Available to parents of dependent undergraduate students, the PLUS loan is a smart
educational financing solution. You may qualify for a PLUS loan even if your financial
assets limit your eligibility for other loans. And, you can borrow for each dependent
undergraduate student who is enrolled at least half time at an eligible two-or four-year
accredited college, university or proprietary school.
Effective July 1, 2006, PLUS loans are also available to eligible graduate and professional
students. For more information on the Grad PLUS program, click
here.
Funded by private lenders, guaranteed by the federal government and administered
by the college or university your child attends, the PLUS loan is one of the most
competitive student loan products currently offered to finance an undergraduate
college education.
You can borrow up to the entire cost of your dependent's undergraduate education
(minus other aid).
A PLUS loan fills in the gap when it comes to tuition costs, allowing you to borrow
up to the full cost of your child's education (minus other aid). Cost of attendance
includes:
-
Tuition and fees
-
Living expenses
-
Books, supplies, transportation and other personal expenses related to education
as determined by the school
-
Rental or purchase of equipment, materials and supplies required of all students
in a particular course of study
-
Disability-related expenses
-
Study-abroad programs, provided the program is approved for credit by the student's
home institution
-
Cooperative education
- Origination and guarantee fees
Once eligibility has been established, borrowers need to meet basic credit criteria.
Specifically, a PLUS loan applicant is not eligible for a PLUS loan if he or she
is determined to have an adverse credit history according to criteria in federal
regulations.
A PLUS loan applicant is considered to have adverse credit if any of the following
conditions apply:
-
The applicant is 90 days or more delinquent on the repayment of any debt
-
The applicant has had any debt discharged in bankruptcy during the five-year period
before the date of the credit report
- The applicant has been the subject of a default determination on any debt, a foreclosure,
a tax lien, a repossession, a wage garnishment or a write-off of a Title IV debt
during the five-year period before the date of the credit report
Borrowers are responsible for up to a 1.00% default fee and a 3.00% origination
fee, which is forwarded to the U.S. Department of Education. These fees are deducted
proportionately from the loan proceeds. The guarantor may elect to pay all or a
portion of the default fee on behalf of the borrower.*
Below is a list of eligibility requirements associated with the applicant for
the PLUS loan:
-
Must be borrowing to pay for the education expenses of a dependent undergraduate
student who meets the requirements for an eligible student
-
Must be a U.S. citizen or national, a U.S. permanent resident or eligible non-citizen,
as applicable
-
Must provide his or her valid Social Security Number
-
Must not be in default on any federal student loans
-
Must be the natural or adoptive parent, legal guardian who has been appointed by
a court and who is specifically required to use his or her own resources to support
the student, or step-parent (if their income and assets would have been taken into
account when calculating a dependent student's expected family contribution) of
the eligible student
-
Must not have any property subject to a judgment lien for a debt owed to the United
States
-
Must fulfill additional requirements imposed by the guarantor of a loan for which
the principal and interest have been discharged or written off
-
Must not have borrowed in excess of any annual or aggregate Federal Stafford Loan
limit
-
Must not be liable for an overpayment nor have exceeded annual or aggregate limits
imposed on any Title IV program
-
Must meet the guarantor's requirements with respect to state of residence or regional
service area
-
Must not have been determined ineligible solely due to the individual's error or
as a result of providing false or misleading information for a Federal Family Education
Loan Program (FFELP) loan that has already been obtained
-
Must comply with the requirements for submission of a Statement of Educational Purpose
-
Must be determined to have no adverse credit
-
Must meet the guarantor's requirements with respect to state of residence or regional
service area
- Must not have fraudulently borrowed a loan, provided information that caused his
or her loan to exceed applicable annual loan limits during an academic year, nor
knowingly exceeded an aggregate loan limit for the FFELP, Federal Direct Loan Program
or Federal Perkins Loan Program
Below is a list of Eligibility Requirements for the Dependent Undergraduate
student:
-
Must be a U.S. citizen or national, permanent resident, or eligible non-citizen,
as applicable
-
Must provide his or her valid Social Security Number
-
Must be under 24 years old as of December 31 of the academic year
-
Must be an undergraduate student enrolled or accepted for enrollment at least half
time in an eligible program at an eligible institution
-
Must not be a veteran of the U.S. Armed Forces
-
Must not be married or have other dependents
-
If already enrolled, maintains satisfactory academic progress in his or her course
of study according to the school's published standards
-
Not be in default on a federal student loan or owe money on a federal student grant
-
Must have at least a high school diploma or the recognized equivalent of a high
school diploma or the student must meet one of the following standards: The student
must (a) be beyond the age of compulsory school attendance in the state in which
the postsecondary school is located and (b) pass an independently administered ability-to-benefit
test that has been approved by the Department of Education. Or must have —
and may self-certify that he or she has — completed a secondary school education
in a home school setting that is treated as a home or private school under applicable
state law
-
Must not be serving in a medical internship or residency program required of doctors
of medicine, osteopathy and optometry. Students who are serving in an internship
as part of any other degree program (e.g., a dental or veterinary internship) are
considered eligible students for purposes of Stafford loans and PLUS loans, as applicable
-
Unless exempt, a male student must register with the Selective Service
-
Must not have had his or her eligibility for Title IV aid denied due to conviction
of possession or distribution of a an illegal drug within prescribed time frames
- Must not be incarcerated at the time funds are disbursed or delivered
When it comes to your child's college funding needs, you can't afford to wait. Chase
has streamlined the loan process so you can get the money you need as quickly as
possible.
