What is a Direct PLUS Loan?
PLUS loans are federal loans that parents of dependent undergraduate students can use to help pay education expenses.
Here’s a quick overview of Direct PLUS Loans:
The U.S. Department of Education is the lender.
The borrower must not have an adverse credit history.
The maximum loan amount is the student’s cost of attendance (determined by the school) minus any other financial aid received.
Am I eligible for a Direct PLUS Loan?
To receive a Direct PLUS Loan at BRCC, you must
be the parent (biological, adoptive, or in some cases, stepparent) of a dependent undergraduate student enrolled at least half-time (6 or more credit hours or 15 or more contact hours, depending on the program of study)
pass a credit check
your child must meet the following criteria:
be a U.S. Citizen or an eligible non-citizen
have graduated from high school or earned a high school equivalency diploma
be accepted into an eligible degree, diploma, or certificate program of study
be registered with Selective Service if you child is male and over the age of 18
must not have a student loan in default
must maintain satisfactory academic progress for financial aid standards
How do I apply for a Direct PLUS Loan?
In order to receive a Direct PLUS loan, your child must complete the Free Application for Federal Student Aid (FAFSA). Parents will need to complete a BRCC Direct PLUS Loan Request Form. Finally, the parent will be required to sign a Master Promissory Note (MPN), agreeing to the terms of the loan.
Can I still receive a Direct PLUS Loan if I have an adverse credit history?
A credit check will be performed during the application process. If you have an adverse credit history, you may still receive a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history or documenting to the U.S. Department of Education’s satisfaction extenuating circumstances relating to your adverse credit history. The endorser cannot be the child on whose behalf you are borrowing.
If a parent borrower is unable to secure a PLUS loan, the undergraduate dependent student may be eligible for additional unsubsidized loans to help pay for his or her education. The dependent student should contact the school’s financial aid office for more information.
How much can I borrow?
The maximum PLUS loan amount you can borrow is the cost of attendance (determined by the school) minus any other financial assistance received.
What is the current interest rate?
For Direct PLUS Loans disbursed after July 1, 2017 and before July 1, 2018, the interest rate is 7%.
Other than interest, is there a charge for this loan?
Yes, there is a 4.276% loan origination fee for loans disbursed on or after October 1, 2016, and before October 1, 2017. The fee will be proportionately deducted from each loan disbursement.
How do I pay back my loan?
When you receive your Direct PLUS Loan, you will be contacted by your loan servicer. Your loan servicer will provide regular updates on the status of your Direct PLUS Loan and will provide you with information on how and when to repay your loan.
When do I begin repaying my loan?
Your Direct PLUS Loan enters repayment once your loan is fully disbursed (paid out).
You may contact your loan servicer to request a deferment
while you or your child are enrolled at least half-time and
for an additional six months after your child ceases to be enrolled at least half-time.
If your loan is deferred, interest will accrue on the loan during the deferment. You may choose to pay the accrued interest or allow the interest to capitalize when the deferment period ends. Your loan servicer will notify you when your first payment is due.
What types of repayment plans are available?
There are several repayment plans that are designed to meet the different needs of individual borrowers.
What if I have trouble repaying the loan?
If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your servicer can help you understand your options for keeping your loan in good standing. For example, you may wish to change your repayment plan or request a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan.
As a parent borrower, can I transfer my loan to my child?
No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent, are responsible for repaying the loan.
Can my loan ever be canceled or forgiven?
Yes. Before your loan money is disbursed, you may cancel all or part of your loan by notifying your school. After your loan is disbursed, you may cancel all or part of your loan within certain time frames. Your promissory note and additional information you receive from your school will explain the procedures and time frames for canceling your loan.
You also may qualify for forgiveness of some or all of your loan if you meet certain conditions.
Additional information about the Direct PLUS Loan
For more information and additional details regarding the Direct PLUS Loan program, visit studentaid.ed.gov
Financial Aid for Curriculum Students
Financial Aid Assistant
Financial Aid Office
Henderson County Campus
180 West Campus Drive
Flat Rock, NC 28731
School Code: 009684
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