Federal Direct PLUS Loan Information
Parents may borrow a Federal Direct PLUS Loan to help defer the education expenses for their dependent undergraduate student enrolled at least half time in an eligible program at ISU. When you apply for a Federal Direct PLUS Loan, the Department of Education will check your credit history. To be eligible for a Federal Direct PLUS Loan, you must not have an adverse credit history. If you are found to have an adverse credit history, you may still borrow a Federal Direct PLUS Loan if you get an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Federal Direct PLUS Loan if you do not repay the loan. The endorser may not be the student on whose behalf a parent obtains a Federal Direct PLUS Loan.
Eligibility
Student must:
- Be fully admitted as a degree seeking student at ISU.
- Be enrolled at least half – time when the loan is expected to be disbursed.
- Maintain Satisfactory Academic Progress standards.
- Student must be either a U.S. Citizen or eligible non-citizen (as defined by federal financial aid regulations).
- Must not be in default on an educational loan or owe an overpayment on a federal education grant, or other federal debt, or you have made satisfactory arrangements to repay that debt.
Parent Borrower Requirement:
- Must be a natural or adoptive parent of the student or a step-parent whose income is reported on the student’s completed FAFSA application.
- Must not be in default on an educational loan or owe an overpayment on a federal education grant, or other federal debt, or you have made satisfactory arrangements to repay that debt.
How to Apply for a Federal Direct Parent PLUS Loan
- File the 2009-2010 Free Application for Federal Student
Aid (FAFSA)
You can file the FAFSA at https://www.fafsa.ed.gov. All requested documents will need to be submitted to the Financial Aid Office. -
Complete the Federal Direct Parent PLUS Loan Application
The Federal Direct Parent Plus Loan Request Form must be completed and signed by the parent (borrower) in whose name the loan application will be made. Please mail or fax this form back to the Office of Student Financial Aid -
Complete the Parent PLUS Master Promissory Note (MPN)
Complete the online Master Promissory Note (MPN) for Parent PLUS Loans. - Receive Approval/Denial
You will receive notification directly from the U.S. Department of Education on your approval/denial. If you are denied a PLUS Loan you have the following options:
- Parent may be approved with an endorser (co-signer).
- Student may apply for an Unsubsidized Direct Loan based on student’s eligibility. They will need to submit a new Federal Direct Stafford Loan Request Form along with proof of PLUS denial.
How Much May I Borrow
A parent may borrow the student’s cost of attendance minus any financial aid (e.g., grants, scholarships, work-study, federal student loans) the student is already receiving for the school year.
What Are The Interest Rates and Fees
The Interest Rate is fixed at 7.9%.
Loan fee is 4% with front end 1.5% rebate. If parent fails to make 12 consecutive loan payments on time, loan
fee will revert to 4%.
Method of payment
- Loan funds are sent directly to Indiana State University from the U.S. Department of Education and credited directly to your student’s account.
- If you apply for a full academic year loan, half of the amount you apply for is disbursed at the start of the fall semester and the other half at the start of the spring semester.
- Funds will first cover any charges on the student’s account. Any excess funds will be refunded to the parent.
Repayment
To find out more about repayment options before receiving a Direct Loan, borrowers may contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).