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Only one credit worthy parent is able to apply for a loan each academic year for their dependent undergraduate student. Credit worthy parent is defined as natural, adoptive or stepparent. The student must be enrolled in school at least half-time and must maintain Satisfactory Academic Progress. The Office of Financial Aid determines the amount of Direct PLUS loan eligibility in accordance with federal requirements. Eligibility for the Direct PLUS loan depends on a modest credit check that determines if the parent has what is termed an “adverse credit history.” An “adverse credit history” is defined as being more than 90 days late on any debt or having any Title IV debt within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off. As of July 1, 2008, new federal legislation allows parents to choose to defer payments on a Direct PLUS loan until six months after the date the student ceases to be enrolled at least half-time. Accruing interest could either be paid by the parent borrower monthly or quarterly, or be capitalized quarterly. In addition, Special Provision for Parents Delinquent on Mortgage Payments have been made that will allow lenders to consider parents eligible for Direct PLUS loans even if, during the period Jan. 1, 2007, through Dec. 31, 2009, the parents are or were:
If a parent is denied for a Direct PLUS Loan, then the dependent student may be eligible to borrow up to an additional $4000 in Direct Unsubsidized loans if a freshman or sophomore and $5000 if a junior or senior. Please note that if one parent is approved and another parent is denied for the same student, then the dependent student is ineligible for the additional Direct Unsubsidized loans per federal regulations.
Parents may borrow up to their student's total cost of attendance less other financial aid received such as grants and scholarships. On the student’s financial aid award package this is listed as an “estimated Direct PLUS loan,” which will show you how much could potentially be applied for to be borrowed. The total cost of attendance is determined by the Office of Financial Aid based on an average cost for tuition, books, room and board, travel, and miscellaneous expenses for the academic year. It is important that each family fully understand how a Direct PLUS loan will impact them financially. Most financial experts advise that one should not incur debt (excluding mortgage debt) that results in total monthly payments (debt-to-income ratio) exceeding 20% of your monthly gross income.
The interest rate is fixed at 7.9%.
For all Direct PLUS and Graduate PLUS loans made between July 1, 2011 and June 30, 2012, the origination fee will be 4.00% of the principal loan amount. However, there is an automatic rebate amount equal to 1.50% of the principal loan amount. Therefore, the actual total up-front fee is only equal to 2.50% of the principal loan amount. The 2.50% fee is deducted from the principal at each disbursement.
To retain the up-front interest rebate of 1.50%, a borrower must make the first twelve monthly payments on time. If all of the twelve monthly payments are not made on time, the rebate amount is added to the borrower's principal loan balance, which will increase the loan amount that must be repaid.
Please note that approved PLUS loans will be evenly split between appropriate terms. Apply for 2011 - 2012Please be aware that any refunds from Direct PLUS loans will be sent directly to the parent borrower unless the parent checked on the application that funds should be given directly to the student. If the parent and/or student borrower did not set up direct deposit with the Student Accounting Office, then any Direct PLUS refunds will be sent via paper check to the parent borrower’s address.
Please note that approved PLUS loans will be evenly split between appropriate terms.
Apply for 2011 - 2012
Please be aware that any refunds from Direct PLUS loans will be sent directly to the parent borrower unless the parent checked on the application that funds should be given directly to the student. If the parent and/or student borrower did not set up direct deposit with the Student Accounting Office, then any Direct PLUS refunds will be sent via paper check to the parent borrower’s address.
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Jackson, MS 39216
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