Available to parents of dependent undergraduate students, the PLUS Loan is a smart educational financing solution. You may qualify for a PLUS Loan even if your financial assets limit your eligibility for other loans. And, you can borrow for each dependent undergraduate student who is enrolled at least half time at an eligible two-or four-year accredited college, university, or proprietary school.
Effective July 1, 2006, PLUS loans are also available to eligible graduate and professional students. For more information on the Grad PLUS program, click here.
Funded by private lenders, guaranteed by the Federal government and administered by the college or university your child attends, the PLUS Loan is one of the most competitive student loan products currently offered to finance an undergraduate college education.
You can borrow up to the entire cost of your dependent's undergraduate education (the cost of attendance less other estimated student financial assistance).
A PLUS Loan fills in the gap when it comes to tuition costs, allowing you to borrow up to the full cost of your child's attendance (less any estimated financial assistance). Cost of attendance includes:
- Tuition and fees
- Room and board
- Books, supplies, transportation and other personal expenses related to education as determined by the school
- Rental or purchase of equipment, materials and supplies required of all students in a particular course of study
- Disability-related expenses
- Study-abroad programs, -provided the program is approved for credit by the student's home institution
- Cooperative education
- Origination and guarantee fees
Once eligibility has been established, borrowers only need to meet basic credit criteria. Specifically, a PLUS loan applicant is not eligible for a PLUS loan if he or she is determined to have an adverse credit history according to criteria in federal regulations. At the lender's option, a prospective PLUS borrower may obtain a creditworthy endorser if the borrower is otherwise unable to establish creditworthiness.
A PLUS loan applicant is considered to have adverse credit if any of the following conditions apply:
- The applicant is 90 days or more delinquent on the repayment of any debt
- The applicant has had any debt discharged in bankruptcy during the 5-year period before the date of the credit report
- The applicant has been the subject of a default determination on any debt, a foreclosure, a tax lien, a repossession, a wage garnishment, or a write-off of a Title IV debt during the 5-year period before the date of the credit report
Borrowers are responsible for up to a 1.00% default fee and a 3.00% origination fee, which is forwarded to the U.S. Department of Education. These fees are deducted proportionately from the loan proceeds. The guarantor may elect to pay all or a portion of the default fee on behalf of the borrower.*
Below is a list of eligibility requirements associated with the applicant for the PLUS product:
- Must be borrowing to pay for the educational costs of a dependent undergraduate student who meets the requirements for an eligible student
- Must be a U.S. citizen or national, a U.S. permanent resident or eligible non-citizen, as applicable
- Must provide his or her valid Social Security Number
- Must not be in default on any federal student loans
- Must be the natural or adoptive parent, legal guardian who has been appointed by a court and who is specifically required to use his or her own resources to support the student, or step-parent (if their income and assets would have been taken into account when calculating a dependent student's expected family contribution) of the eligible student
- Must not have any property subject to a judgment lien for a debt owed to the United States
- Must fulfill additional requirements imposed by the guarantor of a loan for which the principal and interest have been discharged or written off
- Must not have borrowed in excess of any annual or aggregate Federal Stafford Loan limit
- Must not be liable for an overpayment nor have exceeded annual or aggregate limits imposed on any Title IV program
- Must meet the guarantor's requirements with respect to state of residence or regional service area
- Must not have been determined ineligible solely due to the individual's error or as a result of providing false or misleading information for a FFELP loan that has already been obtained
- Must comply with the requirements for submission of a Statement of Educational Purpose
- Must be determined to have no adverse credit
- Must meet the guarantor's requirements with respect to state of residence or regional service area
- Must not have fraudulently borrowed a loan, provided information that caused his or her loan to exceed applicable annual loan limits during an academic year, nor knowingly exceeded an aggregate loan limit for the FFELP, FDLP, or Federal Perkins Loan Program
Below is a list of Eligibility Requirements for the Dependent Undergraduate student:
- Must be a U.S. citizen or national, permanent resident, or eligible non-citizen, as applicable
- Must provide his or her valid social security number
- Must be under 24 years old (by 12/31/06)
- Must be an undergraduate student enrolled or accepted for enrollment at least half time in an eligible program at an eligible institution
- Must not be a veteran of the US armed forces
- Must not be married or have other dependents
- If already enrolled, maintains satisfactory academic progress in his or her course of study according to the school's published standards
- Not be in default on a federal student loan or owe money on a federal student grant
- Must have at least a high school diploma or the recognized equivalent of a high school diploma or the student must meet one of the following standards: The student must (a) be beyond the age of compulsory school attendance in the state in which the postsecondary school is located and (b) pass an independently administered ability-to benefit test that has been approved by the Department of Education. Or Must have-and may self-certify that he or she has-completed a secondary school education in a home school setting that is treated as a home or private school under applicable state law
- Must not be serving in a medical internship or residency program required of doctors of medicine, osteopathy, and optometry. Students who are serving in an internship as part of any other degree program (e.g., a dental or veterinary internship) are considered eligible students for purposes of Stafford loans and PLUS loans, as applicable
- Unless exempt, a male student must register with the Selective Service
- Must not have had his or her eligibility for Title IV aid denied due to conviction of possession or distribution of a an illegal drug within prescribed time frames
- Must not be incarcerated at the time funds are disbursed or delivered
When it comes to your educational funding needs, you can't afford to wait. Chase has streamlined the loan process so you can get the money you need as quickly as possible.
