Direct PLUS (Parent Loan for Undergraduate Students)
PLUS Loans enable parents with good credit histories to borrow monies. These funds are designated to help pay the educational expenses of each child who is a dependent undergraduate student enrolled at least half-time (6 semester hours). The yearly limit on a PLUS loan is equal to the student's Cost of Attendance (COA) minus any other financial aid the student is receiving.
Interest rates are established each year for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans for which the first disbursement is on or after July 1 through the following June 30. The rate is the sum of a uniform “index rate” plus an “add-on” that varies depending on the type of loan and whether the borrower is an undergraduate or a graduate/professional student. Under the new provision, interest rates are the same for Direct Subsidized Loans and Direct Unsubsidized Loans taken out by undergraduate students, with a different rate for Direct Unsubsidized Loans taken out by a graduate/professional student and for PLUS Loans taken out by parent borrowers or graduate/professional student borrowers.
Under the law, the index rate is determined each year as the “high yield of the 10-year Treasury note” auctioned at the final auction held prior to the June 1 preceding the July 1 of the year for which the rate will be effective, plus a statutorily defined “add-on”. As noted, the add-on differs depending on the type of loan and the student’s grade level. Each loan type is also subject to a maximum interest rate (or cap).The interest rate for a loan, once established, applies for the life of the loan – that is, the loan is a fixed-rate loan.
Effective July 1, 2015 through June 30, 2016, Federal Direct PLUS loan interest rates are fixed at 6.84%. There are loan fees up to 4.27% (Origination and Default fees) that may be deducted proportionately from each delivery of loan proceeds.) Repayment usually begins within 60 days after the final loan disbursement for the period of enrollment for which the funds are borrowed. Application for the PLUS loan is accessed electronically at www.studentloans.gov. Students must have completed the Free Application for Federal Student Aid (FAFSA) for eligibility to be determined. PLUS applications must be completed annually from the studentloans.gov website in conjunction with the FAFSA application process.
Federal Direct PLUS Loans will be disbursed after a Master Promissory Note has been electronically signed with the Direct Loan Servicing Center. The PLUS MPN has a multi-year feature. This multi-year feature allows a parent of a dependent student to only have to sign one promissory note that can be used for up to 10 years.
Funds will first be used toward the student's bill at the Business Office. Any funds remaining can be used to purchase books at the Barnes & Noble at Georgia College bookstore approximately three days prior to the first day of classes through the end of the drop/add period. Students must complete the electronic authorization via their PAWS account prior to visiting the bookstore. Any remaining funds will be disbursed in a check payable to the parent, or check/direct deposit made payable to student as indicated on PLUS application approximately seven days after the end of the drop/add period each semester.