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Federal PLUS (Parent) Loan

A Federal Parent PLUS is a loan funded by the federal government and is available only to biological or adoptive parents of undergraduate FAFSA applicants who are classified as 'dependent' and who are enrolled at least half-time.

Interest Rate and Fees

The current interest rate of 6.41% is charged on a PLUS Loan from the date of the first disbursement of the loan proceeds for a specific loan period until the loan is paid in full.  The Department of Education also imposes a 4.288% loan origination fee at the time of each loan disbursement.  

Interest rate cap for military members:  If a parent qualifies under the Service Members Civil Relief Act, the interest rate on loans obtained before entering military service may be capped at 6% during the parent's military service. Parents must contact their loan servicer to request this benefit.

How Much to Borrow

The University of Central Missouri’s Office of Student Financial Services always recommends borrowing only what you need as loans accrue interest. When determining the amount that you may need to borrow, students and their families should:

1. Determine what your actual tuition, room, board and book costs will be for the academic year. 
2. Create a budget for all of the other expenses that may be incurred while attending school (supplies, computer, transportation, toiletries, fun money, etc). 

Once you have determined what your actual costs will be, then you should review what funding you have available to help you cover your costs like grants, scholarships, and student loans, etc. If a student’s eligible financial aid does not cover all of their budgeted expenses, then have a discussion regarding what amount can be afforded to pay out-of-pocket for the year.  If the student’s eligible financial aid and the families out-of-pocket funds are not enough to cover the budgeted expenses, that difference may be the amount that you borrow for the PLUS loan up to our Cost of Attendance. 

See the below example of a student’s budget using UCM’s 2013-2014 Cost of Attendance for a resident Undergraduate student 

Estimated Budget
$7,140
Tuition
$800
Books and Supplies
$7,772
Room and Board
$2,300
Miscellaneous Expenses
$100 Loan Fees
$18,112
Budgeted Expenses (COA)
Student's Eligible Financial Aid
-$5,550
Grants
-$2,000
Scholarships
-5,500
Stafford (student) Loan
$5,062
Difference between expenses financial aid
-$2,000
Personal payment
$3,062
PLUS Loan amount for which you may apply

Repayment Options

Repayment (principal and interest) begins 60 days after the final disbursement of the loan funds for the loan period. Parents may elect on the PLUS application to defer payments while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and for an additional six months after the student ceases to be enrolled at least half-time. Please keep in mind that interest will continue to accrue even if loan payments are deferred.

Please click here for Budget and Repayment Calculators!

For more information on PLUS loan repayment options, please visit the Federal Student Aid website.

Eligibility

To be considered, a student must first complete and submit the FAFSA. A parent borrower normally qualifies for PLUS Loan funds as:

  • The student and parent are US citizens or eligible non-citizens.
  • The student and parent are not in default on any federal education loans or owe an overpayment on a federal education grant.
  • The parent is not currently in bankruptcy status; and
  • does not have an adverse credit history.     
    • Direct PLUS Loan applicants are considered to have an adverse credit history if he or she
      • Is 90 or more days delinquent on any debt as of the date of the credit report; or
      • Has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt under Title IV of the HEA during the five years preceding the date of the credit report.

Application Process

Parents may complete the PLUS application at www.studentloans.gov. Parents will need their 4-digit FAFSA PIN in order to log on to the website.

If approved:

  • The parent may borrow funds to assist their son/daughter in paying his/her educational expenses.
  • The parent will need to complete the PLUS Master Promissory Note (MPN) at www.studentloans.gov.
    • The MPN is a legal document in which the borrower promises to repay the loan and any accrued interest and fees. It also explains the terms and conditions of the loan. In most cases, one MPN can be used for loans that a parent receives over multiple academic years although a separate PLUS Application must be filed for each school year.

If denied:

  • The student may be eligible to receive additional Federal Unsubsidized Stafford loan assistance in his/her name for the same amount as an undergraduate independent student up to Cost of Attendance.
    • If the parent does not plan to apply with an endorser, on the PLUS application, they should select the option. “Will not pursue the PLUS application.”
  • A parent may re-apply with a credit worthy endorser/co-signer.
    • The parent should select the “Pursue endorser,” or “Undecided” option on the PLUS application.  If either of these two options are selected, UCM will not award the student additional Federal Unsubsidized Stafford loans until otherwise notified by the student or parent. 
  • Instead of securing an endorser, an applicant may appeal a determination of adverse credit history to the Department of Education by documenting extenuating circumstances. The Department of Education has the final decision on whether to approve the loan.

If one parent applies for a PLUS loan and is denied based on adverse credit and the other parent applies independently and is approved, the dependent student is not eligible for the increased Federal Unsubsidized Stafford loan amounts.  

PLUS Override Requests

If a PLUS Loan Application is approved and the parent feels that there are exceptional circumstances that prevent them from borrowing a PLUS loan, a parent may apply for a PLUS Override RequestAll parents are required to apply for the PLUS loan before a PLUS Override Request will be reviewed; except families who have filed for bankruptcy and who can provide documentation detailing that as a condition of the bankruptcy they are not allowed to apply or co-sign any loans or families whose incomes are limited to public assistance (social security, disability, etc.) 

The following are examples of the exceptional circumstances that might be used to document a dependent student’s eligibility for additional Federal Unsubsidized Stafford Loans:

  • The parent is incarcerated.
  • The parent has filed for bankruptcy and has provided a letter from the bankruptcy court stating that as a condition of the bankruptcy filing, the parent may not incur any additional debt.
  • The parent’s income is limited to public assistance or disability benefits and it is documented that the parent would not be able to repay the PLUS loan.
  • The parent of a dependent student is not a U.S. citizen or permanent resident, or is not able to provide evidence from the U.S. Citizenship and Immigration Services that he or she is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident.    

A PLUS Override approval or a PLUS loan applications denial does not carry over to subsequent academic years.  Parents will need to apply for the PLUS loan each academic year and provide current documentation if applying for a PLUS Override Request.

Circumstances that do not warrant a PLUS Override Request:

  • The parent’s unwillingness to apply or borrow a PLUS loan.
  • An aid administrator’s belief that a parent should not borrow a PLUS loan.