Federal PLUS LOANS
Parent PLUS Loans are offered by the Department of Education (Dept.) for parents of dependent undergraduate students. Borrowers must be U.S. Citizens or eligible non-citizens. Approval is credit-based, and the maximum loan amount allowed is determined by subtracting all other aid awarded from the cost of education.
Requests should be submitted only after the student's aid award has been determined, and the health insurance decision has been made. Requests should be made before the August 10th Fall due date for Fall only or full-year loans, and before January 10th for Spring only loans.
Single-term loans are allowed, but parents typically borrow full-year loans for full-year students. Some parents may find that financing is needed for the Fall term, but are uncertain about Spring. In such cases, we recommend borrowing for the full year, and having us cancel the Spring portion if it is not needed, instead of borrowing two single-term loans. This way, financing is in place for Spring if needed, and can be easily cancelled if not needed.
Smith uses the online request method at StudentLoans.gov, which activates for use on July 1st. For more details, and information on how to apply for a PLUS loan, please review the information below.
Terms of the Loan
|First Disbursed||Interest Rate|
|July 1, 2015–June 30, 2016|
|July 1, 2016–June 30, 2017|
Note: Interest begins to accrue on disbursed amounts upon disbursement.
|First Disbursed||Origination Fee|
|Oct. 1, 2015 - Sept. 30, 2016|
Note: Origination fees are deducted from the requested loan amount, not added on top of the requested amount.
Example: You want $20,000 to pay to the account.
$20,000/.9573* = $20,892 = loan amount to request.
Example: You request $20,000.
$20,000 x .9573* = $19,146 = total credit to the account.
* This figure is based on a 4.272% loan fee.
How to Apply
1. Satisfy Prerequisites
Wait until the student's aid award has been determined. PLUS loans cannot be processed until this is complete. Even if you do not receive institutional aid, you must complete a FAFSA (Free Application for Federal Student Aid) in order to borrow a PLUS loan.
Because the required insurance decision affects the amount due and the borrowing limit, please complete the insurance decision process before applying for the PLUS loan. This must be completed prior to each year the student attends. Instructions on the health insurance process are sent to students through their Smith email accounts on or around July 1st.
2. Decide How Much to Borrow
During the loan request process, you must request either a specific whole dollar amount, or check the box requesting the maximum amount.
Keep in mind that the loan fee is deducted before pay-out. The current loan fee is 4.272%, which means that only 95.73% of your requested loan amount is whiat pays out to the student account.
If you want to net a specific amount, divide the desired net amount by .9573 and round down to determine the correct loan amount to request.
If you need assistance, contact us via email at email@example.com.
3. Request a PLUS Loan.
Sign in at www.studentloans.gov and make your request.
4. Complete a Master Promissory Note.
If you will be a first time borrower of this loan type for the named student, or if you previously borrowed this loan using an endorser, you must complete a PLUS Loan Master Promissory Note at www.studentloans.gov. If you have previously borrowed a PLUS Loan for the named student without an endorser, skip this step.
Process Overview for Approved Loans
- Parent requests a loan at StudentLoans.gov.
- Request is transmitted to Smith College.
- The loan is added to the aid award.
- The current term portion becomes a pending credit on the student account.
- The loan is originated with the Dept. of Education.
- The Dept. sends a disclosure to the borrower.
- The loan is linked to a master promissory note (MPN).
- The current term portion of MPN-linked loans disburses.
- The disbursed loan is reported to the Dept.
- The Dept. assigns the loan to a Loan Servicer.
- The Servicer notifies the borrower of this assignment.
- The borrower makes repayment with the Servicer.
- Loan proceeds pay directly to the student's tuition account.
- Full-year loan amounts are split equally between both terms.
- Disbursement typically occurs on a weekly basis during the aid year.
- Email notification of disbusement is sent to borrowers.
- Note: Unsatisfied aid requirements can prevent disbursement.
- PLUS Loan overpayments are generally refunded automatically.
- Credit balances on accounts with PLUS Loans are usually refunded to the PLUS Loan borrower, unless otherwise authorized.
- Borrowers can authorize the school to refund surplus amounts to the student directly during the online request process.
Repayment and Deferment
- Repayment of the loan begins 60 days after final disbursement. (For a single-term loan, final disbursement is the only disbursement. For a full-year loan, the Spring disbursement is the final disbursement.)
- Borrowers may defer repayment while the student is enrolled. This option may be selected during the online request process.
- The standard and default repayment period is for 10 years. It could be shorter or longer depending on the amount borrowed and what plan is selected. For assistance in determining repayment plan options, the servicer to which a PLUS Loan is assigned should be contacted directly.
- Denials may be overridden via appeal or by use of an endorser.
- Borrowers with loans approved via appeal or use of an endorser must complete "PLUS Counseling" at StudentLoans.gov.
- Endorsers must complete Endorser Addendums at StudentLoans.gov.
- Denials allow students an increased federal unsubsidized loan maximum.
- Unsubsidized loan increases due to PLUS denials are made upon request.
- Please notify us by email of whether you intend to pursue a denied loan or not so that we can close the case or provide added assistance.
- Applicant Services can provide appeal/endorser help at (800) 557-7394.
Please submit any questions or concerns to firstname.lastname@example.org