We are offering you an easy way to apply for our PLUS Loan program for the 2006-2007 academic year! Here's how the loan process works:
- Please be sure the student for whom you are borrowing completes the Free Application for Federal Student Aid (FAFSA).
- If it is determined you are eligible to borrow additional funds under the PLUS Loan program, you may apply directly as described below.
- You may apply now, or
- If you prefer to apply over the phone, call toll-free using the phone number provided and mention that you would like to apply for a Federal PLUS Loan through The Education Loan Marketplace. A financial professional will then assist you in the processing of your new PLUS Loan application and will answer any questions you may have about financing your child's education.
The statutory interest rate of a PLUS Loan disbursed on or after July 1, 2006 is fixed at 8.5%. PLUS loans disbursed prior to July 1, 2006 are variable rate loans that adjust annually on July 1st.
Federal PLUS Loan Rates
For all periods during repayment, including forbearance and deferment, the variable interest rate for PLUS loans disbursed between July 1, 1998, and June 30, 2006: 5.01%.
For Federal PLUS loans that have a guarantee date on or after June 1, 2008:*
- 0.25% interest rate reduction for having monthly payments automatically deducted from your bank account (ACH) by Chase
The repayment period on a PLUS loan begins on the date of the last disbursement made on the loan; interest accrues from the date of the first disbursement on the loan. The first payment on a parent PLUS loan is due within 60 days of full disbursement unless the parent agrees to delay repayment until after the dependent student's grace period. You have up to 10 years (excluding periods of authorized deferment or forbearance) to repay a PLUS loan. You may prepay all or any portion of your loan at any time without penalty. Prepayment is encouraged as it can significantly reduce the total amount of interest paid over the life of the loan.
Generally, you have up to 10 years to repay a PLUS Loan (excluding periods of authorized deferment and forbearance). Lengthening the term will significantly reduce your monthly payment, although you should note that an extended repayment term will increase the total amount of interest you will pay on your loan. However, since there are no prepayment penalties under this program, you can reduce your interest costs by increasing the amount you pay each month or by paying off your loan early without penalty or fee.
Once the payment due date is established, it cannot be changed. However, you have the option to make a payment at any time before the due date.
You may prepay all or any portion of your loan at any time without penalty. Prepayment is encouraged as it can significantly reduce the total amount of interest paid over the life of the loan.
No. You can repay your PLUS Loan early without a penalty or fee.
Yes. Your PLUS loan is authorized in Part B of Title IV of the Higher Education Act of 1965, as amended (the "FFELP" program). Under the PLUS loan program, you can obtain low-cost student loans to help pay for the cost of higher education.
The PLUS loan is made to parents of eligible students or to graduate students by lenders. The lender cannot require you to provide collateral for the loan. To protect the lender from loss in the event of the borrower's death, disability, bankruptcy, or default, the loan is guaranteed by a guarantor. In certain circumstances, the lender also is protected if the student attends a school that closes or if the school falsely certifies the borrower's loan. Guarantors are reinsured by the U.S. Department of Education for all or part of the amount of the default claims it pays to lenders.
HOPE and Lifetime Learning Tax Credits
These programs reduce the amount of your federal taxes based on qualifying "out-of-pocket" educational expenses paid for yourself, your spouse or your dependent child. Only one of these tax credits may be claimed per tax year.
HOPE Tax Credit
With this tax credit, you can receive up to $1,650 per eligible student for a taxpayer paying education-related expenses during a student's first two years of college. This represents 100% of the first $1,100 of your out-of-pocket educational expenses for each student, plus 50% of the next $1,100.
Lifetime Learning Tax Credit:
With this credit, you can claim a maximum credit of up to $2,000 (20% of the first 10,000). This credit is calculated per family, not per student.
Because tax credits and deductions phase out at certain income levels, we encourage you to consult with your tax advisor and review IRS Publication 970 , or call the IRS information line at 1-800-829-1040 to determine your eligibility and learn how these benefits apply to your specific situation.
New changes in the tax code may offer favorable tax advantages when you finance your child's education with a PLUS Loan.1 There is now an unlimited timeframe for student loan interest deductions - depending on your income you may be entitled to deduct interest regardless of the age of your loan. In addition, eligibility requirements are more flexible, so deductions are available to a wider group of taxpayers. We encourage you to learn more about the potential tax benefits.
You can apply now, or call the toll-free number above and mention that you would like to apply for a Federal PLUS Loan through Chase.
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