PLUS Loan

Similarities with Stafford and Perkins loans

• Offered under Title IV of the Higher Education Act of 1965 and are therefore backed by the full faith of the United States Government
• Can be consolidated through the federal student loan consolidation program

  Differences from Stafford and Perkins loans

• There are no limits on the amount borrowed up to the cost of attendance minus other financial aid. Living expenses are considered part of the cost of attendance.
• The repayment schedule for Direct PLUS Loans disbursed on or after July 1, 2008 is the same as the schedule for Stafford loans. However, for Direct PLUS Loans first disbursed before July 1, 2008, the repayment period begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. Repayment may be deferred while at least a half-time student; however, the unpaid interest is added to the principal.
• The interest rate is fixed at 7.9% and charged from the date of the first disbursement until the loan is paid in full.
• For undergraduate students, the loan is a commitment by the parent, rather than the student.
• Several different repayment plans are available.
• Credit history is taken into account, while with Stafford loans it is not.
• Do not have the postponement and discharge options available with Stafford loans.

  Changes as of July 1, 2006

Changes as of July 1, 2008