When you apply for the federal PLUS loan, you
will need to choose a lender to fund the loan. On
this
page
is
a list of commonly used lenders who provide a high
quality of customer service to our families. You
do not have to be a member of these lending institutions
to borrow a PLUS loan from them. If your lender
of choice does not appear on this list, you can still
select it to fund your loan, as long as it participates
in the Federal PLUS Loan Program.
Since PLUS loans are part of the federal government's
Title IV aid programs, eligibility requirements,
borrowing criteria, and repayment terms are set by
law. However, many lenders offer added
benefits for their borrowers, such as principal
rebates or interest rate reductions.
You may want to take these borrower benefits into
consideration
when selecting a lender.
Unlike the federal Stafford loan program, the PLUS
program does require the parent borrower to pass
a standard
credit check, so some parents do not qualify for
a PLUS loan. However, most lenders will work closely
with applicants to
help resolve
credit
issues. Parents with adverse credit can also apply
for the loan with a credit-worthy cosigner.
An eligible borrower can generally request up to
the difference of the cost of attendance minus
any
other
assistance
the student is receiving. Our office recommends
borrowing the PLUS loan for a full academic year
at a time. You should
contact your family's financial advisor to confirm
the maximum
amount you can request.
The PLUS loan typically enters repayment
within 30-60 days after full disbursement of the
loan. So,
a parent
who borrows a PLUS loan to cover both the fall and
spring semesters during an academic year should expect
payment to begin in late February or March after
the spring disbursement in January.
Many banks do offer forbearance options to the parent
borrower, permitting them to forego payments for
a set period of time. However, since interest accrues
on the loan during periods of forbearance, we strongly
recommend continuing to make interest payments in
order to reduce the overall cost of the loan.
Some lenders
sell their loans to a servicing agency once
it has been fully disbursed. Just be aware that if
your
lender uses a servicer, it will be the loan servicer
who will handle your payments and forbearance
requests.
Please note that PLUS loans are subject to a 3 percent
origination fee at the time of disbursement. |
