PLUS Loan Requirements

The PLUS loan, offered by the Department of Education (DOE), is a significant financial aid to cover college tuition fees and other related educational expenses. If you are a graduate, professional student or a parent of an undergraduate student, applying for this loan program will can facilitate the funds you may need for your education. To know whether you are eligible to be granted with this federal student loan, here are the following requirements that you need to know and secure:

  • Citizenship - You must be a US citizen or national, a legal resident with a "permanent resident card", or an eligible non-citizen with complete legal documents from the Immigration department.
  • Credit worthiness - Your debt record is considered unacceptable if you did not pay your debts within 90 days, or if within 5 years of the date your credit report was made you defaulted from both private and government loans, subjected to bankruptcy discharge, foreclosure, tax lien, and the like. However, a borrower with bad credit rating can still be qualified for a PLUS loan if he or she will have a cosigner who has a satisfactory credit performance.
  • FAFSA online application - Begin your application electronically, through the Free Application for Federal Student Aid website. Graduate and professional degree students applying for a PLUS loan are required to submit a FAFSA. Parent applicants are advised to encourage their dependents to submit a FAFSAapplication in able to avail all federal student aid financing that they may be qualified for.
  • Choice of lender (for FFEL PLUS loan) - The school will provide you a list of its preferred lenders. You are given the right to decide which participating lender you want to handle your loan. The government recommends that you must choose your loan provider wisely. Comparing their offers and benefits is advised. Direct PLUS loan applicants need not find loan providers because the federal government through the DOE serves as the direct lender. The school will assist you in furnishing loan related transactions including the disbursement of funds.
  • Loan application with promissory note - If you apply a PLUS loan through the Direct Loan program, you must obtain an application form, together with a promissory note from the school. Then, submit the document to the school's financial aid department. The same process applies to a PLUS loan requested through the Family Federal Education Loan, except that, the completed form will be submitted to the lender of your choice or your state guaranty agency, after the school completes it's required portion.
  • Fees and charges - Unlike some federal government student financing aids, borrowers of a PLUS loan are required to pay the fees associated with the loan processing. However, these fees will not be collected directly from the applicants but deducted proportionately from each disbursement of the loan. The DOE charges 4% of the principal amount of your PLUS student fund to cover the cost of your loan application. The deducted charges will be distributed to the federal government and the guaranty agency which processed the loan.

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