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Federal PLUS Loans The Federal Parent PLUS Loan is a loan for parents to help their children pay for their education. All parents of dependent students are eligible to apply for the PLUS loan. In addition, the Federal Grad PLUS Loan allows graduate and professional students to pay for additional educational expenses, not covered by financial aid. You may borrow up to the full cost of education minus other financial aid received. You are not required to have financial need to apply for the PLUS loan and no collateral is required. However, you must be creditworthy. Borrower Benefits AHELA offers the following borrower benefits on PLUS Loans:
When applying for a Federal Parent PLUS Loan you must be the biological or adoptive parent of the dependent, undergraduate student who submitted the Free Application for Federal Student Aid (FAFSA). In addition, you must be a U.S. citizen or permanent resident and pass a credit check. Interest Rate The Federal PLUS loan has a fixed interest rate of 8.5% for all loans first disbursed on or after July 1st, 2006. AHELA’s interest rate deductions for on-time payments and automatic payments will reduce your interest rate to 7.00%. Fees Many lenders charge origination fees of up to 3.00% of the total loan amount. These fees go to the federal government to help make up the cost of student loan programs. In addition, guarantors may charge a fee of up to 1.00% of the total loan amount as an insurance against student loan default. Disbursements Once you have completed your application, your financial aid office will determine your scheduled disbursements for the academic year. AHELA will disburse your check to the school, who will apply the funds to your tuition bill. Any remaining funds will be disbursed to the student. Paper Applications If you are unable to complete your loan application electronically, you may download a paper application to complete and mail. |
