PLUS Loan for Undergraduate Students
Parents may be eligible for federal PLUS Loans for Undergraduate Students through the William D. Ford Federal Direct Loan Program. Because Direct Loans come straight from the Department of Education, the borrower does not need an outside lender. The College of Charleston requires that the student complete the FAFSA before the awarding of a PLUS loan. All PLUS loans are unsubsidized loans, which accrue interest from when the loan is disbursed. For PLUS loans, repayment begins within sixty (60) days after the second disbursement.
Parents of independent students are not eligible to borrow a PLUS loan.
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Borrowing a Direct PLUS Loan
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To begin the process of getting a Direct PLUS Loan, the student must complete the FAFSA. After the student submits the FAFSA and completes any additional federal requirements, the Office of Financial Aid will automatically award the student the maximum amount of PLUS loan eligible. This award can be seen on CougarTrail. The parent that wishes to borrow the PLUS loan needs to complete a PLUS Loan Application (PLAP) form. The PLAP form can be downloaded using the "Download Forms" in the left margin, or by contacting the Office of Financial Aid. Return the PLAP form to the Office of Financial Aid by mail, fax or in person.
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Credit Check
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After receiving the PLAP form, the Office of Financial Aid will electronically transmit the information to Direct Loan Origination and Applicant Services. LOAS will process the loan and run a credit check on the parent borrower. If the applicant is ninety days delinquent on any account, has declared bankruptcy, or has had a financial judgment, the PLUS loan will be denied. The LOAS will notify the applicant and identify the name & phone number of the agency that reported the adverse credit status. If the credit data is inaccurate, the loan denial decision may be appealed by contacting LOAS. Please note that the Office of Financial Aid is not provided any information about the reason for the denial. All loan denial appeals are handled by LOAS. LOAS may be contacted at (800) 557-7394.
If the decision was based on accurate information, the applicant may exercise the option to obtain an endorser (similar to a co-signer) on the loan. The LOAS will include an endorser promissory note with the denial letter. The endorser can be the other parent or anyone who meets the above credit criteria and is willing to endorse the PLUS loan. The student may not endorse the parent's loan. The endorser note should be returned to LOAS.
When LOAS notifies our office of the loan denial, we will set the PLUS Loan Origination Rejection Form (PLORF) as a requirement on your financial aid account. An email will be sent to the student's College of Charleston Edisto email account with instructions to check the Student Requirements in the Financial Aid section of CougarTrail. The purpose of the PLORF is to provide options and for the borrower to officially communicate to the Office of Financial Aid exactly what (s)he plans to do about the PLUS denial. We will not cancel the application until we receive the PLORF form.
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Master Promissory Note On-Line
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Parents that have not borrowed from Direct Loans before must complete a Federal Direct Loan Master Promissory Note (MPN) before loan money can be disbursed. The Federal Direct Loan Master Promissory Note (MPN) can be completed at dlenote.ed.gov. Parents that have previously borrowed from Direct Loans without an endorser do not need to complete these requirements again for the same student.
The Electronic MPN site allows you to complete and sign the parent MPN over the web using a Department of Education PIN. After the parent borrower completes the MPN the results will be sent electronically to the College of Charleston and the student's account should be updated in Cougar Trail within 5 business days. If it has been longer than 5 business days, the parent borrower may wish to print a copy of the MPN confirmation number page for personal records and submit a copy to our office.
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Interest and Fees
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PLUS Loan interest rates for 2009-2010:
• 7.9% Undergraduate PLUS Direct Loans
• 7.9% Parent PLUS Direct Loans
Fees:
• 4.0% Origination Fee
• 1.5% Rebate
• 2.5% Assessed Fee
Common Interest Questions
When does interest accrue on my loan?
It depends on the type of loan and the status of the loan.
- On Direct Unsubsidized student loans, PLUS loans, and the unsubsidized portion of a Consolidation loan, interest accrues in all statuses beginning from the day it was disbursed until the date it is paid in full.
- Direct Subsidized loans accrue interest during a forbearance and while in repayment. A Direct Subsidized Loan does not accrue interest while in school, during the grace period or in a deferment period.
- Interest accrues on a daily basis. Factors such as the number of days between your last payment, the interest rate, and the amount of your loan balance determine the amount of interest that accrues each month. You can calculate how much will accrue on your loan by using the Simple Daily Interest Formula.
Is there a maximum amount the interest rate can be raised to?
Yes. All variable interest rate Direct Loans have a maximum interest rate. You can see the maximum rate for each loan type by reviewing the current interest rates found on Direct Loan's interest rate information table.
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Repayment
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For PLUS loans made to parents that are first disbursed on or after July 1, 2008, the borrower has the option of beginning repayment on the PLUS loan either 60 days after the loan is fully disbursed or waiting until six months after the dependent student on whose behalf the parent borrowed ceases to be enrolled on at least a half-time basis.
With the 60 day repayment option, if you apply for the loan for the full academic year, half of the loan will be disbursed in the Fall and half of the loan will be disbursed in the Spring. You will begin repayment 60 days after the Spring disbursement. For repayment amounts, visit the online repayment calculator.
The Direct Loan Servicer handles all repayment, deferment and forbearance of Direct Loans (including PLUS loans). Visit them online at www.dl.ed.gov or call them at (800) 848-0979, TTY (800) 848-0983.
For College of Charleston undergraduate students graduating between June 2007 and May 2008, the average parent loan indebtedness is approximately $29,200. The average anticipated monthly loan payment is $352.52 (based on a standard plan at 7.9% interest for 120 months).
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In-School Deferment
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Direct Loan Servicing Center may automatically grant an in-school deferment on your Direct PLUS Loan based on information reported by your school to the U.S. Department of Education showing that you are enrolled at least half time. The Direct Loan Servicing Center will notify you of the deferment and of your option to cancel the deferment and begin making payments on your loan. Make sure you contact the Direct Loan Servicing Center to verify an in-school deferment was granted via www.dl.ed.gov or (800) 848-0979.
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Additional Information
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A Guide to Federal Education Loans for Parents
Website hosted by Direct Loans to provide additional information about PLUS loans.
Ombudsman for Federal Student Aid
Assists borrowers having problems with federal loans. (877) 557-2575
TTY Users - use the same number for Relay Call Services
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This page updated: March 31, 2009. Email the Webmaster
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