Parent PLUS Loan Information
• A completed and valid 2020-2021 FAFSA is required before you may apply for a Parent PLUS Loan.
• PLUS loans are restricted to the biological parents, or adoptive parents of a dependent undergraduate student. Step-parents
whose information is included on the FAFSA may also apply. Grandparents, aunts, uncles, & friends may not apply for a
• Eligibility for the PLUS loan depends on a modest credit check that determines whether the parent has adverse credit. An
adverse credit history is defined as being more than 90 days late on any debt or having had Title IV debt within the past five
years subjected to default determination, bankruptcy, discharge, foreclosure, repossession, tax lien, wage garnishment, or
• Repayment begins 60 days after the loan is fully disbursed. You may contact the Direct Loan Servicer to request to
defer payments until six months after your student graduates or drops below half-time enrollment, if you did not
already request a deferment on the application.
• The interest rate on the PLUS Loan is 7.079% fixed*. Interest begins to accrue on the loan once it is disbursed to UIW.
• There is a 4.236% net* origination fee charged by the Dept. of Education which is deducted from each loan disbursement.
• You may reduce or decline your loan or even return all or part of it, up to 120 days after funds have been released.
• PLUS loans may not be transferred to the student. The Parent PLUS loan is a Parent Loan, taken out in the Parent’s name.
• If you are not approved for the PLUS loan, you may add an endorser or increase the student’s unsubsidized loan.
• Your loan may be discharged if you pass away or if the child for whom you borrowed passes away, or if you become totally
and permanently disabled.
• For more information, please visit http://studentaid.ed.gov/types/loans/plus or contact the UIW Office of Financial
Assistance at (210) 829-6008.
*Origination fees and interest rates as of 10/01/2019, subject to change based upon legislative action.
What are the advantages of a Federal PLUS loan vs. a Private Loan?
Federal Direct PLUS Loan
· Less stringent credit approval than an alternative loan.
· Denial allows student to increase their Direct Unsubsidized
· Fixed 7.079%* interest rate for the life of the loan
· Net origination fee of 4.236%*, deducted from each
· Discharge in case of student or borrower death or in the case
of borrower total and permanent disability.
· No penalty for early repayment
· Approval based on credit criteria such as credit score, debt-
to-income ratio, etc.
· Denial does not result in additional funding for student.
· Variable interest rate, based on credit rating and market rates
· Origination fee may be added to principal balance rather than
deducted from disbursements
· Usually does not have a discharge option for borrower or
Sample Direct PLUS Loan Repayment Chart
(Based on Standard Repayment Plan of 10 Years. Other plans available.)