What Kinds of Direct Loans are Available?
- Direct Subsidized and Unsubsidized Loans - Direct Subsidized Loans are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period and during deferment periods. Direct Unsubsidized Loans are not based on financial need; interest is charged during all periods.
- Direct PLUS Loans - Direct PLUS Loans are for the parents of dependent students and for graduate or professional-degree students. Interest is charged during all periods.
- Direct Consolidation Loans - Students or parents can combine different eligible federal student loans into one Direct Consolidation Loan.
What are the Eligibility Requirements for a Parent to get a Federal Direct Plus Loan?
- You must be the biological or adoptive parent (or, in some cases, the stepparent) of the student for whom you are borrowing.
- Your child must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, your child is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional-degree student, or a ward of the court.
- You cannot have an adverse credit history (a credit check will be done).
- In additions, you and your child must 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 for the Federal Student Aid programs.
How Do I Apply?
- Students must complete the 2015-2016 Free Application for Federal Student Aid (FAFSA). FAFSA on the Web can be completed online at www.FAFSA.gov. CSUDH school code: 001141
- Once the school has received the FAFSA, additional documents may be required. If so, submit the necessary information to the Financial Aid Office
- Federal Direct Loans are offered to the student and the Financial Aid Office recommends acceptance of these loans prior to applying for the Federal Direct Parent PLUS
- Complete and submit the Federal Parent PLUS Loan Request Form, along with the supplemental documents. This form can be found on our Forms web page.
- The Parent must complete the Master Promissory Note online at StudentLoans.gov.
Is There a Charge for the Loan?
Yes. In addition to interest, you pay a loan origination fee of 4.272% of the principal amount of each Direct PLUS Loan that you receive. This fee helps reduce the cost of making these low-interest loans. The fee is deducted before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to pay.
What is the Interest Rate?
The interest rate for 2015-2016 Direct PLUS Loans is a fixed rate of 6.84%. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan's first disbursement. To find out more information on interest rates for Direct PLUS Loans, contact the Direct Loan Servicing Center.
How Much Can I Borrow?
There are no set limits for Direct PLUS Loans, but you may not borrow more than the cost of education minus any other financial aid received, such as a Direct Subsidized or Unsubsidized Loan. Parent borrowers are eligible to borrow up to the students' cost of attendance minus other estimated financial assistance.
|Undergraduate Commuter budget:||$15,696|
|Financial Aid Received (Student Loan)||- 3,500|
|Parent PLUS Origination Fee (12,196 x 4.272%)||521|
|Maximum Parent PLUS Eligibility||$12,717|
How Will I Receive My Loan Money?
All Federal Direct Parent PLUS loans will be credited directly to your student's account. If the amount of this loan exceeds the amount due on the student's account, the Accounting Office will prepare a balance check. This check will be made payable to the parent. In either case, you must complete the form Federal Direct Parent PLUS Loan Program Authorization For Release Of Excess Parent Plus Loan Funds, which can be found on our Forms web page.
When Do I Have to Begin Repaying My Loan?
Your must begin repaying a Direct PLUS Loan 60 days after the full amount that you've borrowed for a school year has been disbursed. This means that in most cases, you must begin making payments while your child is still in school.
How Much Time Will I Have to Repay My Loan and How Much Will I Have to Repay Each Month?
Generally, you will have from 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Your monthly payment amount will be based on how much you borrowed and how long you take to repay. You may choose one of three repayment plans:
- Standard Repayment Plan - fixed monthly payments for up to 10 years
- Extended Repayment Plan - fixed monthly payments over a period of time, not to exceed 25 years. Available to borrowers who had no outstanding balance on a Direct Loan as of Oct 7, 1998. If you received a Direct Loan on or after Oct 7, 1998, your Direct Loan outstanding balance must be more than $30,000.
- Graduated Repayment Plan - Payments start of lower at first, and then gradually increase, usually every 2 years.
You can find information about these plans by contacting the Direct Loan Servicing Center at (800) 848-0979 or visit Direct Loan Servicing Online.
Can I Ever Postpone Making Loan Payments?
Yes, under some conditions you may receive a deferment or forbearance that allows you to temporarily stop making payments. For further information, please contact the Direct Loan Servicing Center at (800) 848-0979 or visit Direct Loan Servicing Online.
Can My Loan Ever be Cancelled or Discharged?
You must repay your loan even if you child doesn't complete or can't find a job related to his or her program of study, or if you or your child are unhappy with the education you paid for with your loan. However, your loan may be cancelled if you have your loan discharged in bankruptcy, if you die or if the child for whom you borrowed dies or if you become totally and permanently disabled (additional conditions apply). For further information, please contact the Direct Loan Servicing Center or visiting Direct Loan Servicing Online.
Can I Transfer My Direct Plus Loan to My Child so that it Becomes My Child's Responsibility to Repay?
No. A Direct PLUS Loan is a loan made to a parent, not to a student. You are responsible for repaying a Direct PLUS Loan.