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Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependentundergraduate student enrolled at least half time in an eligible program at an eligible school. BPCC participates in the Federal Family Education Loan (FFEL) Program which offers PLUS loans. Your parents can get a PLUS loan for you, provided they also have an acceptable credit history.

How do my parents get a loan?

For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your school or lender. Your parent may apply on-line or via phone by contacting the lender of choice. The lender will notify the school via fax, if your parent is approved or denied the PLUS loan. If your parent is approved, the school completes its portion of the application electronically and sends the information to your parent’s lender for evaluation.

If your parents don't pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if your parents fail to do so. Your parents might also qualify for a loan without passing the credit check if they can demonstrate that extenuating circumstances exist. You and your parents must also meet other general eligibility requirements for federal student financial aid.

How much can my parents borrow?

The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid, your parents can borrow up to $2,000.

Who gets my parents' loan money?

Your parents’ lender (for a FFEL PLUS Loan) will send the loan funds to BPCC.  In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your parents will receive the amount as a check, unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses.

What's the interest rate?

For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed (8.50 percent for FFEL PLUS Loans). For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2006-2007, the variable rate for these PLUS Loans 6.74 percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.

When do my parents begin repaying the loan?

Generally, the first payment is due within 60 days after the loan is fully disbursed. There is no grace period for these loans. Interest begins to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you're in school.

How do my parents pay back these loans?

They'll repay a FFEL PLUS Loan to a private lender or loan servicer. They'll repay their Direct PLUS Loan to the U.S. Department of Education's Direct Loan Servicing Center. To read more about repayment options this program, read the PLUS Loanssection in Funding Education Beyond High School: The Guide to Federal Student Aid.

Is it ever possible to postpone repayment of a PLUS Loan?

Yes, under certain circumstances, your parents can receive a defermenton their loans.

If they temporarily can’t meet the repayment schedule, they can also receive forbearance on their loan, as long as it isn’t in default. During forbearance, their payments are postponed or reduced.

Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance apply to both Stafford Loansand PLUS Loans. However, since all PLUS Loans are unsubsidized, your parents will be charged interest during periods of deferment or forbearance. If they don’t pay the interest as it accrues, it will be capitalized (that is, added to the principal amount of the loan, and additional interest will be based on that higher amount).

Can a PLUS Loan be discharged (canceled)?

Yes, under certain conditions. A discharge (cancellation)releases your parents from all obligation to repay the loan.
Your parents’ PLUS Loan can’t be canceled for these reasons: You didn’t complete your program of study at your school (unless you couldn’t complete the program for a valid reason—because the school closed, for example), you didn’t like the school or the program of study, or you didn’t obtain employment after completing the program of study.

For more information about loan discharge or repayment: If your parents have a Direct PLUS Loan, they should contact the Direct Loan Servicing Center at 1-800-848-0979, or go to www.dl.ed.gov. If they have a FFEL PLUS Loan, they should contact the lender or agency holding the loan.

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