We offer you two easy ways to apply for our Parent PLUS loan program for the
2009-2010 academic year!
Here's how the loan process works:
- Please be sure the student for whom you are borrowing completes the Free Application for Federal Student Aid (FAFSA).
- If you're eligible to borrow funds under the Parent PLUS loan program, you have
two options:
- Apply
online
- Call us toll-free at 1-800-487-4404 and a Student Loan Specialist will assist you
with your new Parent PLUS loan application and will answer any questions you have
about financing your child's education.
The statutory interest rate of a Parent PLUS loan disbursed on or after July 1,
2006, is fixed at 8.50%.
Parent PLUS loans disbursed between July 1, 1998, and June 30, 2006, are variable
rate loans that adjust annually on July 1 and are capped at a 9.00% interest rate.
Effective July 1, 2009, through June 30, 2010, the variable interest rate for all
loan periods, including repayment, forbearance and deferment is 3.28%
For Federal PLUS Loans Chase offers a 0.25% interest rate reduction for having monthly
payments automatically deducted from your bank account (ACH) by Chase.*
The repayment period on a PLUS loan begins on the date of the last disbursement
made on the loan; interest accrues from the date of the first disbursement on the
loan. The first payment on a Parent PLUS loan is due within 60 days of full disbursement
unless the parent agrees to delay repayment until after the dependent student's
grace period. You have up to 10 years (excluding periods of authorized deferment
or forbearance) to repay a PLUS loan. You may prepay all or any portion of your
loan at any time without penalty. Prepayment is encouraged as it can significantly
reduce the total amount of interest paid over the life of the loan.
Generally, you have up to 10 years to repay a PLUS loan (excluding periods of authorized
deferment and forbearance). Lengthening the term will significantly reduce your
monthly payment, although you should note that an extended repayment term will increase
the total amount of interest you will pay on your loan. However, since there are
no prepayment penalties under this program, you can reduce your interest costs by
increasing the amount you pay each month or by paying off your loan early without
penalty or fee.
Once the payment due date is established, it cannot be changed. However, you have
the option to make a payment at any time before the due date.
You may prepay all or any portion of your loan at any time without penalty. Prepayment
is encouraged as it can significantly reduce the total amount of interest paid over
the life of the loan.
No. You can repay your PLUS loan early without a penalty or fee.
Yes. Your PLUS loan is authorized in Part B of Title IV of the Higher Education
Act of 1965, as amended (the "FFELP" program). Under the PLUS loan program, you
can obtain low-cost student loans to help pay for the cost of higher education.
The PLUS loan is made to parents of eligible students or to graduate students by
lenders. The lender cannot require you to provide collateral for the loan. To protect
the lender from loss in the event of the borrower's death, disability, bankruptcy,
or default, the loan is guaranteed by a guarantor. In certain circumstances, the
lender also is protected if the student attends a school that closes or if the school
falsely certifies the borrower's loan. Guarantors are reinsured by the U.S. Department
of Education for all or part of the amount of the default claims it pays to lenders.
HOPE Scholarship and Lifetime Learning Tax Credits
These programs reduce the amount of your federal taxes based on qualifying "out-of-pocket"
educational expenses paid for yourself, your spouse or your dependent child. Only
one of these tax credits may be claimed per tax year.
HOPE Scholarship Tax Credit
With this tax credit, you can receive up to $2,500 per eligible student for a taxpayer
paying education-related expenses. This represents 100% of the first $2,000 of your
out-of-pocket educational expenses for each student, plus 25% of the next $2,000.
The HOPE Scholarship credit can be increased to $3,600 for enrollment in an eligible
institution located in a Midwestern disaster area.
Lifetime Learning Tax Credit
With this credit, you can claim a maximum credit of up to $2,000 (20% of the first
$10,000). This credit is calculated per family, not per student.
The Lifetime Learning credit can be increased to $4,000 for enrollment in an eligible
institution located in a Midwestern disaster area.
Because tax credits and deductions phase out at certain income levels, we encourage
you to consult with your tax advisor and review IRS Publication 970 , or call the IRS information
line at 1-800-829-1040 to determine your eligibility and learn how these benefits
apply to your specific situation.
New changes in the tax code may offer favorable tax advantages when you finance
your child's education with a PLUS loan.1
There is now an unlimited timeframe for student loan interest deductions —
depending on your income you may be entitled to deduct interest regardless of the
age of your loan. In addition, eligibility requirements are more flexible, so deductions
are available to a wider group of taxpayers. We encourage you to learn more about
the potential tax benefits.
You can apply now, or call the toll-free
number above to apply for a Federal PLUS loan.
|
