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Federal Direct PLUS Loan
All federal loans are processed through William D. Ford Federal Direct Loan program. Federal Direct PLUS Loan borrowers will apply for and obtain loan funds directly from the U.S. Department of Education.
Who May Apply
In order to qualify for a Federal Direct PLUS Loan, the parent must be the student's biological or adoptive mother or father. A stepparent whose assets and income are taken into account when determining the student's expected family contribution is also eligible to borrow a Federal Direct PLUS Loan. Parent borrowers must have good credit history to be approved. Students must be dependent, undergraduate students and enrolled at least half-time.
Interest Rates and Terms
Interest rate is a fixed-variable of 6.41%, capped at 10.5%. There is no grace period for a Federal Direct PLUS Loan. Interest begins to accrue immediately after the first disbursement of the Federal Direct PLUS Loan. Repayment of both principal and interest begins within 60 days after the final disbursement of the loan. The Direct Loan Program offers deferment and forbearance options. Federal Direct PLUS Loan borrowers can contact the Direct Loan Servicing Center at (800) 848-0979 for information on delaying repayment.
Parent borrowers may borrow up to the cost of attendance minus other financial aid the student has been awarded.
4.204% origination fee, 4.288% origination fee
NOTE: With the passage of the Budget Control Act, the Federal Direct PLUS Loan for which the first disbursement was made on or after July 1, 2013, but before December 1, 2013, the origination fee is 4.204%. As of October 1, 2013, the Federal Direct PLUS Loan for which the first disbursement is made on or after December 1, 2013, the origination fee is 4.288%.
A student must be continuously enrolled for at least six units (half-time enrollment) each term as an undergraduate to receive the loan. If the student drops below half-time at any time during the loan period, s/he will not be eligible for the loan proceeds.
Disbursement of Loan Proceeds
Upon approval, the U.S. Department of Education will send the Federal Direct PLUS Loan funds directly to Santa Clara University through the Electronic Funds Transfer (EFT) process. The funds will be credited to the student's account. All loans are issued in one disbursement per quarter beginning in fall term. The second disbursement will arrive at the beginning of the winter quarter for an academic year loan and the final disbursement will arrive at the beginning of the spring quarter.
How To Apply for a Federal Direct PLUS Loan
- Complete the Free Application for Federal Student Aid (FAFSA).
- Complete the Federal Direct PLUS Loan Application and Master Promissory Note (MPN) online at www.studentloans.gov.
- A Federal Student Aid PIN is required to apply for the Federal Direct PLUS Loan online. If you (parent borrower) have already completed the FAFSA, you already have a Federal Student Aid PIN and you must use your Federal Student Aid PIN on the Web site to apply for the loan. Do not apply for a new Federal Student Aid PIN.
NOTE: It is the custodial parent that is required to file the FAFSA with the student, regardless of which parent (custodial, non-custodial or step) wishes to obtain the Federal Direct PLUS Loan.
You will receive the results of your credit check immediately during the application process online. The Federal Direct PLUS Loan credit check will be denied if the borrower's (parent) credit report show any of the following:
- is 90 or more days delinquent on any debt as of the date of the credit report, or
- has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a debt under Title IV of the HEA (Higher Education Act) during the five years preceding the date of the credit report
If you are denied a Federal Direct PLUS Loan due to credit issues, you have the following options:
- you (parent borrower) may be approved with an endorser (co-signer)
- you (parent borrower) may appeal the credit decision with the ED's Direct Loan Department
NOTE: The student may qualify for an additional unsubsidized Federal Direct Loan. The student will need to request this additional loan in writing to the Enrollment Service Center along with proof of the Federal Direct PLUS Loan denial.