Federal Parent Plus Loans
The Federal Direct Parent Loan for Undergraduate Students (Direct PLUS Loan) Program enables a parent to borrow a Parent PLUS loan for his or her dependent child. The U.S. Department of Education is the lender.
How to Apply
To apply for a Direct PLUS Loan, print and complete a Direct PLUS Loan application and return it to the Bowie State University Financial Aid Office.
As the parent of a dependent student, you may borrow if you do not have an adverse credit history. The Office of Financial Aid will perform a credit check before approving the loan. Should the U.S. Department of Education deny your application, you (the parent) may obtain a co-signer/endorser for your loan, or your son or daughter may apply for an additional Federal Direct Unsubsidized Loan.
You do not have to show need to borrow a Direct PLUS Loan. Your Direct PLUS Loan offer equals the cost of attendance less any other financial aid offered to your son or daughter for the current academic year. You do not have to borrow the full amount of Direct PLUS Loan offered.
Cost of Borrowing
In addition to interest, you will pay 4% of the loan proceeds to the U.S. Department of Education as a loan origination fee. This fee will reduce the amount of loan money disbursed.
Parent loans with a first disbursement on or after July 1, 2006, have a fixed interest rate of 7.94%. Parents will be notified of interest rate changes throughout the life of their loan.
Borrowing from the PLUS Loan program requires the completion of an Electronic Master Promissory Note (e-MPN). You can use the e-MPN for one or more loans for one or more academic years while the student for whom you are borrowing is enrolled at Bowie State University.
In order to electronically sign the Master Promissory Note (e-MPN), you must obtain and Personal Identification Number (PIN). Click here to sign up for a PIN.
The repayment period for principal and interest begins the day after the loan has been fully disbursed. For example, a loan covering the fall and spring terms will enter repayment after the disbursement for the spring term. The first payment becomes due within 60 days after the final loan disbursement of loan proceeds for an academic year. You will have three repayment options:
- The Standard Repayment Plan requires even monthly payments of at least $50 over a fixed period of up to ten years. This plan usually results in the lowest total interest paid because the repayment period is shorter than under the other plans.
- The Extended Repayment Plan allows loan repayment over a period of 12 to 30 years, depending on the total amount borrowed. You still pay a fixed amount each month (at least $50), but the monthly payments will usually be less than under the Standard Repayment Plan. This may make the repayment more manageable; however, you will usually pay more interest because the repayment period is longer.
- The Graduated Repayment Plan allows payments to start out low and increase every two years. Your monthly payments must be at least half of what you would pay under Standard Repayment. As in the Extended Repayment Plan, the repayment period will vary from 12 to 30 years, depending on the total amount borrowed. Again, you may find it easier to manage the lower monthly payments; however, you will pay more interest because the repayment period will be longer.
NOTE: You can prepay all or a portion of your loan at any time without penalty.
Additional Information on Borrowing
You can estimate your monthly payments with various repayment plans with the repayment calculators available online from the U.S. Department of Education's Direct Loan Website at http://www.ed.gov/DirectLoan.
For more information on the cost of borrowing or repayment, call the Federal Student Aid Information Center at 1-800-4FEDAID (1-800-433-3243).
Postponements of Payments
If you are unable to make payments on your PLUS Loan for reasons such as unexpected personal problems or poor health, you will need to contact Direct Loans for additional information.
PLUS Loan Forgiveness or Cancellation
Forgiveness, cancellation and discharge of your loan means that you are no longer expected to repay your loan.
Consolidating your loans allows you to make only one monthly payment to cover your Federal Direct PLUS Loans and any federal student loans you may have for your own education.
If you have additional questions, please feel free to contact Direct Loan Servicing Center at 1-800-848-0979 or www.studentloans.gov in new window.