Federal Direct Parent PLUS Loan
Parents of a dependent undergraduate student are eligible to borrow under the Federal Direct Parent Loan for Undergraduate Students (PLUS) program, pending credit check approval by the U.S. Department of Education. You must be enrolled at least 6 credit hours to receive a Parent PLUS loan. An approved parent can borrow up to the total Cost of Attendance (COA) minus all financial aid and other resources received by the student. The PLUS Loan is an unsubsidized loan, meaning the borrower will be charged interest from the time the loan is disbursed until it is paid in full. Repayment begins 60 days after the loan is fully disbursed. This means that repayment will begin while the student is still in school. However, under certain circumstances, you can receive periods of deferment or forbearance that allow you to postpone loan repayment. These periods don’t count toward the length of time you have to repay your loan. For more information visit the U.S. Department of Education website. For Direct PLUS Loans first disbursed on or after July 1, 2014, and before July 1, 2015, the interest rate is 7.21%. There is a roughly 4% origination fee.
To apply and authorize a credit check for the Federal Direct Parent PLUS Loan, a parent must complete and submit an application electronically.
The Free Application for Federal Student Aid (FAFSA) must be completed for the appropriate academic year to be eligible for a Federal Direct PLUS Loan.
Master Promissory Note (MPN)
When borrowing through the Direct PLUS Loan program, the parent who borrows must sign a Master Promissory Note (MPN) agreeing to pay back the loan, with interest, according to the terms of the program. The appropriate parent must complete the MPN here. If your parent received a PLUS Loan at UIC during the 2004-2005 school year or later, an MPN was signed so that parent borrower should not have to sign another promissory note for the PLUS Loan program at UIC.
The parent borrower must not have an adverse credit history (a credit check will be done). If the parent borrower does not pass the credit check, they may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. In order to endorse the loan, the endorser must complete all requirements. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances. For more information please contact Applicant Services at 1-800-557-7394.
It should be noted that if a parent is denied a Federal Direct PLUS Loan, the student is eligible to borrow an additional Federal Direct Unsubsidized Loan. Those students who are in their first two academic years (freshman and sophomore) can borrow up to an additional $4000 annually. Students who are beyond their sophomore year can borrow up to an additional $5000 annually.
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