PLUS loan
Encyclopedia
A PLUS Loan is a student loan
offered to parents of students enrolled at least half time in eligible programs at participating and eligible post-secondary
institutions or graduate and professional students at participating and eligible postsecondary institutions.
and Perkins
loans offered to students.
program, the PLUS program changed to a higher, but fixed rate, structure for loans disbursed after midnight, July 1, 2006. The rate offered through the Direct Loan Program will be 7.9%.
Additionally, the PLUS program was made available for graduate and professional students to borrow to finance their own educations, commonly referred to as the Grad PLUS
loan.
Amendments were made to the PLUS Master Promissory Note in an addendum to accommodate the changes in eligibility as well as the new fixed rate structure.
Student loan
A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education...
offered to parents of students enrolled at least half time in eligible programs at participating and eligible post-secondary
Higher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...
institutions or graduate and professional students at participating and eligible postsecondary institutions.
Similarities with Stafford and Perkins loans
PLUS loans share some similarities with the StaffordStafford loan
A Stafford Loan is a student loan offered to eligible students enrolled in accredited American institutions of higher education to help finance their education...
and Perkins
Federal Perkins Loan
A Federal Perkins Loan, or Perkins Loan, is a need-based student loan offered by the U.S. Department of Education to assist American college students in funding their post-secondary education. The program is named after Carl D. Perkins, a former member of the U.S...
loans offered to students.
- Offered under Title IV of the Higher Education Act of 1965Higher Education Act of 1965The Higher Education Act of 1965 was legislation signed into United States law on November 8, 1965, as part of President Lyndon Johnson's Great Society domestic agenda. Johnson chose Texas State University–San Marcos as the signing site...
(with subsequent amendments) and are therefore backed by the full faith of the United States Government
- Can be consolidated through the federal student loan consolidationFederal student loan consolidationIn the United States the Federal Direct Student Loan Program include consolidation loans that allow students to consolidate Stafford Loans, PLUS Loans, and Federal Perkins Loans into one single debt. This results in reduced monthly repayments and a longer term for the loan...
program
Differences from Stafford and Perkins loans
- For Direct PLUS Loans first disbursed before July 1, 2008, the repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, you may defer repayment while you are enrolled at least half-time. The repayment schedule for Direct PLUS Loans disbursed on or after July 1, 2008 is the same as the schedule for Stafford loans.
- The interest rate is fixed at 7.9% and charged from the date of the first disbursement until the loan is paid in full
- When taken by a parent, becomes a commitment by the parent, rather than the student
- Can be incurred in amounts that cover up to the entire cost of education (including living expenses), less other financial aid
- Offer different repayment plans, though there is no interest rate or accrual relief involved in any of the plans
- Eligibility is based on the parents or graduate students in question not having an adverse credit history
Changes as of July 1, 2006
Like the Stafford LoanStafford loan
A Stafford Loan is a student loan offered to eligible students enrolled in accredited American institutions of higher education to help finance their education...
program, the PLUS program changed to a higher, but fixed rate, structure for loans disbursed after midnight, July 1, 2006. The rate offered through the Direct Loan Program will be 7.9%.
Additionally, the PLUS program was made available for graduate and professional students to borrow to finance their own educations, commonly referred to as the Grad PLUS
Grad PLUS
Graduate PLUS is a type of federal student aid, in the form of student loans, which is available to graduate and professional students. Similar to the Parent PLUS loan for parents of dependent undergraduate students, the Graduate PLUS loan is an unsubsidized federally guaranteed education loan...
loan.
Amendments were made to the PLUS Master Promissory Note in an addendum to accommodate the changes in eligibility as well as the new fixed rate structure.
Changes as of July 1, 2008
For PLUS loans made to parents that are first disbursed on or after July 1, 2008, the borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or wait until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.External links
- U.S. Dept. of Education: PLUS Loans (Parent Loans)
- U.S. Dept. of Education: PLUS Loans for Graduate or Professional Students