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Plus Loans
Plus Loans
for Undergraduate Students - Parents helping their Children help
themselves with up to 100% of their college costs!
It's undeniable that
securing a Federally guaranteed PLUS loans are a smart financial
strategy
for parents of undergraduate students to help meet their kids
college costs at low, fixed interest rates and excellent
repayment terms. |
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A PLUS
Loan is a student loan offered to parents of students attending
or participating post-secondary institutions and enrolled in
school at least half time in a calendar year.
As of July 1, 2006 PLUS Loans are also available to graduate and
professional students at participating and eligible
postsecondary institutions. |
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Federal PLUS Loans allow qualifying parents of eligible
undergraduates to borrow up to the total cost of attendance each
year their student is in college or a participating
postsecondary institution.
Parents applying for a PLUS loan are, not required to have the
student file a FAFSA. However, its good practice to do so in
order to avoid missing further federal student aid. |
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PLUS loans are extremely flexible in terms of repayment offering
different repayment options that could help lower your monthly
payments in addition to loan consolidation, which gives you more
time to repay.
Once you complete a PLUS loan Master Promissory Note (MPN), your
approved PLUS Loan application is good for up to 10 years. As
long as meet credit approval terms and your child stays enrolled
at the same eligible postsecondary institution. Each year you
will be required to confirm how much money you want to borrow.
PLUS loans have similar characteristics in relation to Perkins
and Stafford loans as well as different attributes:
The Similarities
of the Stafford and Perkins loans are:
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Both offered
under Title IV of the Higher Education Act of 1965 (and
amendments thereto), and are backed by the Government of the
United States.
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Both are
available through the Federal Direct Student Loan Program,
also known as FDSLP
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Direct or
alternately, from a private lender through the Federal
Family Education Loan Program or FFELP.
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and both the
Stafford and Perkins loans can be consolidated through the
College Consolidation Loan program
Differences between
Stafford and Perkins loans are:
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Eligibility is
based on the parents or graduate students in question not
having an adverse credit history
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become due for
repayment immediately (Ended in July 1, 2008), and there is
only interest rate term
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When borrowed by
the parent, it becomes a commitment by the parent, rather
than the students commitment
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Are subject to
higher interest rates, for example; 7.9% in the case of the
Direct Loan and 8.5% in the case of the FFELP
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Can be incurred
in amounts that cover up the entire cost of education
(including living expenses), less other financial aids
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Offer different
repayment plans, although there isn't any interest rate or
accrual deferment
Major Changes as of
July 1, 2008
For PLUS loans that
are disbursed to parents 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 meet the enrollment criterion (enrolled in
school at least half time)
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Major
Benefits of the Plus Loan
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Fixed,
low interest rate Plus Loan amounts will cover 100%
of the cost of your child’s college education
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Available throughout the school year—even if you’ve
already paid tuition!
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Plus
Loans are eligible for federal loan consolidation
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Interest
accrued may be tax-deductible! (consult your
accountant)
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Simple
and free Federal PLUS Loan application process
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