When determining how to pay for your education, it may be necessary to supplement your other financial aid with education loans. Direct Stafford Loans, subsidized and unsubsidized, are the students first choice in borrowing. Once you have reached your annual Direct Stafford Loan limit, there are two additional types of federal student loans from which to choose: the Parent PLUS Loan (for parents of dependent undergraduate students) or the Graduate PLUS Loan (for students in a graduate program). You may also want to consider an Alternative (Private) Student Loan, as some lenders now have education loans for parents, as well as fixed interest rate options. (Variable interest rates may change. Fixed interest rates do not change.) It is important to compare interest rates and origination fees, as well as deferment and repayment options before choosing a loan. To assist you in comparing federal and private loans, we have included a Federal Parent PLUS Loan Comparison Tool for you to use.
FIT participates in the William D Ford Federal Direct Loan Program. The funds for the Federal Direct Parent Loan for Undergraduate Students (Parent PLUS) come directly from the Federal Department of Education. PLUS loans, which are federally regulated, are usually more beneficial and recommended over most private/alternative student loans.
The fixed interest rate is 7% for Federal Direct PLUS loans disbursed between July 1, 2017 and June 30, 2018. There is also an origination fee of 4.24% (for loans disbursed before October 1, 2017) charged by the Department of Education. Parents, with good credit histories, may borrow up to the cost of attendance (COA) less other financial aid for their dependent undergraduate students who are enrolled in an undergraduate degree-granting program at least half-time. Credit checks are performed by the Department of Education.
What needs to be in place in order to apply for Direct Parent PLUS Loan:
- You must be a biological or adoptive parent, or a step-parent whose information is on the students FAFSA.
- You must be a U.S. citizen or an eligible non-citizen.
- The dependent student must be admitted into an undergraduate degree program and, for new students, the tuition deposit must be paid.
- FAFSA (Free Application for Federal Student Aid) must be completed for that school year. You will need an FSA ID to complete the FAFSA electronically.
- Student must enroll in at least 6 credit hours per term in a degree program to maintain eligibility.
Choices to Make Before Applying:
- Amount to request (See below)
- Loan period we suggest borrowing for the full year (August-May)
- Designate whether the school pays any credit balance (for reimbursement or indirect costs: books, transportation, etc.) to the student or to the parent
- Request a deferment while the student is in school or begin repaying 60 days after disbursement
- Request an additional deferment for 6 months after the student ceases to be enrolled at least half time
How do I determine the amount I can borrow?
Students can determine the amount for which their parents may be eligible by accessing MyFIT. The student signs on using their FIT ID and password, then click on:
- Go to FIT Applicant or Student TAB
- Under Financial Aid Resources go to My Financial Aid Checklist
- Click on Award by Aid Year on the drop down choose the Academic Year
- SELECT the appropriate Academic Year. Click on the Award Overview Tab - you will see your total Cost of Attendance
To determine the full annual limit that parents can borrow for the PLUS loan, subtract the financial aid awarded to the student from the student's cost of attendance (COA). Parents do not have to apply for the entire amount. You will be billed for direct expenses only (tuition, fees, and FIT housing). Other costs are estimated expenses and will vary. We suggest that you request the loan to cover the full academic year. If you request the PLUS loan for the full year, half of the loan will be disbursed in the fall and the other half will be disbursed in the spring. Repayment and interest will apply to funds only after they are disbursed. (If the parent wants to defer repayment of the Parent PLUS loan, the parent may request Deferment While Student is in School while completing the PLUS Application at www.studentloans.gov.
NOTE: You will not receive the full amount requested due to a loan origination fee of 4.276% which is charged by the Department of Education.
How do I apply to receive a Direct Parent PLUS Loan?
- Parent borrower logs into StudentLoans.gov with the parents personal information and FSA ID. We suggest that the parent with the best credit history apply for the loan. If your PLUS loan is denied, you may add the other parent, or someone else, as an endorser/cosigner. See further instructions below.
- Click Request Direct PLUS Loan
- Read instructions and View what you will need
- Click Parent PLUS and follow instructions.
- Complete the Parent PLUS Master Promissory Note (e-MPN) using the parent borrowers information and FSA ID.
NOTE: Please read through the remaining FAQs before clicking on the link to the application. This will help you to better understand the process and your options.
APPLY HERE: To apply for a Direct Parent PLUS Loan go to StudentLoans.gov.
Frequently Asked Questions
- How am I notified about the status of my loan?
You will be notified immediately of the credit check status.
The student will receive an email and an updated Financial Aid Award letter displaying the amount for which the PLUS loan has been certified.
The loan will NOT disburse until the parent borrower has completed the Parent PLUS Master Promissory Note (MPN).
- What if I am denied a PLUS loan?
If your PLUS loan is denied, you have the following options:
a. You may appeal the credit decision by contacting Direct Loan Originations at (800) 557-7394 option 3.
b. You may add your spouse, or someone else, as an endorser/cosigner. The parent will be sent a paper application for the endorser or the endorser can complete the endorser application online at StudentLoans.gov. To complete the application online, the endorser will need:
- The loan's reference or award ID number which you should receive when you apply
- To get an FSA ID
c. If you do not have an endorser/cosigner, students of parents who are denied the PLUS Loan may apply for an additional Federal Direct Stafford Unsubsidized loan. The student may apply for the additional Federal Direct Stafford Unsubsidized Loan of $4,000 as a freshman or sophomore, or $5,000 as a junior or senior for the academic year. A Direct Stafford Loan Request for the additional Federal Direct Stafford Unsubsidized loan may be downloaded or requested from Financial Aid Services.
- What happens after I am notified that my loan has been approved?
We electronically receive confirmation of your loan from the Department of Education. We determine the amount of PLUS funds for which you are eligible and send that information to the Department of Education. If this is the parent's first Federal Direct PLUS Loan or if the parent will be using an Endorser/cosigner, the parent must complete a Parent PLUS Master Promissory Note (MPN).
The parent can complete an electronic e-MPN online at StudentLoans.gov or a paper MPN can be provided by Financial Aid Services.
Repayment for loans borrowed between 07/01/2017 and 06/30/2018 is at a fixed rate of 7% interest starting 60 days after the loan is disbursed with a repayment term of 10 years. Repayment can be deferred upon request. You may choose to defer repayment while completing the Parent PLUS application, or contact our office if you would like to receive an In-School Deferment Request form.
- Where do the PLUS loan funds get sent?
Federal Direct PLUS funds are sent directly to the school. The online application gives the parent the option of having funds in excess of what is owed to FIT be given to the student or returned to the parent. The parent may also notify the Bursars Office of this decision in writing.
- Who do I contact with questions about my Direct Federal PLUS loan or deferment?
For questions about your Direct Federal PLUS loan and deferment, contact your Servicer. To get your Servicers contact information, log into www.nslds.ed.gov with your information and FSA ID. If your loan has not disbursed, contact the Financial Aid Services office 212 217.3560.