Federal Direct Parent(PLUS) Loans

There are no set limits for Direct PLUS Loans. The parent may not borrow more than the cost of the student’s education less any other financial aid received. The parent requests an amount on the GRCC Direct PLUS Loan for Parents Worksheet and the Financial Aid Office will determine the actual amount that may be borrowed.

The Department of Education makes the PLUS loan credit decision after a review of the parent’s credit report.

The PLUS Loan borrower must be the biological or adoptive parent, (or, in some cases, the stepparent) of the dependent student for whom the loan is being borrowed.

The parent cannot have an adverse credit history. A check of the parent’s credit report will be done.

The parent and the student must both be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements.

The student must be a dependent student who is enrolled at least half-time (6 credits) at a school that participates in the Direct Loan Program. Generally, the student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, or a ward of the court.

STEP 1: The following application materials must be completed.

• 2011-2012 Free Application for Federal Student Aid (FAFSA) to be completed by dependent student and parent.
• Green River 2011-2012 Direct PLUS Loan for Parents Worksheet to be completed by the parent.
• If the student wants a Federal Direct Loan, the student should complete the 2011-2012 Federal Direct Loan Worksheet and submit it to the Financial Aid Office before or with the PLUS Loan for Parents Worksheet.

STEP 2: Parent must complete the electronic Direct PLUS Master Promissory Note (MPN) online at: www.studentloans.gov.

Select: Complete New MPN for Parent PLUS Loans

The interest rate for Direct PLUS Loans is a fixed rate of 7.9%.

Interest is charged on Direct PLUS Loans beginning the date of your loan’s first disbursement. For more information on the interest rates for Direct PLUS Loans, contact the Direct Loan Servicing Center by phone at 1-800-848-0979.

In addition to the interest, there is a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that you receive. This fee is deducted from each of the gross disbursements prior to disbursing the net funds to the school.

Funds received by Green River would first be applied to the student’s account to pay off any remaining tuition and fees owed by the student. Then, a check for any remaining balance would be ordered payable to the student or to the parent, depending on the selection made by the parent on the Direct PLUS for Parents Worksheet.

If the student is receiving the remainder of the PLUS funds, the student needs to provide the cashiers picture identification and a signed Attendance Form when picking up the check. The Attendance Form must be signed within three days of the date the check is picked up.

Entrance counseling is not required for a student to receive Parent PLUS Loan funds.

A Direct PLUS Loan made to a parent CANNOT be transferred to a student. The parent borrower maintains responsibility for repaying a Direct PLUS Loan.

Repayment of a Direct PLUS Loan begins 60 days after the full amount you’ve borrowed for an academic year has been disbursed. This means you would generally begin repayment while the student is still in school. If the Direct PLUS Loans had a first disbursement date on or after July 1, 2008, you may request that repayment be delayed until six (6) months after the student graduates or is no longer enrolled at least half-time.

For more information about postponing payments, contact the Direct Loan Servicing Center or visit Direct Loans on the web at www.direct.ed.gov.

For more information about Parent PLUS Loans and estimating the monthly payment, how capitalizing interest affects repayment, and loan relief, visit the Direct Loan website at www.direct.ed.gov.