...you borrow conservatively, especially during the student's first year. Please keep in mind that you may need to borrow each year your son or daughter is in school to help meet the cost of education. Plan accordingly and keep loan debt manageable.
...you choose a lender who best suits your needs as a borrower. Although you may have a local bank that you deal with on a regular basis, some larger lending institutions are able to offer special incentives, such as delayed repayment, interest rate reductions, and low or no upfront fees.
...you choose a lender who uses AES/PHEAA as its guarantor. Although you are free to use any lender or guarantor that you choose, AES/PHEAA offers an online application process, an automated certification process and participate in electronic funds transfer (EFT), features that ultimately expedite the processing and disbursement of PLUS funds to the student's account.
What are PLUS Loans?Parent Loans for Undergraduate Students (PLUS) are an available resource to help pay for your child's educational expenses. In order to be eligible for a PLUS Loan, you must have an acceptable credit history and your son or daughter must be enrolled at least half time (at least 6 credits).
How much can I borrow?The annual limit on a PLUS Loan is equal to the cost of attendance less any other financial aid that the student is receiving. For example, if the cost of attendance is $15,000 and the student is receiving $7000 in other financial aid, then you could borrow up to--but no more than--$8000. Please be aware that lenders can charge you a fee up to 4% of the loan which is deducted from the amount borrowed.
What is the interest rate?The interest rate on a PLUS Loan is variable, yet it can never exceed 9%. For the 2008-2009 academic year, the interest rate is 8.5%. Interest rates are adjusted each year on July 1, and you will be notified of these interest rate changes throughout the life of your loan.
When does repayment begin?Repayment generally begins within 60 days of the second disbursement of the loan; however, interest begins accumulating at the time of the first disbursement. Some lenders offer a delayed repayment option for up to four years while the student is enrolled in school. If you are interested in the delayed repayment option, please contact your lender to see if they offer this option.
How do I choose a lender?When choosing a lender, you should do your homework and choose a lender that best suits your needs as a borrower. Some lenders offer special incentive to PLUS loan borrowers, such as delayed repayment options, interest rate reductions, and low or no upfront fees. Although you may use any lender or guarantor that you choose, we encourage that you choose a lender that uses AES/PHEAA as its guarantor. AES/PHEAA offers an online application process, an automated certification process and participates in electronic funds transfer, features that ultimately expedite the processing and disbursement of PLUS funds to the student's account. How do I apply for a PLUS Loan?The entire PLUS Loan process can be completed online at www.aessuccess.org. Once you are on this site, click on the "Apply for a Loan" link. You will need to provide your social security number, the student's social security number, as well as a requested loan amount. A credit check is conducted on this site for all potential borrowers. You will receive notification of your approval or denial in minutes. If you are a first-time borrower, you must complete a Master Promissory Note (MPN), which you may use your US Department of Education PIN as your electronic signature.
What happens if I am denied the PLUS Loan?If you are denied the PLUS loan, you may forward a copy of the denial to our office. Your son or daughter may be eligible for additional unsubsidized loan money through the Stafford Loan Program. You may also contact your lender to see if you could obtain a credit-worthy endorser or co-signer.
