Parents & Family

FAQs on the Parent Loan for Undergraduate Students (PLUS)

[Back to FAQ's]

• Who can borrow a Parent Loan for Undergraduate Students (PLUS) loan?
• Can a student ever borrow a PLUS loan?
• What if I am denied a PLUS loan?
• What is the PLUS interest rate?
• When does repayment begin?
• How much will my payments be? How long do I have to repay the loan?
• What happens if, as a parent, I'm already repaying a Direct PLUS Loan, then I take out another one for the same or another child? How does this affect my monthly payments?
• May I reduce the loan amount offered?
• Do I pay any fees?
• How much money can I borrow?
• Can I make changes to the loan amount during the school year?
• How can I get more information on the PLUS?

Who can borrow a Parent Loan for Undergraduate Students (PLUS) loan?

Only the parent, stepparent, or legal guardian of a dependent student.

[back]

Can a student ever borrow a PLUS loan?

Yes, but only if you happen to be a student who is also the parent of a child who is currently enrolled in college. In that case, you may take out a loan to pay the educational costs for your child, but not a PLUS loan for yourself.

[back]

What if I am denied a PLUS loan?

If denied a PLUS loan, you or your child may contact the Office of Financial Aid and Registrar to request information on other student loan funds. Call 800-232-1339, write to Office of Financial Aid and Registrar, 1049 University Drive, Duluth MN 55812-3011, or E-Mail umdhelp@d.umn.edu, Be sure to include the students UMD ID number or Social Security number when writing or sending E-mail to our office, to help them identify their records.

[back]

What is the PLUS interest rate?

The interest rate is variable and is adjusted each year on July 1. The parent PLUS loan interest rate is at an historic low of 4.86 percent. The origination fee is now just 2.5 percent. Note: Interest begins to accumulate on the date of the first loan disbursement.

[back]

When does repayment begin?

The repayment period begins on the day after the loan is fully disbursed. Your first payment is due within 60 days after the final loan disbursement. Repayment would begin 60 days after your final disbursement. Note: If, at any time, the student becomes ineligible, you will be billed for PLUS loans. This typically happens when the student cancels registration or s/he is over-awarded due to a change in registration status.

[back]

How much will my payments be? How long do I have to repay the loan?

Several repayment options allow you to repay PLUS loans in a way that best suits your circumstances:

• The Standard Repayment Plan requires fixed monthly payments of at least $50 over a fixed period of time (up to 10 years).
• The Extended Repayment Plan allows loan repayment to be extended over a period from generally 12 to 30 years, depending on the total amount borrowed. You still pay a fixed amount of at least $50 each month, but the monthly payments usually will be less than under the Standard Repayment Plan.
• The Graduated Repayment Plan allows payments to start out low and increase every two years. Your monthly payments must be at least half of what you would pay under the Standard Repayment.

Payments will go to the U.S. Department of Education's Direct Loan Servicing Center, where staff will provide the information you need to decide which plan is right for you. You may change the repayment plan later if your circumstances change.

[back]

What happens if, as a parent, I'm already repaying a Direct PLUS Loan, then I take out another one for the same or another child? How does this affect my monthly payments?

Your Direct Loan Servicing Center will send you one monthly bill for both loans. Depending on the repayment plan you have selected and the amount of your loans, your monthly payment may increase.

[back]

May I reduce the loan amount offered?

At the time your child submits her/his Financial Aid Notice (FAAN), s/he should cross out the total offered and write in a lesser amount.

[back]

Do I pay any fees?

An origination fee based on 4 percent of the loan principal will be deducted from each loan disbursement.

[back]

How much money can I borrow?

Your child will be offered the maximum amount that s/he is eligible to borrow, but you may reduce that amount if you do not need it. You may borrow any amount up to the cost of your child's education, minus any other financial aid s/he may receive. There is no borrowing limit based on a determination of your financial need. We encourage you to borrow only the amount you need at the time the loan is offered. You can always request the difference later if it is needed.

[back]

Can I make changes to the loan amount during the school year?

Yes. If your circumstances have changed since the time you accepted the loan, you may request an adjustment to your loan amount. You may increase the amount if you did not accept the full amount of the loan offered to you. To reduce the amount, please contact the Student Assistance Center, 8:00 a.m. - 4:30 p.m., Monday – Friday, 21 Solon Campus Center, 218-726-8000, 1-800-232-1339.

[back]

How can I get more information on the PLUS?

You may request published information from the federal government by calling their toll free number 1-800-433-3243, or go online.

[back]