Parent/Plus Loans

What is a Parent/Plus Loan?
Plus loans are loans that allow parents with good credit histories to borrow and pay the education expenses of each child who is a dependent undergraduate. As part of the eligibility requirements, parents will need to pass a credit check.

What are the Qualifications?
To qualify, the parent's child/student must be enrolled full or at least half-time at an eligible school and parent must meet the credit criteria. The Parent Plus loan is taken in the parent's name and usually requires the applicant to be credit-worthy. A cosigner may be required.

To see if you qualify for a Parent/Plus loan you may call the Parent Answer Service at 1-800-891-1410. This service is provided by Sallie Mae to parents. Counselors can pre-approve parents for Sallie Mae Plus loans and work with those who are not immediately eligible by offering customized credit counseling and alternative loan funding options. This service is also available on-line at www.salliemae.com

Nelnet also offers a similar service. They can be reached at 1-888-486-4722 or online at www.nelnet.net.

If for whatever reason a parent's Plus loan is denied, the student should contact his/her college financial aid office for additional information and instructions.

Note:
Qualifications may vary from lender to lender. It is in the parent's best interest to compare the loan features and benefits from lender to lender before borrowing this type of loan.

Note:
For more information regarding available assistance we have provided the following links:

What is the first step to the application procedure for a Parent/Plus loan?
To be considered for this type of aid, a student must: complete the Free Application for Federal Student Aid (FAFSA).

What is the interest rate on a Parent/ Plus Loan?
The interest rate is variable, this means that the interest rate could change each year of repayment but the rate will never exceed 9 percent. Repayment begins within 60 days after the final loan disbursement. There is no grace period. Interest begins to accumulate at the time the first disbursement is made until the loan is paid in full. Parents' must begin repaying both principal and interest while the student is in school.

Other than interest, is there a charge to get a Plus loan?
Parents will pay a fee of up to 4 percent of the loan. This fee will be deducted from the funds that you will receive.

How much can I borrow?
Parent/PLUS Loan borrowing limits vary with each student. The yearly limit is equal to student's cost of attendance minus any other financial aid. In other words, a Plus loan, when added to all financial aid received, (including Perkins and Stafford loans, grants, scholarships and work-study), cannot exceed the student's Cost of Attendance.

How do I request Parent/Plus loan funds and what are the application requirements?
First, a parent must choose a lender. The lenders listed below are used by many of our families and we have found that they process loans in a timely manner. A complete lender list is available online at: www.famemaine.com. If you choose a lender that is not listed, we cannot be sure that other lenders will process loans as smoothly. As part of the borrowing process, the borrower will need to complete a Plus - Master Promissory Note (MPN).

If a parent decides to borrow this type of loan, a separate application is required. A parent can either contact a bank or credit union for an application, or can apply online by clicking on the online link associated with the lender of your choice (below). The on-line process below is the quickest way to apply.

Note: If you are completing a paper application, the parent and the student must complete each of their sections on the form and will need to forward the form according to the instructions provided. (Note: the paper process requires usually requires double the time to process. Estimated time required 4-6 weeks).

When you sign a promissory note and receive loan funds, you are agreeing to repay the loan according to the terms of the note. Except in cases where the loan is discharged (for instance in the death of the student) the loan must be repaid with interest, even if the student does not complete the program, does not like the program, or is unable to procure employment after completing the program.

Complete the PLUS Master Promissory Note/Application form at:
If you wish to use:

  • SallieMae Educational Trust
  • Fleet Bank
  • Key Bank
  • Fort Kent Federal Credit Union (must have account)
  • NorState Federal Credit Union (must have account)
  • TD BankNorth

Click here to complete MPN: OpenNet/Sallie Mae *

If you wish to use: Nelnet Super Loan

After the Parents have completed the Master Promissory Note/Application, and the lender approves the Plus loan, the lender will contact UMFK Financial Aid Office, for us to certify the loan.

How and when do I get my Parents' Plus loan money?
Funds are credited to the student's account only when: the student's financial aid file is complete, the Parent's Master Promissory Note is complete, the lender approves the loan, the Plus loan funds are received from the lender, the parent endorses the check and returns the check to UMFK Business Office (if paid by check), the student is registered, the semester has begun and the financial aid office recertifies the loan amount.

Loan funds will be sent to your school by your lender. Loans are normally disbursed in two equal disbursement/installments, half of the total amount each semester. Loan funds must first be used to pay for the student's tuition, fees, room and board and other school charges.

