Loan Programs

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  • Direct PLUS Loans

    What are Direct PLUS Loans?

    Advantages of PLUS Loan

    • Option to defer payment until student graduates or drops below half time.
    • A cost-effective alternative to depleting savings or retirement accounts, using current income or borrowing against home equity.
    • The fixed interest rate is 7.9%.
    • There is no prepayment penalty.
    • The credit criteria are generally more lenient than for private loans.
    • In cases of economic hardship, repayment may be deferred for up to three years.
    • In the event of permanent disability or death of the borrower or student, your loan will be forgiven.


    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:

    • No more than 180 days delinquent on a mortgage payment on primary residence
    • No more than 180 days delinquent on any medical bill payments
    • No more than 89 days delinquency on the repayment of "any other debt"

    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.

    How Much Can Be Borrowed?

    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.

    Interest Rates

    The interest rate is fixed at 7.9%.

    Loan Fees

    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.


    Loan Amount    $2,000
    Total up-front fee (0.50%)-$50
    Amount disbursed Fall $975
    Amount disbursed Spring$975


    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.


    How do my parents process a Direct PLUS application?

    1. If eligible, a student will be awarded an Estimated Direct PLUS amount on their Financial Aid Award Notification. A FAFSA must be filed to establish eligibility. 
    2. Parent borrowers who wish to utilize the Direct PLUS program should have their student accept the estimated Direct PLUS Loan on the Award Notification indicating the amount desired.
    3. The Direct Loan Program will conduct a pre-approval credit investigation and notify the parent as to approval or denial. If the loan is denied, the Office of Financial Aid will contact the parent about other borrowing options.
    4. If approved for a Direct PLUS Loan, the Direct Loan Program will send the parent a school-certified PLUS Loan master promissory note. (This contract can be valid for up to 10 years as long as the parent borrows every 12 months). Parents should review the master promissory note for accuracy, sign it, and return it to the lender.
    5. Loan proceeds will be sent directly to the University. The disbursement will reflect the amount of the loan less origination fees (4 %). The proceeds will be applied to the students account to clear any balances. Remaining funds will be direct deposited or mailed directly to the parent borrower in the form of a paper check.

    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.