Federal Direct PLUS Loan
Also known as a Parent Loan, the Federal Direct PLUS Loan, is an excellent option for paying for college. It allows a parent to borrow to assist a son or daughter's pursuit of higher education without paying for college all up front.
So how does it work?
- A FAFSA is required to process any Federal loan
- One parent may borrow the PLUS loan each loan period (both parents cannot borrow during the same term, but they can alternate semesters) in an amount up to the Cost of Attendance less other financial aid.
- The PLUS Loan has a 7.9% fixed interest rate with a 4.212% origination fee that is retained by the U.S. Department of Education.
- A student must be a dependent undergraduate, enrolled at least half-time (6 credit hours).
- The PLUS Loan is based on a parent's credit-worthiness and may take up to 10 years to repay the loan in full, if desired.
- If a parent decides to borrow a PLUS Loan for each year the student is in school, the ability to consolidate all loans for one monthly payment is possible.
For every $5,000 borrowed, a parent can expect to incur a $60 monthly payment. For example:
||Total Amount Paid*
*These figures are based on a 10-year standard repayment period. Minimum $50 payment. You may contact Direct Loan Servicing for additional repayment options, including in-school deferment and forbearance.
Applying for a PLUS Loan
To apply, parents must complete two steps: complete the WJC PLUS Request Form and a Master Promissory Note.
- Print the WJC Plus Request. Submit it to the Jewell Financial Aid Office so that your account is up to date. Any changes to a PLUS Loan only require a new Request Form be submitted to Jewell.
- Complete a Master Promissory Note (MPN) online. The MPN is the legal document between the parent borrower and the U.S. Department of Education's Direct Loan Program.
Once both steps are completed, WJC will add the requested PLUS Loan amount to the student account. Loan proceeds will be applied to the account on the first day of classes, or within two business days if the term has begun.
If your PLUS Loan is credit denied
Parents who have been denied the PLUS Loan due to credit reasons allows their student additional eligibility for Federal Direct Loans. The U.S. Department of Education states that if a parent is trying to assist, and cannot due to credit-worthiness, then the student is eligible for additional unsubsidized loan money. The amount of eligibility is based on the student's year in school; $4,000 for first and second-year students; $5,000 for third and fourth-year students.
Financial aid proceeds will be applied against all student charges including tuition, fees, room and board shown on the student account. In addition, financial aid proceeds will be applied to cover allowable charges other than tuition, fees, room and board unless the parent provides the William Jewell College Business Office a statement in writing requesting these other charges not be paid with financial aid proceeds. This written request will take effect on the date that the Business Office receives it and is not retroactive.