Federal PLUS Loans for Undergraduate Students
Plus loans are offered to parents to assist with their student’s costs when the student does not have enough other types of financial aid to meet the university’s cost of attendance.
PLUS loans are unsubsidized which means interest accrues while the student is in school. The PLUS loan begins repayment 60 days after the last disbursement of loan funds is made each year (the award is normally for two semesters, half the amount of the loan is disbursed in fall and the other half in spring). An origination fee is assessed by the federal government at the time of disbursement.
If a dependent student’s cost of attendance cannot be met with other awards, the parent is eligible to apply for a PLUS loan. Students must be enrolled at least half-time to be eligible for a PLUS loan.
To apply for a PLUS loan, the parent borrower must log into the Direct Loan website using their Social Security number, name, birthdate, and four digit Federal PIN number. This number was generated when the parent completed the FAFSA with the student or can be generated through the PIN Registration site.
The parent borrower will begin the process by indicating Request PLUS Loan or Start PLUS Application Process.
- Demographic information about the parent borrower, student, and student’s university is provided.
- Credit Check: The US Department of Education Direct Loan Program performs a credit check on the parent borrower.
- If credit is denied, the parent borrower has the option to appeal the decision or attain an endorser. If the parent borrower does not wish to appeal or secure an endorser for the loan, the student is eligible for an additional unsubsidized loan. The parent borrower and/or student must complete the PLUS Loan Credit Denial Form located on our Forms page to notify UNCW of the family’s intentions regarding the loan process. Additional unsubsidized loan limits for students whose parent loans have been denied are $4,000 for freshman and sophomores and $5,000 for juniors and seniors.
- If credit is approved, the parent borrower can continue to complete the PLUS Master Promissory Note
- If credit is denied, the parent borrower has the option to appeal the decision or attain an endorser. If the parent borrower does not wish to appeal or secure an endorser for the loan, the student is eligible for an additional unsubsidized loan. The parent borrower and/or student must complete the PLUS Loan Credit Denial Form located on our Forms page to notify UNCW of the family’s intentions regarding the loan process. Additional unsubsidized loan limits for students whose parent loans have been denied are $4,000 for freshman and sophomores and $5,000 for juniors and seniors.
- PLUS Master Promissory Note (MPN): The parent borrower must complete the PLUS MPN with the Direct Loan Program. This is a legally binding form that is an agreement between the borrower and the Department of Education. The PLUS MPN is valid for all PLUS loans borrowed through the Direct Loan Program for one student for a period of 10 years.
Monthly Payments
All loans have one common factor which distinguishes them from the other forms of aid; they must be repaid. To determine your monthly payments considering various circumstances, we suggest you use a Monthly Repayment Calculator. We encourage students and parents to make informed decisions about borrowing – having an estimate of what your payments will be should help in budgeting for loan payments.
Reporting to Credit Bureaus
Federal law requires lenders to report loan information and the subsequent monthly payment information to credit bureaus. There has been some concern about what a credit bureau can do with a borrower’s information. A borrower has the right to prohibit a credit bureau from using information in the borrower’s credit record in connection with any credit or insurance transaction not initiated by the borrower. The borrower may exercise this right by calling 888-567-8688, option 2.
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