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Federal Direct Parent PLUS Loans


Who is Eligible for a Parent PLUS Loan?
Parent borrowers must be the dependent student's biological or adoptive parent or the student's stepparent, if the biological or adoptive parent has remarried at the time of the Free Application for Federal Student Aid (FAFSA) is completed.

For financial aid purposes, a student is considered dependent if he or she is under 24, unmarried, and has no legal dependents at the time the FAFSA is submitted (exceptions are made for veterans, orphans, and other special circumstances). Dependent students must provide parent income information on their FAFSA.

Parent PLUS loan borrowers 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 cannot have an adverse credit history (a credit check will be completed).

You can find more information about these requirements in Funding Education Beyond High School: The Guide to Federal Student Aid available at: www.studentloans.gov
What Do I Need to Complete the Application?
The student must have a completed a FAFSA prior to the parent submitting a PLUS Loan Request. Before submitting a Parent PLUS Application, the student and parent should calculate their estimated costs and resources to determine how much to borrow.

There is a 4.288% fee for Parent PLUS Loans. It is important to consider this when determining your borrowing amount. For example, a $6,000 PLUS loan will yield a net disbursement total of $5,743.

Parent borrowers will also need the following information in order to complete an application:

  • Their own Federal PIN (not the student’s)
  • The student’s name (as listed on the FAFSA)
  • The student’s Social Security Number
Where Do I Complete the Application?
Parent borrowers can complete the online application at www.studentloans.gov. Parent borrowers should sign in or create a profile using their own Social Security Number and Federal PIN (not the student’s).  Parent borrowers can click on ‘Request PLUS Loan’ to complete an application. A credit check is completed as part of the application process.

Tips for Completing the Application:
  • If the parent borrower does not have a PIN or needs a duplicate one sent, one can be obtained or requested by visiting the Federal PIN website at www.pin.ed.gov.
  • Complete an application for the current award year the student will be enrolled at Columbia College Chicago.
  • Select ‘Illinois’ from the drop-down menu and select ‘Columbia College Chicago’ from the list of schools
  • SFS encourages all borrowers to keep loan debt to a minimum. Borrowers should specify a loan amount based on the minimum amount needed after calculating the student’s estimated costs and resources.
  • Borrowers may also select ‘Maximum Direct PLUS Loan Amount’ when completing the application. If this option is chosen and the parent is approved, SFS will determine the student’s maximum eligibility at the time we process the application based on the student’s Cost of Attendance minus other financial aid already awarded.
If I’m Approved, What Are My Next Steps?
Parent borrowers who are approved are required to complete the Online Master Promissory Note (MPN) available at www.studentloans.gov using their Federal PIN. Parents borrowing a Direct PLIUS Loan for more than one student will be required to complete a separate MPN for each student.

The MPN is a legal document in which the parent borrower promises to repay the loan(s) and any accrued interest and fees to the Department of Education. The MPN also explains the terms and conditions of the loan(s). Parent borrowers will receive a disclosure statement that gives specific information about the loan scheduled to disburse under the MPN, including the loan amount, loan fees, and the expected loan disbursement dates and amounts.

If I’m Denied, What Are My Next Steps?
If a parent borrower is denied due to adverse credit history and does not wish to obtain an endorser or appeal the credit decision, the student will be evaluated for their eligibility to receive additional Direct Unsubsidized Stafford Loans. 

Parent borrowers who are denied and indicate they will seek an endorser or appeal a credit decision will be given 14 days to complete the process.
What is the Endorser Option?
If a PLUS borrower is found to have adverse credit, they may still borrow a PLUS loan by securing an endorser (cosigner) who does not have adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if the borrower cannot meet the repayment terms of the loan. The endorser may not be the student on whose behalf a parent borrower applied for a PLUS Loan.

SFS strongly recommends parent borrowers interested in securing an endorser to complete the electronic endorser process on www.studentloans.gov. Endorsers can complete the online process as long as they know the PLUS Application ID (obtained from the borrower) and have a Federal PIN. Endorsers can apply for a PIN at www.pin.ed.gov

If SFS is not notified of an approved endorser or appealed credit decision within 14 days, the student will be evaluated for their eligibility to receive additional Direct Unsubsidized Stafford Loans.

