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Federal PLUS Loans

Receiving a college education may be the single most important accomplishment that one may achieve in their entire life time.

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Federal PLUS Loans (Parent Loan for Undergraduate Students) are available to parents that are providing financial assistance for their children’s education. In order to qualify for a Federal PLUS Loan, the student must be a dependent and be enrolled in an eligible program more than half of the time. As with most Federal Student Loans, there are two programs which support Federal PLUS Loans; The Federal Family Education Loan (FFEL) Program and the Federal Direct Loan (Direct Loan) Program.

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Listed below, are two of the key benefits for parents to review regarding Federal PLUS Loans:

No Loan Limit – There are no annual / lifetime loan limits for PLUS loans; the amount which may be borrowed is the total cost of attendance, less the costs of any current financial aid.
Competitive Interest Rates – Federal PLUS Loans interest rates are currently fixed at 8.5% for the Federal Family Education Loan Program (FFELP), and 7.9% for the Direct Loan Program (Direct).

An important fact regarding traditional Federal PLUS Loans, is that the loan is made to the parents and is not financially associated with the student. The eligibility requirements on Federal PLUS Loans are not based on need or income. However, in order for the parents of a student to obtain Federal PLUS Loans, they must pass a credit check. If the parents are not able to receive the loan due to an unacceptable credit rating, they may still be able to obtain the loan, if they are able to secure an endorsement (cosigner) from someone that has acceptable credit.

Since July 1, 2006, Grad PLUS Loans are available to graduate or professional students. Grad PLUS Loans are similar to standard Federal PLUS Loans, except that the borrower is the student and not the parent.

Another matter which merits mention is that there is a 4% fee associated with traditional and Grad PLUS Loans. The fee is assessed each time there is a disbursement made on the funds. The fee is distributed based on the type of loan program which the Federal PLUS originated. The fee for FFEL PLUS Loans is distributed between the Federal Government and the guaranty agency in your state which provided the loan; The fee for Direct PLUS Loans, goes entirely to the Federal Government.

Do you want to apply for Federal PLUS loans?
Apply for Federal PLUS loans today.