Federal Direct PLUS Loans for Parents
A Federal Direct Parent Loan for Undergraduate Students (PLUS) loan is an unsubsidized loan available to the parents of dependent undergraduate students. If the parent borrower is denied a PLUS loan, the student may be eligible to borrow additional unsubsidized loan funds.
Eligibility
- The student must be attending at least half-time (6 hours).
- The parent(s) must have good credit history.
Parents with adverse credit may be eligible by obtaining an endorser.
- Completion of the FAFSA is recommended but not required.
Repayment
The parent, not the student, is responsible for repayment of the PLUS loan. The Federal Direct PLUS Loan for Parents has the following conditions:
- Repayment begins 6 months after the student ceases half time enrollment (6 hours).
- The repayment term is up to10 years.
- There is no interest grace period. Interest begins to accumulate when the first disbursement is made.
PLUS Loan Limits
The parent may only borrow up to the cost of attendance minus any other financial aid awarded.
Interest Rate and Origination Fee
For the 2008-2009 school year, the interest rate is 7.9%. An origination fee of up to 4% is charged.
Applying for a PLUS Loan
Applying for a Direct PLUS Loan is a two-step process. The parent completes a Federal Direct PLUS Loan Application for Parents. After the application is processed along with a credit check, the parent will be asked to complete the Direct PLUS Master Promissory Note (MPN). Do not complete the MPN until you receive approval from the Office of Student Financial Aid.
Federal Direct PLUS Loan Application for Parents
Parents must complete the Federal Direct PLUS Loan Application for Parents. The information obtained on the application will allow the Office of Student Financial Aid to complete a credit check. Please submit the application along with a copy of your social security card and driver’s license to the Office of Student Financial Aid.
Master Promissory Note (MPN)
After the Federal Direct PLUS Loan Application for Parents has been received and the PLUS Loan approved, the borrower will be asked to complete the Federal Direct PLUS Loan Master Promissory Note. UHCL utilizes the multi-year MPN. The MPN acts as a contract between the borrower and the U.S. Department of Education. By signing the MPN, a borrower promises to repay the amount loaned and agrees to other important terms of the loan. The MPN must be completed in order for the loan funds to be disbursed to the student’s account. The MPN may be signed online at https://dlenote.ed.gov/empn/completenew_plus.jsp.
Disbursements
The disbursement will arrive electronically, and the loan will be applied to the student's account. Tuition, fees and/or other balances will be deducted. Any disbursement in excess of the amount owed to UHCL is mailed to the home of the parent borrower unless the borrower authorizes a refund to the student. The parent borrower can authorize a refund to the student using the Federal Direct Parent PLUS Borrower Refund Request Form available with the Federal Direct PLUS Loan Application for Parents.
