PLUS Loan for Undergraduate Students

Parents may be eligible for federal PLUS Loans for Undergraduate Students through the William D. Ford Federal Direct Loan Program. Because Direct Loans come straight from the Department of Education, the borrower does not need an outside lender. The College of Charleston requires that the student complete the FAFSA before the awarding of a PLUS loan. All PLUS loans are unsubsidized loans, which accrue interest from when the loan is disbursed. For PLUS loans, repayment begins within sixty (60) days after the second disbursement.

Parents of independent students are not eligible to borrow a PLUS loan.

	Borrowing a Direct PLUS Loan
	To begin the process of getting a Direct PLUS Loan, the student must complete the FAFSA. After the student submits the FAFSA and completes any additional federal requirements, the Office of Financial Aid will automatically award the student the maximum amount of PLUS loan eligible. This award can be seen on CougarTrail. The parent that wishes to borrow the PLUS loan needs to complete a PLUS Loan Application (PLAP) form. The PLAP form can be downloaded using the "Download Forms" in the left margin, or by contacting the Office of Financial Aid. Return the PLAP form to the Office of Financial Aid by mail, fax or in person.
	Credit Check
	After receiving the PLAP form, the Office of Financial Aid will electronically transmit the information to Direct Loan Origination and Applicant Services (LOAS). LOAS will process the loan and run a credit check on the parent borrower. If the applicant is ninety days delinquent on any account, has declared bankruptcy, or has had a financial judgment, the PLUS loan will be denied. The LOAS will notify the applicant and identify the name & phone number of the agency that reported the adverse credit status. If the credit data is inaccurate, the loan denial decision may be appealed by contacting LOAS. Please note that the Office of Financial Aid is not provided any information about the reason for the denial. All loan denial appeals are handled by LOAS. LOAS may be contacted at (800) 557-7394. If the decision was based on accurate information, the applicant may exercise the option to obtain an endorser (similar to a co-signer) on the loan. The LOAS will include an endorser promissory note with the denial letter. The endorser can be the other parent or anyone who meets the above credit criteria and is willing to endorse the PLUS loan. The student may not endorse the parent's loan. The endorser note should be returned to LOAS. When LOAS notifies our office of the loan denial, we will set the PLUS Loan Origination Rejection Form (PLORF) as a requirement on your financial aid account. An email will be sent to the student's College of Charleston Edisto email account with instructions to check the Student Requirements in the Financial Aid section of CougarTrail. The purpose of the PLORF is to provide options and for the borrower to officially communicate to the Office of Financial Aid exactly what (s)he plans to do about the PLUS denial. We will not cancel the application until we receive the PLORF form.
	Master Promissory Note On-Line
	Parents that have not borrowed from Direct Loans before must complete a Federal Direct Loan Master Promissory Note (MPN) before loan money can be disbursed. The Federal Direct Loan Master Promissory Note (MPN) can be completed at dlenote.ed.gov. Parents that have previously borrowed from Direct Loans without an endorser do not need to complete these requirements again for the same student. The Electronic MPN site allows you to complete and sign the parent MPN over the web using a Department of Education PIN.
	Interest and Fees
	The Federal Budget Reconciliation Act of 2005 has set fixed interest rates on Federal Direct Loans beginning July 1, 2006. Direct PLUS Loans are set at 7.9%. PLUS loans have an origination fee of 4%, but like student loans, PLUS have a 1.5% rebate for making the first 12 monthly payments on time, for an assessed fee of 2.5%. For example, if a parent borrows $ 10,000, only $ 9,750 will disburse to the student's account.
	Repayment
	Repayment begins 60 days after the final disbursement of the loan. For example, if you apply for the loan for the full academic year, half of the loan will be disbursed in the Fall and half of the loan will be disbursed in the Spring. You will begin repayment 60 days after the Spring disbursement. For repayment amounts, visit the online repayment calculator. The Direct Loan Servicer handles all repayment, deferment and forbearance of Direct Loans (including PLUS loans). Visit them online at www.dlssonline.com or call them at (800) 848-0979, TTY (800) 848-0983. There is no grace period for Direct PLUS Loans. However, you can postpone payments on your Direct PLUS Loan while you are in school. While you are enrolled in school on at least a half-time basis, you are eligible for an in-school deferment that allows you to postpone payments on your Direct PLUS Loan until you graduate or drop below half-time status. For College of Charleston undergraduate students graduating between June 2006 and May 2007, the average parent loan indebtedness is approximately $26,500. The average anticipated monthly loan payment is $320.17 (based on a standard plan at 7.9% interest for 120 months).
	In-School Deferment
	Direct Loan Servicing Center may automatically grant an in-school deferment on your Direct PLUS Loan based on information reported by your school to the U.S. Department of Education showing that you are enrolled at least half time. The Direct Loan Servicing Center will notify you of the deferment and of your option to cancel the deferment and begin making payments on your loan. Make sure you contact the Direct Loan Servicing Center to verify an in-school deferment was granted via www.dlssonline.com or (800) 848-0979.
	Additional Information
	A Guide to Federal Education Loans for Parents Website hosted by Direct Loans to provide additional information about PLUS loans. Ombudsman for Federal Student Aid Assists borrowers having problems with federal loans. (877) 557-2575 TTY Users - use the same number for Relay Call Services
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