If the lender sends your loan disbursement by electronic fund transfer (EFT) to UMFK, the parent will be notified by our business office.

If the lender sends your loan disbursement by check to UMFK, the Business Office will send the check to the parent for endorsement. The business office will also include an "Authorization form for Parent Plus Excess Funds Holding" to complete. This form will ask the parent borrower what he/she would like UMFK Business Office to do with any excess funds, should a credit balance remain after the Plus loan funds are applied to the student's account. The parent will be instructed to endorse the check and return both the endorsed check and the completed form to the UMFK Business Office.

If a credit balance remains on the student's account, as a result of the Plus loan, the parent will automatically receive the refund amount as a check or in cash, unless the parent authorizes UMFK to release the funds to the student or be applied to the student's school account. Any remaining loan money must be used for the student's education expenses.

How will I know if my Parents' Plus loan funds have been applied to my student account/bill?
To check if your Parent's Plus Loan funds have been received and applied to the student's UMFK student billing account, go to Bengal Tracker (DSIS), login and go to Student Billing. Next, go to the payment section. If "PLUS Loan" is listed with a minus sign under "Payments" this means that the amount shown has been received and deducted from the student's bill. Review the amounts for accuracy. If a bill is paid in full and any balance remains, that balance will be refunded to the student or the parent, in accordance with instructions received from the parent borrower. Contact the UMFK Business Office at 207-834-7552.

Note:
To access the Bengal Tracker (DSIS) information the student will need to enter his or her ID and Pin.

What parents need to know about paying back the Parent/Plus loan?
Loans require repayment. If you have borrowed a Parent/Plus loan, it must be paid back. For more information contact your lender or go to their website. Also, more information is available in The Student Guide.

What lender(s) did my parent borrow from and how can we contact them?
The majority of UMFK's Stafford Loans are processed through SallieMae and/or Nelnet. Note: You should know the name of your servicer before making contact with them. If you are unsure about who your lender/servicer or guarantor is, how much you borrowed, when you borrowed, etc., you may contact the Finance Authority of Maine (FAME). FAME can be reached at 1-800-228-3734 (in-state) or (207) 623-3263; Fax: (207) 623-0095; E-Mail: info@famemaine.com; web site: www.famemaine.com.

Loan Servicer Telephone Number Website Addresses
Sallie Mae 1-888-272-5543 www.salliemae.com
FISC 1-800-370-3472 or 207-783-2928 www.fiscorp.com
Nelnet 1-888-486-4722 www.nelnet.net

LoanLocator is the National Student Loan Clearinghouse's newest web site service, designed specifically to help student borrowers track their education loans. Available through www.nslc.org, LoanLocator delivers to borrowers an up-to-date list of loan providers and means for contacting them via telephone or Internet.

Tell me more about loan repayment, deferment and forbearance?
Generally, repayment must begin within 60 days after the loan is fully disbursed. There is no grace period for these loans. This means interest begins to accumulate at the time the first disbursement is made. Parents must begin repaying both principal and interest while the student is still in school.

A good place to begin looking for answers to your questions is with your servicer. We recommend that you call your servicer or visit their website. Websites are usually the best place to begin looking for information. Simply do a search by entering pertinent key words such as "Repayment" and "Deferment".

Under certain circumstances, parents can receive a deferment or forbearance on their loan, as long as it isn't in default. Generally, the same deferment or forbearance provisions that apply to Stafford Loans also apply to PLUS Loans. More information is available in the Student Guide. (Neal - need student guide link to information that matches this section)

OSFA Ombudsman Information
The SFA Ombudsman is working with student loan borrowers to informally resolve loan disputes and problems. They help borrowers having problems with the following federal loans:

  • Direct Loans - Subsidized and Unsubsidized Direct Student Loans, Direct PLUS Loans (for parents), and Direct Consolidation Loans
  • Federal Family Education Loans - Subsidized and Unsubsidized Stafford Loans, FFEL, PLUS Loans (for parents), and FFEL Consolidation Loans
  • Guaranteed Student Loans, SLS Loans
  • Perkins Loans

Ombudsman Contact Information
Customer Service Line: 1-877-557-2575

Web Site: http://ombudsman.ed.gov/

Mailing address:
Office of the Ombudsman
Student Financial Assistance
U.S. Department of Education
Rm. 3012, ROB #3
7th and D Streets, SW
Washington, DC 20202-5144

Where can I find more information?