Parent Loan for Undergraduate Students (PLUS)

Parents of dependent undergraduate students can borrow loans from the Parent Loan for Undergraduate Students (PLUS) program. PLUS are designed to help parents pay for educational expenses that are not covered by other aid sources such as grants, scholarships, work study, and student loans. PLUS are unsubsidized (interest accruing) and are backed by the federal government. PLUS can be borrowed from either the FFDL or the Federal Family Education Loan (FFEL) program. See program options at the bottom of this page for more information on the two types of PLUS. All other information below is applicable to both programs.

• Qualifying Criteria
• Application and Promissory Note
• Amount
• Interest Rate
• Processing Fees
• Disbursement of Funds
• Repayment
• Program Options: FFDL vs. FFEL

Qualifying Criteria

- Parent borrower must not be in default on a federal loan.

- Parent borrower must either be a biological or adoptive parent, or a stepparent whose information is on the FAFSA.

- Student must be enrolled at least half time in a degree-seeking program and not be in default on any federal loans.

- Parent borrower generally will be required to pass a credit check. Borrowers that don't pass the credit check have the option to obtain a credit worthy endorser who agrees to repay the loan if the parent does not, or the option to allow the student to borrow additional funds from the Unsubsidized Ford Federal Direct Loan (maximum of $4000 for a freshman or sophomore and $5000 for a junior or senior).

Application and Promissory Note

Applications are available online by selecting one of two lender options at the bottom of this page. Both lending options use a Master Promissory Note (MPN) which is designed for parent borrowers to use as a multi-year note for one dependent student. There will be one MPN created for each parent/student combination. Generally, as long as the parent borrower, the dependent student, and the lender do not change, a new PLUS MPN is not required. There will not be an amount listed on the MPN since it can be used for multiple loans for multiple years. It's very important to keep disclosure statements to keep track of the amount borrowed. If a parent borrower applies with an endorser to get approved, then a new PLUS MPN will be required since the endorser is liable only for the specific loan or loans he or she agreed to endorse.

Amount

In most cases, the parent is eligible to borrow up to the cost of attendance minus any other financial aid the student receives. We recommend only borrowing what is absolutely necessary as the loan accrues interest from the day it is disbursed and there are processing fees charged on the loan.

Interest Rate

- Fixed Rate.

- Interest is charged on the loan from the date the first disbursement is made until the loan is paid in full.

- The interest rate for Ford Federal Direct PLUS Loans disbursed after 7/1/2006 is 7.90%.

- The interest rate for Federal Family Education PLUS Loans disbursed after 7/1/2007 is 8.5%.

Processing Fees

Lenders (private or ED) can charge up to a 4% processing fee. This is deducted from the loan disbursement amount. See FFDL or FFEL details for more information.

Disbursement of Funds

PLUS funds are sent to the University of Missouri - Columbia by the lender. The loan may be disbursed in two installments, generally equal amounts. The funds will first be credited to the student's MU account, and first used to pay any balance due for tuition and fees, room and board, and other school charges. If any money remains it will be refunded to the parent borrower to use to cover other educational costs of the student. The refund will be issued as a check, unless the parent authorizes it to be released to the student. Authorization includes the parent completing and returning a PLUS Refund to Student Request Form (accessible under printable forms) and other requested documents to the MU Student Financial Aid Office.

Repayment

Repayment must begin within 60 days after the final loan disbursement for the academic year. In the case of a fall/winter loan, the last disbursement would be made during winter semester, or January. Payments would then be due in March. The parent borrower must begin repaying both principle and interest while the student is still in school. Payments will be approximately $12 per $1000 borrowed per month (a minimum of $50 per month).

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