Parent PLUS Loans
Parents are eligible to help their children meet college costs through the Federal PLUS Loan Program.
If the parent is denied and does not wish to appeal the credit decision or seek an endorser, the student can request additional unsubsidized loan funds.
FAQs
PLUS Loans allow your parents to borrow funds for your educational expenses if you are a dependent undergraduate enrolled at least half-time (6 credits minimum). Interest on PLUS Loans accrue from the date of disbursement.
To start the process at UM-Dearborn, you and one of your parents must complete the Federal Direct Parent Loan application at the top of this page and submit it to the Office of Financial Aid for processing. The loan will be originated and a promissory note will be available for the parent borrower to sign online at the StudentAid.gov.
A Direct Parent Loan's approval will be based on the credit worthiness of the parent borrower. Parents can obtain a co-signer for this loan. Parents must be U.S. citizens or eligible non-citizens and cannot be in default or owe a refund to any Federal student aid program.
Students must be enrolled at least half-time (6 credits) and meet the general eligibility requirements for Federal financial aid.
The yearly limit on a Parent/PLUS Loan is equal to your Cost of Attendance as established by the university, minus any financial aid or resources.
The proceeds of a Direct Parent/PLUS Loan will be applied to your tuition account electronically. On the Federal Direct PLUS application, your parent borrower can authorize the release of an excess loan funds to the student.
Students who have enrolled in the direct deposit program with the Student Accounts Office will receive their refund as a deposit to their checking or savings account. Parents who do not authorize the release of funds to the student will receive a refund check mailed from the university. Like all educational loans, all funds must be used for educationally-related expenses.
Yes. A loan can be canceled in writing by a parent before the loan has disbursed. Once the disbursement of the loan funds has been made, a Notice of Disbursement/Right to Cancel form detailing this transaction will be sent to your home. Your parents may cancel all or a portion of their loan if they inform the Office of Financial Aid & Scholarships within 14 days of disbursement.
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There is a nominal fee deducted from the proceeds of the loan when it is disbursed. If your parents do not make their loan payments when scheduled, they could be charged late fees or collection costs.
In the Direct Loan Program, parents may select to repay from the Standard, Extended, or Graduated Repayment Plan.
Parents may elect to defer payment until the dependent student ceases to be enrolled at least half-time. Interest will continue to accrue during the deferment period if it is not paid by the parent. Unpaid interest will be capitalized (become new loan principal).
There are tax incentives for certain higher education expenses. Parents may wish to consult with their tax advisor or review IRS Publication 970 at the IRS website for additional information.
Under certain circumstances, your parents can receive a deferment or a forbearance on their loan. Generally, the conditions for eligibility and procedures for requesting a deferment or a forbearance that apply to the Direct Stafford Loans also apply to PLUS Loans. The most common options used are for a student enrolled in college on a half-time basis, economic hardship or general forbearance.
Your parents, however, will be charged interest during periods of deferment or forbearance. If they don't pay the interest as it accrues, it will be capitalized.
There are certain conditions that allow for loan discharge. Your parents' loan cannot be canceled because you didn't complete your program of study at UM-Dearborn or because you didn't obtain employment after completing your studies.
Most questions can be answered by the staff of your parents' loan servicer.
If a parent is denied for a Parent/PLUS Loan and is unable to obtain a co-signer, there is an alternative for the student. If the student wishes to borrow, he/she will be allowed to borrow additional funds in the Federal Direct Unsubsidized Loan Program. Students' eligibility is limited by grade level, cost of attendance and the amount of financial aid and resources.
The student is not required to demonstrate credit-worthiness and the loan is subject to the terms and conditions of existing loans. Students may indicate their willingness to borrow additional funds through the Federal Direct Unsubsidized Loan Program on the Direct Loan PLUS Form.