Federal Parent PLUS Loans

A Federal Parent PLUS Loan is a low interest rate loan for parents that can be used to help pay for the college education of a dependent undergraduate child. The interest rate is fixed for the year following on loans first disbursed on or after July 1. There is a 4% loan origination fee deducted from the loan proceeds prior to disbursement.

Eligibility

1. Creditworthy parents of dependent students (Parent PLUS) are eligible to borrow in program as long as student is enrolled at least half time and degree seeking.
2. Borrower must be a U.S. citizen, U.S. national, or permanent resident of the United States.
3. Borrower cannot be in default on a federal education loan or owe a repayment of Federal Title IV aid.
4. Financial need is not a requirement to obtain a PLUS Loan, but the borrower is responsible for interest that accrues.

Award Amounts
PLUS Loan limits are determined by the estimated cost of attendance less any other aid.

Interest Rates and Fees
For PLUS Loans disbursed between July 1, 2008, and June 30, 2009, the interest rate is fixed at 7.9%. Beginning in Fall 2008, the effective up front fee will be 2.5% of the loan. For example, the proceeds of a $10,000 loan will be reduced by $250. If the borrower fails to make 12 consecutive on-time payments, they will be billed an additional 1.5% fee.

Steps to apply for a Federal PLUS Loan

1. File the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov (recommended for Parent PLUS) and submit all documents requested by the Division of Financial Aid (DFA); check for required  documents via the online Financial Aid Self Service system through www.ssinfo.purdue.edu.
2. DFA will send the student an Award Notice that the student can use to determine loan period, the type of eligibility, and the amount of eligibility; the grad student or parent borrower needs to use this information to determine how much they want to borrow.
3. Parent PLUS borrowers must submit a paper Purdue Parent PLUS Loan Request Form where they will indicate a requested loan amount and certify borrower eligibility; the 2008-09 form is available at www.purdue.edu/dfa/all/0809/parentplus.pdf.
4. DFA will certify borrower eligibility with the loan service provider. The loan service provider approves the loan after the borrower completes a PLUS Master Promissory Note (MPN) at www.dlenote.ed.gov (if not already on file).
   
5. PLUS Loan funds are normally sent electronically to the Purdue Bursar by the loan service provider. The borrower will be notified by the Bursar’s Office that funds have arrived. Funds are applied first to fees, then to any housing costs (if the Bursar bills for housing). Any remaining PLUS funds are sent to the borrower. Please note that it is important that students keep their address up-to-date via SSINFO and read all email from facontact@purdue.edu.

Repayment Information
Loan repayment will be deferred in the PLUS program beginning July 1, 2008 if the student remains enrolled at least half time (but interest accrues). If you would like more information regarding repayment, visit our general student loan counseling page.

Amount Borrowed	Payment
$5,000	$60
$10,000	$121
$20,000	$242
$30,000	$462

Sample Estimated Monthly Repayment Chart: Assumes interest rate of 7.9% and all payments made as scheduled on 10-year repayment term (excludes any borrower benefit savings). Borrowers can estimate monthly payments at www.finaid.org/calculators/loanpayments.phtml.