The Federal PLUS is a loan for the parents of dependent undergraduate students to help pay for their dependent child's education. The Federal PLUS Loan is not based on financial need; however, SPC requires the completion of the FAFSA (www.FAFSA.ed.gov) application before processing a PLUS loan.

Parents may borrow the full yearly cost of the student's education (the Cost of Education is established by the Financial Assistance Services Office), minus all other eligible financial aid. For example, if the institutional cost of attendance is $10,000 and you receive $4,000 in other financial aid, your parents can borrow up to $6,000 in the Federal PLUS.

There is no cumulative borrowing limit and the basic repayment term for the Federal PLUS is 10 years. Repayment of the PLUS loan typically begins 60 days after the final loan disbursement unless other arrangements are made with your lender. Effective July 1, 2008 parents can choose to have the repayment of the PLUS loan deferred until six months after the student graduates or stops attending. Interest that accrues during that time can be paid monthly or quarterly, otherwise it will be capitalized quarterly.

Interest begins to accumulate at the time the first disbursement is made. The interest rate will be fixed for PLUS Loans that are disbursed on/after July 1, 2006 and will cary an interest rate of 8.5%.

A credit check is required for a PLUS pre-approval. If a parent's credit check yields a denial due to adverse credit history, federal regulations allow the student to borrow additional Unsubsidized Stafford Loan funds. When completing an Online PLUS Pre-approval, if the result is a denial, our office will receive notification of that denial electronically and the student can then request additional loan funds from the unsubsidized loan program.

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