THE FAFSA MUST be filed (each year) before a parent applies for the Federal Parent PLUS Loan.
Families may need additional funds to assist with paying the educational costs at the University of New Haven. The Federal Direct Parent Loan (PLUS) is a federal loan program for credit-worthy parents of a dependent undergraduate student. Parents can apply for up to the Cost of Attendance minus any financial aid the student is receiving. Financial need is not required and the parent borrower cannot have an adverse credit history. The interest rate is fixed at 7%. Repayment of principal and interest begins after the second disbursement for a maximum of 10 years.
Eligibility for the Direct PLUS Loan is based on the borrowers credit worthiness. The U.S. Department of Education will run a credit check to determine if you are eligible for the loan. Parents are encouraged to apply for a loan for the entire academic year rather than applying prior to each semester.
Once all requirements have been met and appropriate documents submitted, the Financial Aid Office will process the federal Direct parent loan that was accepted on the student's Financial Aid Award. The U.S. Department of Education will place your loan with a federal loan servicer (company that collects the repayment of your loan(s)) and your loan information will be submitted to the National Student Loan Data System (NSLDS). Your loan information will be accessible to guaranty agencies, lenders, and schools determined to be authorized users of the system. To view your processed loans in NSLDS log into the NSLDS website using your FSA ID you used to sign the student's FAFSA.
If the parent applying is APPROVED for the Direct PLUS, a PLUS Master Promissory Note (MPN) must be completed. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s).
If the parent applying is DENIED for the Direct PLUS Loan:
1.) The parent may still be eligible for the loan if they can obtain a credit worthy endorser. the endorser would act as a "co-applicant" for the loan and agrees to repay the Direct PLUS loan if the parent does not repay the loan. OR
2.) The other parent may try to apply for the loan OR
3.) The student may borrow a limited amount of additional Federal Direct Unsubsidized Student Loan: $4,000 for First Year & Sophomores and $5,000 for Juniors & Seniors
The Direct PLUS loan is normally payable in two equal disbursements, one half of the total in each semester, and will not be disbursed to the student's Bursar account until the first day of the semester. There is an origination fee that is deducted from the loan before it is disbursed to the University. This origination fee is currently 4.272% but is subject to change.
Repaying your PLUS loan:
The following link offers important information about Repaying your parent PLUS loan. Repayment plans and calculators are available, as well as information on Deferment, Forbearance, Cancellation, and Consolidation. You can estimate your monthly payment using the Loan Repayment Chart.
Applying for the PLUS loan:
When applying for the Federal Direct PLUS Loan you will be directed to log into the website www.studentloans.gov using the same FSA ID you used to electronically sign your FAFSA. Once signed in, follow the instructions to "Apply for a PLUS Loan". If the parent who is applying for the Direct PLUS Loan does not have an FSA ID, you must first Create Your FSA ID in order to apply for this loan.