The Federal Direct Parent PLUS Loan for Parent(s) of Dependent Undergraduate Students
The University of Georgia participates in the William D. Ford Federal Direct Loan Program.
The Federal Direct Parent PLUS Loan is an educational loan for parents of dependent (as defined by the FAFSA process) undergraduate students who are enrolled at least half-time. Financial need is not a requirement, but good credit is required. The annual maximum loan amount is based on the student's Cost of Attendance (COA) minus other aid received.
The Financial Aid Application Process must be completed each year by ALL students requesting loans, even if the only aid being requested is the Parent PLUS Loan.
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Repayment of a PLUS Loan begins on the date of the last disbursement in the Award Year. However, parents may request a deferment of repayment on PLUS Loans while the student on whose behalf the loan was obtained is enrolled at least half-time and for an additional six months after the student ceases to be enrolled at least half-time.
Interest that accrues on a PLUS Loan during a period of deferment may be paid by the parent or capitalized when the deferment period ends. Capitalization is the addition of unpaid interest to the principal balance of the loan and increases the outstanding principal amount due on the loan. Interest is then charged on that higher principal balance, increasing the overall cost of the loan to the parent. For this reason, we strongly encourage parents to pay the interest as it comes due rather than letting it capitalize.
Once the Federal Direct Parent PLUS Loan offer on the students financial aid Award has been accepted by the parent or student, the Student Accounts department in the Bursar's Office will mail to the student's address (as it appears on the student's FAFSA) the "Parent PLUS Loan Authorization Form". The form is to be completed and signed by the borrowing parent and returned to Student Accounts. The form advises the parent that a credit check will be performed and directs the parent to indicate if he/she wishes the balance of loans funds to be disbursed to the student or the parent.
Upon receipt of this form, Student Accounts transmits the loan origination information to the U. S. Department of Education. If the parent passes the credit check, the loan is then approved by the Department of Education. Student Accounts then mails the borrowing parent a paper Master Promissory Note (MPN) and instructions. Student Accounts will also provide instructions on completing a Web-based MPN in lieu of the paper MPN.
As is the case for all student aid at UGA, Federal Direct Parent PLUS Loan funds are disbursed by the Student Accounts Department. OSFA does not disburse checks. Federal Direct Parent PLUS Loans are disbursed each semester they appear on the student's Award. See the Student Accounts Web page (http://www.bursar.uga.edu/fin_aid_disbursement.html) for details.
If the parent is denied the Federal Direct Parent PLUS Loan, he or she will be notified by the U.S. Department of Education and provided the opportunity to obtain an endorser. If the parent elects not to use an endorser, the student may be eligible for the additional Federal Direct Unsubsidized Loan not to exceed the student's Cost of Attendance (COA). First and second year students may borrow up to an additional $4,000; third and fourth year students may borrow up to an additional $5,000. The student should complete the Change in Aid Request Form to request an increase in the unsubsidized student loan. Please place a note in the "Other Requests/Additional Information" text box that the request is based on the PLUS loan denial.
Once the student and parent(s) complete a new Award Year Financial Aid Application Process, Federal Direct Parent PLUS Loans are automatically included in the student Award if the parent received a Parent PLUS Loan at UGA during the previous academic year. Any other parent of a dependent student who would like to borrow should provide us a written request for a Parent PLUS Loan including the student's name, Social Security Number (SSN) and indicate the desired loan amount. The request may be mailed, e-mailed to email@example.com (if e-mailed include only the last four digits of the student's SSN), or faxed to (706) 542-8217.
As a consumer, you need to know that the U.S. Department of Education will post your Federal Direct Parent PLUS Loan data on the National Student Loan Data System (NSLDS) which is accessible by the borrower, guarantee agencies, lenders and institutions which the Department of Education has authorized access to this data system.