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FALL 2010 - SPRING 2011 FEDERAL DIRECT PARENT PLUS LOAN

The Federal Direct Parent PLUS Loan is a low interest loan available to assist dependent students admitted and enrolled in an undergraduate degree program. The borrower of this loan is the parent of the dependent undergraduate student. To be eligible for the Direct Parent PLUS Loan, the parent borrower should have no adverse credit history.

The Direct Parent PLUS Loan is an unsubsidized loan, meaning interest begins to accumulate on the loan from the time it is disbursed. The first payment is due  within 60 days after the loan is fully disbursed (parents have the option of deferring repayment until the student ceases to be enrolled at least half-time). For more information please refer to the Federal Student Aid Web Site.

 

Interest rates on Direct Parent PLUS Loans can be found here.

NOTE TO PARENT PLUS LOAN APPLICANTS :

Starting with the Fall 2010 term, FAU is participating in the Federal Direct Parent PLUS Loan Program. With this change, all Parent PLUS loans will be processed through the U.S. Department of Education. Parents who have previously received Parent PLUS Loans through a bank will be required to sign a new Parent PLUS Loan Master Promissory Note (MPN) with the U.S. Department of Education.

 

The parent’s eligibility for a Direct Parent PLUS Loan is determined by a credit check conducted by the U.S. Department of Education. As the outcome of the credit check is valid for a period of only 90 days, FAU recommends that parents apply for a Direct Parent PLUS Loan no earlier than 60 days prior to the start of the enrollment period for which the loan is intended and the student is eligible. In cases where a previous credit approved outcome expires prior to the loan’s disbursement, a new credit check / approval will be required for the loan to disburse. The outcome of the new credit check could result in the previously approved loan being denied. With the above in mind, to ensure students and parents have the access to anticipated Parent PLUS funds, FAU recommends parents apply for Parent PLUS Loans no earlier than 60 days prior to the start of the enrollment period for which the loan is intended and the student is eligible. 


The FAU Direct Parent PLUS Loan Process

The FAU Direct Parent PLUS Loan process consists of the following steps:

1. The parent should confirm that the student satisfies the
  following Parent Plus Loan Prerequisites:
       
  1. The student on whose behalf the PLUS Loan is borrowed must be admitted to FAU as an undergraduate degree seeking student. The student must meet all general aid eligibility criteria (including the Satisfactory Academic Progress Policy) and be enrolled in 6 or more credits for the semester for which the Parent PLUS Loan is intended. See the Policies/Rules and Regulations section of the FAU Office of Student Financial Aid web site for detail of this criteria.
  1. FAU must receive an electronic transmission of a valid (non-rejected) Student Aid Report from the U.S. Department of Education for the student on whose behalf the PLUS Loan is borrowed. This report is generated after the student has filed a Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov. To be eligible for a Parent PLUS Loan, the student must be classified as a dependent student by the U.S. Department of Education.
  1. FAU must receive and process all documents required for the student to be eligible for federal student aid (including all required verification documents). Instructions on how to review the status of all required documents can be obtained from the Student Requirements link on the FAU Office of Student Financial Aid web site.

 

2. The parent must submit a Direct Parent PLUS Loan request
  to the U.S. Department of Education at the link below. After logging in, parents should select Complete PLUS Request Process from the Manage My Direct Loan menu box and follow the on screen instructions. This should be done no earlier than 60 days prior to the start of the enrollment period for which the loan is intended and the student is eligible - see above. When this is done, a credit check will be conducted on the parent by the U.S. Department of Education. For questions or concerns regarding the result from the credit check, the parent may contact the U.S. Department of Education at 1-800-557-7394 (8am-8pm EST, Monday through Friday) or 1-877-461-7010 TDD/TYY.


         

3. If the credit check results in the parent being denied PLUS
 

loan eligibility, the parent may either: 

       
  1. Appeal the credit decision with the U.S. Department of Education.
  1. Attempt to obtain loan approval with an endorser (similar to a co-signer).
  1. Elect to abandon pursuit of the PLUS Loan.

    

  If the parent has been denied and does not want to pursue
  the PLUS loan any further (either through appeal, endorser, or having another parent apply), the student may submit a Stafford Loan Revision Request to the FAU Office of Financial Aid to request an additional Unsubsidized Stafford loan in lieu of the PLUS loan. Freshman and sophomore students may be eligible for up to $4,000 and junior and senior students may be eligible for up to $5,000 additional Unsubsidized Stafford Loan funding.
       
4. If the loan request is approved, the parent should confirm
  that they they have a complete and valid Direct Parent PLUS Loan Master Promissory Note (MPN) on file with the U.S. Department of Education. If approved, the parent will have an option of completing the Direct Parent PLUS Loan MPN following approval as part of the application process.
  

 

 

Parent receiving a Direct Parent PLUS Loan for the

  

first time must complete a Direct Parent PLUS Loan MPN with the U.S. Department of Education prior to receiving their first loan disbursement .   The parent will be required to use their U.S. Department of Education issued PIN (the FAFSA PIN) to complete an electronic MPN on line. For additional information about the PIN, visit the the PIN customer service web page.

      
  Parents who have previously received a Direct Parent PLUS Loan disbursement for their FAU student’s attendance are NOT REQUIRED to complete a new MPN each year . In most cases, additional Direct Parent PLUS Loans can be made under the same MPN for a period of 10 years from the MPN signature date.
    

A Direct Parent PLUS Loan is a loan directly from the U.S. Department of Education

IT IS NOT A LOAN THROUGH A BANK

5. If the request is approved and Direct Parent PLUS MPN
  completed, the parent must submit a Direct Parent PLUS Addendum to the FAU Office of Student Financial Aid. Through this form, the parent will verify the requested loan amount and specify the enrollment period for which the loan is intended.
       
6. Assuming the request is approved and the student and
  parent have satisfied the requirements specified in Steps (1)-(5) above, FAU will transmit a Federal Direct Parent PLUS Loan origination to the U.S. Department of Education in the amount requested by the parent or the student’s maximum eligibility (defined as the student’s cost of attendance less all other assistance), whichever is lower. Loan funds will disburse approximately the third week of the term and applied to the student’s FAU balance. Any PLUS Loan funds which exceed the student’s FAU balance will be mailed to either the parent borrower or the student as specified by the parent in the application process.
  

 

Last Modified - 06/24/10 08:38:49

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