parents and their dependent child must be U.S. citizens or eligible noncitizens

PLUS Loan FAQs:

• How do my parents apply for a loan?



Completing the Free Application for Federal Student Aid (FAFSA) is the method for making application for all aid programs, including the Parent Loan. Eligibility for a Direct Parent (PLUS) will be determined after UNT receives information from the Federal Central Processor and the Department of Education performs a credit history check. Borrowers will be notified if additional action is necessary.

• I borrowed a PLUS Loan at UNT last year. What do I have to do this year to get another PLUS Loan?



Complete the Free Application for Federal Student Aid (FAFSA) and eligibility for a Federal Direct PLUS award will be determined once UNT receives information from the Federal Central Processor. A Direct PLUS loan award can be ‘Accepted’ via myUNT.

• What if my parent is not eligible for Federal Direct PLUS Loan?



Eligibility for a Direct PLUS loan requires a credit history check conducted by the Department of Education who will also provide additional information (“Endorser Addendum”) to parents about other available options if there is adverse credit history.

• What is a Graduate Student Federal Direct PLUS Loan?



The Deficit Reduction Act of 2005 modified the Federal Direct PLUS program (formerly offering loans only to parents) and now allows graduate students to borrow PLUS loans as well. Students must request Student Financial Aid and Scholarships staff to review their eligibility for a Graduate Professional Federal Direct PLUS loan.

• Are there any loan fees?



In addition to loan interest, there are fees associated with borrowing a Federal Direct PLUS Loan. The U.S. Department of Education charges a 4% gross fee, and then gives borrowers an up-front rebate of 1.5%. This means that a net fee of 2.5% of the total amount borrowed each year will be charged. This fee is deducted from the loan by the Department of Education before the proceeds are credited to a student's account.

IMPORTANT NOTE ABOUT THE UP-FRONT REBATE: The up-front rebate reduces the fee borrowers pay at the point of loan origination. However, if the first 12 monthly payments are not made consecutively and on time, the U.S. Department of Education will add the 1.5% rebate back to your loan balance.

• What about repayment?


Repayment of the Federal Direct PLUS Loan principal and interest begins 60 days after the final disbursement for the loan period. Deferments are available for parents who wish to postpone repayment until after the dependent student has graduated or withdrawn.



• Where can I get additional information?

Go to http://www.direct.ed.gov/parent.html for more information.

 

Loan programs available:

• Federal Direct Stafford Loan
• Federal Direct Parent Loans for Undergraduate Students (FPLUS)
• Federal Direct Grad PLUS Loan
• Federal Direct Perkins Loan
• College Access Loan (CAL)
• Texas B-On-Time (BOT) Loan
• Alternative Loan Lenders
• Federal Direct Consolidation Loans Information Center

Student Financial Aid and Scholarships : : 1147 Union Circle - Eagle Student Services Center, Room 228 : : Denton, TX 76203
PHONE (940) 565-2302 : : TOLL FREE (877) 881-1014 : : FAX (940) 565-2738

Site last updated on September 15, 2006 : : For questions regarding content, contact Ed Turney at (940) 565-2302 or turney@dsa.admin.unt.edu.

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