The Federal plus program is a popular financing option for parents of dependant undergraduate students. The loans are borrowed in the parent’s own name. The details involved are:
Loan amount: up to the full amount can be borrowed. The costs include tuition, room & board, allowance for books, personal expenses, and transport.
Credit qualification: borrowers will need to meet a minimum requirement to be able to apply. For instance, a credit check is conducted. Parents who don’t qualify can borrow additional federal Stafford student loan funds.
Interest rate: a fixed interest rate of 8.5% is charged if loans are borrowed after July 1st.
Loan fees: 3% original fee and a federal default fee of up to 1% will be deducted from each disbursement of your loan.
Disbursements: it will be done in thirds at the beginning of each academic quarter. Funds are disbursed directly to Stanford via Electronic funds Transfer and applied to your student’s University bill. A refund can be given if your disbursement exceeds the balance due.
Repayment: done after 60 days of full disbursement. Repayment is 10 years.
The plus loans are funded by private lenders like banks and credit unions. The federal government sets the limits on fees, interest rates and minimum deferment options. Lenders however offer more benefits beyond minimum government requirements. When re-applying, the same lender can be used.
How to apply
The following steps are followed:
Go to the link https://www.nela.net/hosted/stan1.aspx to request for the loan. You can specify the amount you want to borrow. The link is easy to use.
In 2-4 weeks, an email from Sallie Mae, the Company managing our online process will be received. The email will direct you to the website where you can specify you lender and complete your promissory note which, can be signed by electronic signature.
If the email is not received, check for your promissory note on Stanford’s OpenNet page.
For inquiries, you can call our loan processing agency, Northwest Education Loan Association (NELA), toll-free at (800) 979-4441. Be sure to identify yourself as a Stanford parent requesting a PLUS loan.
REFERENCES
Federal Parent PLUS Loans, http://www.stanford.edu/dept/finaid/loanprocessing/plus.html viewed on 3rd April 2008.
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