| |
Federal
Parent Loan for
Undergraduate Students (PLUS) |
Private
Loans* |
| Program
Description |
Federal
PLUS Loans are available to parents or stepparents of
dependent undergraduate students attending school at least
half time.
PLUS loans are solely the responsibility of the
parent borrower. |
Private
loans are generally available to undergraduate and
graduate students enrolled at least half time at eligible
colleges and universities.
The loan is the responsibility of the student;
however, the parent or any creditworthy adult can usually
serve as a co-borrower. |
| Eligibility |
PLUS
loans are not dependent upon your family’s income or
assets, and no collateral or cosigner is required.
You must, however, meet certain credit criteria. |
Terms
vary by lender, but often offer a no-income requirement
for students.
A co-borrower may be required for foreign students
and students with no credit or an insufficient credit
history. |
| Loan
Limits |
You
can borrow up to the full cost of education (minus other
financial aid). |
Most
programs allow your student to borrow up to the full cost
of education (minus other financial aid). |
| Interest
Rates |
Low
variable interest rate will not exceed 9% (reset each July
1, based on T-bill rates).
The current rate is at an all-time historic low of
4.17%, for the period of July 1, 2004 to June 30, 2005.
Interest payments are tax-deductible. |
Interest
rates are often variable, tied to Prime or LIBOR.
These rates are not capped and are typically based
on the student’s or co-borrowers credit score. |
| Fees |
A
3% federal origination fee and insurance premium of up to
1% may be deducted from the loan proceeds prior to
disbursement. |
Fees
may be incurred at disbursement and/or repayment based on
the student’s or co-borrowers credit score. |
| Repayment
Terms and Plans |
Repayment
typically begins within 60 days of the last disbursement.
You can take up to 10 years to repay your PLUS
loans, and you can prepay without penalty.
Repayment plans may vary by lender, but they
generally include standard, graduated, and extended terms. |
Repayment
may begin immediately after disbursement, depending on
your lender.
Students usually have a choice of repayment plans
and can prepay without penalty. |
| Deferments |
You
may qualify for a variety of deferment options; some
lenders even offer deferments while your student is in
school.
Loan(s) can also be cancelled in the event of death
or total disability.
Contact the lender for details. |
Depending
on the lender, payments may be deferred while the student
is in school at least half-time.
Borrower may not be able to have loans cancelled in
the event of death or total disability, unless they
purchase an additional option plan. |
| Pre-approval |
Available
through most lenders, this option allows you to ensure
that you are credit-eligible for a loan prior to
completing the full application process.
The pre-approval process can typically be completed
by phone, Web, or fax. |
Available
through most lenders, this option allows the student
and/or co-borrower to ensure they are credit-eligible for
a loan prior to completing the full application process.
The pre-approval process can typically be completed
by phone, Web, or fax. |
| Additional
Information |
Some
lenders offer credit services that assist you with
resolving credit problems or those who offer additional
saving benefits, such as an interest rate reduction for
direct debit of loan payments.
Contact the lender for details. |
Some
lenders offer a co-borrower release options after a
specified number of on-time payments.
Contact the lender for specific details. |
