Federal Parent Loan for Undergraduate Students (PLUS)
The Federal Parent Loan For Undergraduate Students (PLUS) is a federally funded low interest loan obtained through a participating private lender.
Eligible Borrowers
Either parent may borrow funds for a dependent undergraduate student to meet all or part of the educational expenses. The borrower must be a U.S. citizen or eligible non-citizen and must have good credit. The student must be enrolled at least half time (6 semester hours).
PLUS Loan Processing
If your financial aid award includes a Parent Loan for Undergraduate Students or PLUS Loan, it is important that you follow the instructions below in order for your loan to be properly processed and certified. Failure to follow these guidelines will result in the delay of disbursement of your loan funds.
Federal Parent Loan for Undergraduate Student Processing Timeline
|
Month |
Actions Taken |
| April and May | Award Offers are made, including loan eligibility |
| June | Parent Borrower selects a lender. PLUS Loans are certified and sent to the participating lender. |
| July |
Parent Borrower completes the Promissory Note |
| August |
Funds are requested from participating lenders for students who are enrolled at least half-time. |
Choosing a Lender for the Parent PLUS Loans
Reasons for selecting a particular lender vary from family to family. Some choose a lender based upon name recognition, immediate benefits or the long term advantage of savings during repayment or prefer to borrow from a lender with which they already have a banking relationship. Georgia Tech participates in the Federal Family Educational Loan Programs (Stafford Subsidized and Unsubsidized Student Loans; the Parent PLUS Program and the Grad PLUS program) so that you can have a choice of lender.
We strongly encourage you to ask questions and carefully consider the following as you make your selection:
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Will my loan be “sold”? Will the lender I chose service my loan throughout the repayment process?
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Does my lender have a proven track record of providing efficient and timely service? Will my loan funds be sent electronically to Georgia Tech?
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What, if any, fees will be charged for processing my loan?
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Does my lender offer any interest rate reductions as a reward for making my payments on time?
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Are the lender’s web site/services easy to use?
The Office of Scholarships and Financial Aid will process your loan with any participating lender you choose. The Institute does not receive any financial incentives nor do any of our personnel receive financial benefits and/or inducements from any lender. We do have a responsibility to make the PLUS loan process as efficient as possible and to strive diligently to give our families the best advice. We do make the following recommendations:
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If you have borrowed a PLUS loan previously, and you are satisfied with that lender’s service, then we encourage you to stay with the same lender. Multiple loans from multiple lenders could require you to make multiple repayments at the same time.
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Parents of entering freshmen, and incoming transfer and/or any parent that has not borrowed a PLUS Loan previously through Georgia Tech, must notify us of your lender preference before we can finalize your student loan. Your request should be made via the PLUS Loan Request Form.
Requesting a PLUS Loan
Parents wishing to borrow from the PLUS Loan program should make sure that their student complete a Free Application for Federal Student Aid (FAFSA) and a Georgia Tech Application for Scholarships and Financial Aid. When completing the Georgia Tech Application for Scholarships and Financial Aid, check the boxes indicating your desire to borrow from the PLUS Loan program. Once both applications are complete, the OSFA will determine eligibility and award the PLUS Loan as requested. Once you are informed that a PLUS Loan has been awarded you must then fill out the PLUS Loan Request Form.
Completing the PLUS Loan Request Form
The PLUS Loan Request Form is only available online through our web site at our Forms page. The PLUS Loan Request Form supplies us with information necessary to certify a parent's PLUS Loan application and authorizes Georgia Tech to receive PLUS funds electronically. On the PLUS Loan Request Form, the parent selects a lender and indicates a requested amount on the PLUS Loan.
Certifying your PLUS Loan
After you have completed the PLUS Loan Request Form, our office creates, certifies, and electronically transmits the loan application to your lender. The student's financial aid file must be complete before we send your loan application to the lender, and if the student's file was selected for Verification, you must complete our requirements before your loan is certified. The certification process for the PLUS Loans begins in early July.
After the lender receives the electronic loan application from our office, a Master Promissory Note will be generated and mailed to the parent borrower. The borrower should verify the information, complete any blank items, sign (ink) and date the promissory note. Keep the borrower copy for your records and carefully follow the instructions for submitting the completed note to the appropriate address.
Important: the only promissory note that is valid will be the one initiated with this process. Do not download an application/note from the Internet. Do not submit a note that was mailed to you from other lenders by direct mail.
Loan Limits
Parents may borrow an amount equal to the cost of attendance minus other financial aid for which the student is eligible. There is no aggregate limit on the total amount that may be borrowed.
Interest Rate
Effective July 1, 2006, the interest rate of PLUS loans will be fixed at 8.50%
Fees
Borrowers may be charged an origination fee of 3% and a default fee of up to 1%.
Disbursement
With a number of large lenders, funds will be received via Electronic Funds Transfer (EFT) and automatically posted to the student's account (assuming the student is enrolled at least half time and is otherwise eligible). A loan finalized in a timely manner will be disbursed prior to fee payment deadline so that the funds may be used to pay monies owed the Institution first, with any remaining funds issued as a check which is mailed to the parent's home address.
Repayment Terms
Repayment begins within 60 days after the final disbursement for each specific loan received. There is no grace period. This means that interest begins to accumulate at the time the first disbursement is made. Payments are made while the student is in school. Exceptions to this (deferment or forbearance) are available. For example, a parent attending college at least half time may defer payments and all parents may choose an interest only repayment option for up to 24-48 months. Please keep in mind that choosing one of these options will increase the overall cost of the loan. The parent borrower must contact the lender for details. Non-payment will result in collection costs, legal fees and late fees.
The lender will arrange a repayment schedule, providing for a minimum of $600 to be paid annually, and a maximum repayment period of ten (10) years. The promissory note contains detailed terms and conditions of your loan.
Sample PLUS Monthly Repayments
(At maximum interest rate of 8.5% and for 10-year repayment term)
|
Amount
Borrowed
|
*Monthly
Payment
|
|
$10,000
|
$126.68
|
|
$15,000
|
$190.05
|
|
$20,000
|
$253.40
|
|
$30,000
|
$380.10
|
*estimated monthly payment
This website last updated on 06/13/08