PARENT LOAN FOR UNDERGRADUATE STUDENT (PLUS LOAN)
What is a PLUS Loan?
Student Aid Centers of America is committed to finding a variety of ways to finance your child's education. One such option is a PLUS (Parent Loan for Undergraduate Student). A PLUS loan is a federally-sponsored student loan that can cover up to 100% of your undergraduate, dependent child's cost of attending school (less any financial aid). PLUS loans are a cost-effective alternative solution to tapping your home equity line or securing a private loan with potentially high interest rates. Additionally, you can obtain a PLUS loan without collateral and with a minimal credit rating.
- No collateral required for this student loan
- Less than perfect credit ratings not an issue
- Cover your child's cost of attending school (less any financial aid)
- Money saving rate reduction programs available through the Student Aid Centers of America
- No need to risk your home or personal assets
- Early payment with no fees lets you pay off your student loan without a penalty
- Payment suspensions of your student loan available
- Two parents can share the cost of their child's education
- A cap on this student loan's interest rates as mandated by the federal government
- Mid-year PLUS loans available
- Tax deductions may be available for this student loan
Have Questions? Call One of Our Educated Student Loan Counselors at 1-1-888-947-2356 for assistance.
Eligibility Requirements:
PARENTS
Parents of undergraduate students who meet the following eligibility requirements may apply for a PLUS loan:
- A U.S. citizen or permanent resident
- Securing money for a full-time or half-time dependent, undergrad student
- Credit secure
- Not in default on any student loans
STUDENTS
Your dependent child must be:
- Less than 24 years of age
- A full-time or half-time undergrad student
- Unmarried and with no dependents
- Not a word of the court
- Not a veteran
Mid-Year Loans
If you find you need extra funds for school, you may still apply for a PLUS loan mid-school year. The deadlines vary from school to school. In most cases, the deadline is just prior to the end of the school year. You should contact your school's financial aid department to learn the exact deadline.
Have Questions? Call One of Our Educated Student Loan Counselors at 1-1-888-947-2356 for help.
PLUS Loan Interest Rates and Fees
PLUS loan rates disbursed after July 1, 2006 are fixed at 8.5%. PLUS loan rates disbursed before July 1, 2006 are variable (capped at 9%) and adjusted annually. The current adjustable rate through June 30, 2007 is 7.94%. Rates for this student loan will never exceed 9%, by federal mandate.
• Loan Fees
A total of 4% origination and guarantee fees are due upon origination. These fees in this federally sponsored student loan program are standard and set by the industry. The fees are broken down as follows:
• Origination Fee
Each time money is disbursed, a 3% origination fee of the principal is deducted. For example, if the school certifies $15,000 for a school year, $450 is added to your total. If two disbursements for this student loan program are made during the school year, the origination fee amount withdrawn is divided in half ($225 is taken out each of the two times a disbursement is made). This fee is given to federal government to offset the cost of the PLUS loan program.
• Guarantee Fee
As a safeguard against fraud, a 1% guaranty fee is due as insurance against default on this student loan.
• Tax Deduction
As of 2001, you could be eligible to deduct up to $2,500 in interest from a PLUS loan. Section 221 of the Internal Revenue Code allows some student loan borrowers to deduct a portion of their interest costs for a given year. This deduction may be contingent on the loan's disbursement date and your income. Please talk with your tax advisor for more details.
A PLUS loan is a supplemental form of student financial aid. Your child must complete a Free Application for Federal Student Aid (FAFSA). He/she will then receive an award letter from the school calculating his/her financial aid subtracted from the cost of attendance. The amount the school certifies for your PLUS loan is equal to the total of your Expected Family Contribution (EFC), the unmet need and the PLUS loan's 3% origination fee. Contact your school's financial aid department if you have any extenuating circumstances (medical expenses for your child or recent unemployment) that may impact the cost of attendance or expected family contribution.
For example, if your school certifies $24,076.25 out of a requested $30,000 but you have not received your award letter yet. You may still apply for a PLUS Loan even without your award letter. Just make sure you request up to the cost of attendance plus the 3% origination fee so you are guaranteed to receive the full cost and won't have to apply for a mid-year loan.
Calculating a PLUS Loan from Your Award Letter
Cost of Attendance (COA) |
$30,000 |
Expected Family Contribution (EFC) |
- $10,000 |
Financial Aid #1 |
- $2,625 |
Financial Aid #2 |
- $4,000 |
Unmet Need |
$13,375 |
EFC + Unmet Need |
$23,375 |
3% Origination Fee |
- $701.25 |
PLUS Amount to Request |
$24,076.25 |
Have Questions? Call One of Our Educated Student Loan Counselors at 1-1-888-947-2356 for help.
Money Saving Programs from Student Aid Centers
Student Aid Centers of America offer PLUS borrowers three ways to reduce their interest rate and get reimbursed for fees paid on the loan.
- Reduce your rate by 0.25% -- and enjoy convenience and peace of mind - when your payments are automatically deducted from your bank account.
- Save money by getting the 1% guaranty fee waived
- Be rewarded for on-time, consistent payments! Make 36 consecutive, on-time payments, and we'll give you back 3% of your remaining principal. (If you miss a payment, are late with a payment or make an insufficient payment, this credit-back option is not available and may be reversed if already paid out.
Student Aid Center 's lenders are committed to offering programs to help you manage your student loan debt. Our programs to reduce interest rates and fees vary so check back with us frequently for the most up-to-date information.
Cost of Attendance
Full-Time or Half-Time Students:
- Tuition and fees for your schooling
- Student room and board for on-campus housing
- Housing and food allowance for off-campus students
- Funds for textbooks, supplies, transportation, loan fees
- Miscellaneous costs associated with your education, including computer and software
- Dependent care related to a disability
Less Than Half-Time Students:
- Student Tuition and fees
- Funds for textbooks, supplies, transportation
- Dependent care related to a disability
Have Questions? Call One of Our Educated Student Loan Counselors at 1-1-888-947-2356 for help.
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