Parent/Plus Loans

Skip to Plus Loan Application Requirements

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

Where can I learn more about this type of loan?
For more information regarding available assistance we have provided the following links.

(Additional links are also provided at the end of this loan section.)

Before applying for this type of loan, get the best deal first!
Although not required, but highly recommended, we encourage the dependent student to complete the Free Application for Federal Student Aid (FAFSA).  By completing this form, the student will be considered for free money, (i.e. grants and scholarships), as well as, other possible student loans (i.e. Stafford and Perkins loans).  Usually the aid offered by the school is the better deal.

What are the eligibility requirements for a Plus loan?

Plus loan applicants and the student must meet general eligibility requirements for federal student aid.

To qualify, the parent's child/student must be enrolled full or at least half-time at an eligible school and the 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.

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.  Below are a few currently available lending options. 

Note: You  may apply for a Plus loan through any one of these Web sites links.

When applying, you need to complete a Plus Loan application and a Master Promissory Note (MPN).  If you would like more information about the application process, before applying, continue reading the question/answers (bold) sections below.

  • 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
  • Direct Lending also provides this type of loan.  Services are also available on line at: Direct Lending. They can be reached at 1-800-848-0979.
  • Nelnet also offers a similar service. They can be reached at 1-888-486-4722 or online at www.nelnet.net.

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

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.   Note:  These details may vary, check specifics with your lender.

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 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.

                                               The Parent Plus Loan Application Process

The Process in a Nutshell:

Basically the application process consists of selecting a lender, completing a Plus application and completing a PLUS Master Promissory Note (MPN).  Once you have selected a lender, you may complete the application process at the lender's Web site.

Step 1 -Choose Lender


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.

There are many lenders which we will place in two different groups:

  • Financial Institutions  (i.e., banks, credit unions)
  • Direct Lending (i.e., U.S. Department of Education)

You will complete this Step 1, within Step 2 and 3 below. 

 

Step 2 and Step 3

Complete the Plus Loan Application and the Master Promissory Note (MPN)

with an Appropriate Lender

If a parent decides to borrow this type of loan, a Plus Loan application and MPN must be completed by the parent. 

A parent can apply online by clicking on the online lender link associated with the lender of their choice.  The on-line process is recommended since it is the quickest way to apply.  A quick links option is also available in this section (below).

    1. Financial institutions (i.e., banks, credit unions).  The lender list provided in this section was designed for Student Loans, however some of these same lenders do process Plus loans.  When selecting a lender, make sure they do process Plus Loan.  (To help locate the Plus Loan section on a web site, enter the key words "plus loan" in the search box.)  You can access many lender links and the benefits they provide through the Finance Authority of Maine's Web site at: http://www.famemaine.com.  Fame's lender list is only a sampling of all the lenders available across the country. You may use any lender you choose.
    2. Or, you may select Direct Lending where the U.S. Department of Education is the lender and the school assists in administering the Direct Loan Program.  More information regarding Direct Lending is available at: www.ed.gov or dlenote.ed.gov. They can be reached at: 1-800-848-0979.

Quick Links Option:

We have provided a few quick lender links below for your convenience.

  • My lender is:

Acadia, Citizens Bank or Key Bank, Maine Advantange, - click on OpenNet/Sallie Mae  (- click on E-sign Promissory Note)

Note: If you do not see your lender listed, choose the "Other" category, available from the website.

 

What if I do not want to complete the Plus Loan Online?

If you choose to not complete the process online, you will need to contact a bank, credit union, or Direct Lending (1-800-848-0979) and request a Plus loan application and Master Promissory Note (MPN).  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.  Keep in mind that the paper process usually requires double the time to process. Estimated time required 4-6 weeks.

About the Master Promissory Note (MPN):

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.

My loan application and MPN are completed, what happens next?

Your loan will either be approved or denied.

If your loan is denied, the student should contact his/her college financial aid office for additional information and instructions.  There may be other lending options available.

If your loan is approved, your lender (or the Department of Education for Direct Lending) will inform the school that your loan has been approved.  Next, the school will certify the loan.   Note: The school cannot certify a loan amount that is greater than the student's cost of attendance minus other financial aid.  Other eligibility requirements also apply.

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 re certifies 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/school 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 MaineStreet. (the student will login to MaineStreet by using the same LogID and Password as their campus email.)   In the "Student Service Center", locate "Finances", here you will find itemized billing information.   If a "PLUS Loan" is listed as a "Payment" 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.

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 web site.  Information is also available here with additional links also provided at the end of this loan section.

What lender(s) did my parent(s) borrow from and how can we contact them?
The majority of UMFK's Stafford Loans are processed through Sallie Mae and/or Nelnet.   See Lender/Servicer chart below.

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.

Below is a chart with Lender/Servicer contact information.

Loan Servicer Telephone Number Web site. Addresses
Direct Lending 1-800-848-0979 www.ed.gov/directloan
FISC 1-800-370-3472 or 207-783-2928 www.fiscorp.com
Nelnet 1-888-486-4722 www.nelnet.net
Sallie Mae 1-888-272-5543 www.salliemae.com

Another option to locate loans would be through LoanLocator.  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 Web site. Web sites 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 at the end of this loan 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?

 

Last updated 5/19/2009, 6/10/09.