PLUS Loan features
PLUS Loan Features at a Glance
* Parents may borrow up to the cost of attending Hampshire less any
financial aid received;
* FAFSA form must be completed by the student for whom the parent is
borrowing the loan; the FAFSA determines if the student is eligible
to receive the PLUS loan funds;
* FIXED RATE FOR 2006-2007: loans borrowed on or after July 1, 2006,
will have a FIXED interest rate of 8.50%;
* VARIABLE RATE FOR 2006-2007: effective 7/01/06, the new variable
rate for PLUS loans disbursed PRIOR to 07/01/06 is 7.94%; rate
changes annually on July 1, unless loan is consolidated for a fixed
interest rate; variable rate will not exceed 9.00%;
* 3% origination fee is charged of the amount borrowed and is
deducted from the loan proceeds;
* up to 1% guarantee fee may be charged by guarantor;
* may defer monthly payments while student is enrolled; must apply
for a forbearance every year through loan servicer;
* variable interest rate may be replaced with a FIXED interest rate
through loan consolidation;
* 10 year repayment term; 25 year repayment term if loans total over
$30,000 ($30,000 in either one loan or total of all PLUS loans with
same lender);
* loan is in parent borrower's name only;
* loan is canceled if parent borrower or student dies;
* loan is canceled if parent borrower becomes permanently disabled;
* loan has very liberal credit terms and has no debt-to-income
ratio;
* payment begins within 60 days after second disbursement is made to
Hampshire;
* loan proceeds are usually disbursed in two equal amounts--one half
for the fall term, one half for the spring term;
* prepayment is allowed without penalty;
* student must be dependent of parent borrower and must be under 24
years of age; students 24 or older are not eligible for a PLUS loan
but may borrow an unsubsidized Direct loan in the same amounts as
listed below for a PLUS loan denial;
* if PLUS loan is denied, student may borrow an unsubsidized Direct
loan (up to $4000 for first and second year students; up to $5000
for third and fourth years); parent must provide Hampshire with
denial notice.
In addition to the above features, many lenders and servicers have
special borrower benefits which may decrease the interest rate,
fees, or length of term. Please take some time to investigate these
borrower benefits before choosing a PLUS loan lender.
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