Federal Direct Parent PLUS Loans are federal loans that may be offered upon request to eligible parents of eligible Tulane undergraduate students, regardless of need, once a Free Application for Federal Student Aid (FAFSA) has been completed. Students must be enrolled at least half-time (based on the standards for full-time in each division) and meet all other eligibility criteria.
Federal Parent PLUS Loans are designed to assist parents who need additional educational financing for their son or daughter's undergraduate education. Federal Parent PLUS loans are available to a parent whose dependent student is pursuing an undergraduate degree program, and meeting all other eligibility criteria (including maintaining Satisfactory Academic Progress). In addition, students and their parent/s must have completed the FAFSA. Upon request from the student or parent, PLUS Loan eligibility will be packaged by the University Financial Aid Office, but requests must be made at least a month before the end of the student's enrollment for the academic period. As with any loan, careful consideration should be made in determining amounts to be borrowed, as the loan must be repaid. To borrow a Federal PLUS loan for a student, the parent must be a U.S. citizen or eligible noncitizen, as well as the student's biological or adoptive mother or father. The spouse of a parent who has remarried (i.e., the student's stepparent) is also eligible to borrow a PLUS on the student's behalf, if his/her income and assets would be taken into account when calculating the dependent student's expected family contribution on the FAFSA. A legal guardian is not considered a parent for federal aid purposes.
If the parent applying for a PLUS loan is not the parent who completed the FAFSA or represented on the FAFSA, but is nonetheless a biological parent, and has not completed the CSS Profile non-custodial parent form, our office requires that this parent complete a Non-Custodial Parent PLUS loan addendum .
PLUS Loan Limits
The yearly limit on a PLUS loan is equal to a student's cost of attendance (including tuition and fees, and an allowance for room, board, books, travel and miscellaneous) minus any other financial aid the student is receiving.
Credit Requirements for the Federal Direct PLUS Loan
Federal Direct PLUS loan approval is based on absence of adverse notations on the borrower's credit report as reviewed by the lender (the U.S. Department of Education). A borrower is not eligible to receive a Direct PLUS loan if the borrower has an adverse credit history as determined in accordance with the Department's regulations. A credit check is conducted on each Direct PLUS Loan applicant to determine if the applicant meets this eligibility requirement. The Direct Loan regulations provide that an applicant who is determined to have an adverse credit history may receive a Direct PLUS Loan if the applicant obtains an endorser who does not have an adverse credit history, or documents to the satisfaction of the Secretary the existence of extenuating circumstances related to the adverse credit history. A Direct PLUS Loan applicant is considered to have an adverse credit history if he or she meets one or more conditions for a denied credit check:
Conditions for a Denied Credit Check
- Bankruptcy (Chapters 7,11, or 12 within the past 5 years)
Note: Department Policy does not consider Chapter 13 bankruptcy as adverse credit.
- Voluntary surrender within the last 5 years
- Repossession within the last 5 years
- Foreclosure proceedings started
- Foreclosure within the last 5 years
- Deed in lieu of foreclosure
- Accounts currently 90 days or more delinquent
Note: Unpaid collection accounts and charge offs are considered adverse credit.
- Wage garnishment within the last 5 years
- Defaulted loan that has been claim paid
- Lease or contract terminated by default
- County/State/Federal tax lien, within the past 5 years
If a borrower is denied a PLUS loan, only the lender can discuss the reasons for a denial. On occasion, a denial due to discrepancies on a credit report can be resolved. On a case-by-case basis, Tulane has the authority to award additional Direct Unsubsidized Loan funds to a dependent undergraduate student based on a determination that the student's parent is unable to borrow a Direct PLUS Loan due to having an adverse credit history or other exceptional circumstances.
How can I get a Direct PLUS Loan?
To get a Direct PLUS Loan, the student and parent/s must fill out a FAFSA. After the FAFSA is processed, Tulane University Financial Aid staff will review the results and will inform the student about their federal student aid eligibility, but will not include Federal DIrect PLUS Loan eligibility until the parent completes the PLUS Master Promissory Note (MPN) AND PLUS request application on www.studentloans.gov. In addition to the completion of a PLUS request loan application and a Federal Direct PLUS MPN (a binding legal document that lists the conditions under which borrowing is made and the terms of repayment), the loan must have also been approved for credit (no adverse credit), which may be determined online during the PLUS request application.
Steps for getting Federal Direct Loans in general may be found by clicking here.
Interest on the PLUS Loan
Interest is charged on the PLUS loan from the date the first disbursement is made until the loan is paid in full. Federal Direct PLUS Loans have a fixed rate of 7.90% for loans made on or after July 1, 2006 and before July 1, 2013. Federal Direct PLUS Loans first disbursed on or after July 1, 2013 but before July 1, 2014 will have a fixed rate of 6.41%.
Repayment of the PLUS Loan
Prepayment may be made on the PLUS loan without penalty. Generally, repayment is scheduled to begin within 60 days after the loan is fully disbursed; however, Parent PLUS Loan borrowers whose loans were first disbursed on or after July 1, 2008, may choose to have repayment deferred while the student for whom the parent borrowed is enrolled at least half-time and for an additional six months after that student is no longer enrolled at least half-time. Interest that accrues during these periods will be capitalized if not paid by the parent during the deferment. The standard repayment option schedules repayment over ten years; however, parents should check directly with their loan servicer to view the specific terms and repayment options of their loan.
Receiving the PLUS Loan
Federal PLUS loans for an academic year must be disbursed in two equal installments. Typically, students who are enrolled for the standard academic year will receive their first disbursement in August and their second disbursement in January. Funds are automatically credited to student Tulane Accounts Receivable accounts after students confirm their registration for the semester and continue to meet all eligibility requirements. Students can check their student accounts on-line through the Accounts Receivable website.
Withdrawing from the University
A student who anticipates withdrawing from Tulane after receipt of a federal loan should contact their Deans office to discuss the withdrawal process and visit the Tulane Financial Aid Office to discuss how withdrawing will affect their federal loans.
HISTORY: Two Federal Loan Programs
The U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs consist of what are generally known as Stafford Loans (for students) and PLUS Loans for parents and Graduate PLUS Loan for graduate and professional degree students.
New federal Stafford or PLUS loans made on or after July 1, 2010 must be made through the Federal Direct Loan Program by law. Prior to July 1, 2010, schools generally have participated in either the FFEL or Direct Loan Program but sometimes have participated in both. Under the Direct Loan Program, the funds for your loan come directly from the federal government. Funds for your FFEL will come from a bank, credit union, or other lender that participates in the program. Eligibility rules and loan amounts are identical under both programs, but interest rates, fees and repayment plans differ somewhat. Tulane participates in the Direct Loan Program exclusively beginning in the 2010 fall semester. Tulane participated in the FFEL Program exclusively through the 2010 spring semester. Tulane participated in both the Direct and FFEL programs during the 2010 summer semester.