Parent borrowers may also print the paper endorser addendum on studentloans.gov and have the endorser complete and submit to the COD processing center. This process may take up to 4 weeks; therefore, SFS encourages borrowers to complete the electronic endorser process. If the paper endorser addendum is completed, the borrower will need to contact SFS and provide the following information:
  • Endorser Name
  • Endorser Social Security Number
  • Endorser Date of Birth
  • Amount the Endorser Approved

Once this information has been provided, please allow an additional 14 business days for SFS to process the PLUS Loan.

If the student has previously been awarded Additional Direct Unsubsidized loan funds, the student must complete a Student Loan Adjustment Request to cancel the additional unsubsidized prior to SFS processing the endorser approved loan.

All other questions regarding the endorser process should be directed to the Direct Loan Applicant Services Center at 1-800-557-7394.
What is a Credit Decision Appeal?
If a PLUS borrower is found to have adverse credit history and believes this decision to be in error, they may request to appeal the decision. Borrowers interested in credit decision appeals should contact the Direct Loan Applicant Services Center at 1-800-557-7394.
If the student has previously been awarded Additional Direct Unsubsidized, the student must complete a Student Loan Adjustment Request to cancel the additional unsubsidized prior to SFS processing the endorser approved loan.
How Do I Receive PLUS Loan Funds?
PLUS Loan funds are credited directly to the student’s account. The parent borrower will be notified via email within 3 days of the disbursement to the student’s account. In order to have your Federal PLUS Loan funds disbursed by the student’s first day of classes, the MPN must be completed by:
June 1—Fall Semester
November 1—Spring Semester
What are the Terms and Conditions of a PLUS Loan?
The specific terms and conditions of the PLUS Loan are outlined in the MPN. The fixed interest rate is 6.41% with a 4.288% origination fee, which is subject to change after July, 1, 2014.  Loan repayment begins 60 days after the final disbursement is made.

Parent borrowers may request payment to be deferred while their student is enrolled at least half-time. Deferment requests must be made through the Loan Servicer  and must be renewed each year.
How Do I Cancel My PLUS Loan?
All loan cancellation requests can be completed using the Parent Loan Adjustment Request. Parent borrowers can request a cancellation or reduction to a PLUS loan at any time prior to disbursement. Once a disbursement has been made, parent borrowers have 30 days from the date of their disbursement notification to cancel the loan disbursement by completing a Loan Adjustment Form.
   
If a request is received after 30 days to cancel the loan, SFS will notify the student that we are unable to process the request. After the 30 day deadline, parent borrowers can ‘cancel’ all or a portion of their loan by repaying the amount in full to their Direct Loan Servicer. 
How Do I Reduce My Loan?
SFS recommends parent borrowers request a reduction to their PLUS Loan by submitting the Parent Loan Adjustment Request. Borrowers should indicate on the form the gross amount of funds they wish to borrow each semester.

Parent borrowers can request a reduction to a PLUS loan at any time prior to disbursement. Once a disbursement has been made, parent borrowers may request a reduction to the loan at any time prior to the end of the student’s enrollment period.

Parent PLUS loans are subject to a 4.288% origination fee. If a parent reduces his/her PLUS disbursements to $5,000 each semester, the net funds that will post to the student’s account each semester will be $4,786.  
How Do I Increase My Loan?
Parent borrowers can complete a new PLUS Request at www.studentloans.gov to request the additional amount of funds s/he would like to borrow. For example, if a parent borrower initially secured $10,000 and wants to borrow a total of $15,000 they would complete a new PLUS Request for $5,000.

NOTE: Borrowers should only modify PLUS loan applications that are less than 90 days old and modifications should be limited to loan funds (i.e. do not modify loan periods, refund options, etc)
Where Will My Refund be Sent?
SFS encourages all students and/or borrowers to sign up for Direct Deposit (D2U ) to expedite the refund process. Refunds generated as a result of the Parent PLUS Loan will be issued based on the refund preference indicated on the PLUS Request.

If the parent borrower wants to change to whom the refund will be issued (parent/student) after an application has been processed, they can complete a Refund Release Form  and change the refund recipient.