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What are Federal Plus Loans?

Federal Plus Loans enable parents of dependent students with good credit history to borrow for each daughter or son who is enrolled at least half time. Plus loan eligibility is not based on financial need. So these loans are made regardless of income level and are offered by banks, savings & loans, credit unions, etc. Parents must pass a credit check with the lending institution to be eligible.

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. 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 PLUS Loan will impact them financially. Generally, one should not incur debt that results in total monthly payments exceeding 50% of your monthly gross income.

Interest Rates

The interest rate is variable and is reset each July, based on the 91-day Treasury Bill plus 3.1%, the rate is currently 4.22% and cannot exceed a "cap" of 9%.

Loan Fees

Parents are required to pay fees of up to 4% of the principal of the loan. These include an origination fee of 3%, charged by the federal government, plus a guarantee fee of up to 1%, charged by the guarantee agency. These fees are deducted from the principal at each disbursement.

Example:

Loan Amount	$11,000
Total Fees (4%)	-$440
Amount disbursed Fall	$5,280
Amount disbursed Spring	$5,280