Direct Unsubsidized Loans have lower fees and interest rates than PLUS Loans. In fact, the origination fee, or “loan fee” on a Direct Unsubsidized Loan is one-fourth of the fee you’ll pay for a PLUS Loan. Direct Unsubsidized Loans aren’t credit-based, unlike private student loans.
How much can you get from a Direct PLUS Loan?
What are the loan terms for Direct PLUS Loans?
| Max Loan Length | 30 years, depending on amount borrowed and repayment plan chosen |
|---|---|
| Interest Rate | Variable, does not exceed 8.25% |
| Max Loan Amount | $2,625 to $8,500 |
| Payment Frequency | Monthly |
| Prepayment Penalties | None |
Who pays interest on direct PLUS Loans?
However, since all PLUS Loans are unsubsidized, your parents will be charged interest during periods of deferment or forbearance. If they do not pay the interest as it accrues, it will be capitalized.
Who is eligible for a Direct PLUS Loan?
The U.S. Department of Education makes Direct PLUS Loans to eligible parents and graduate or professional students through schools participating in the Direct Loan Program.
What can a direct plus loan be used for?
Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school. PLUS loans can help pay for education expenses not covered by other financial aid.
What is the Federal PLUS loan for graduate students?
The Federal PLUS Loan is an unsubsidized federal education loan for graduate students and for parents of dependent undergraduate students. The Federal PLUS Loan, also known as a Federal Direct PLUS Loan, is available after the student exhausts eligibility for Federal Stafford Loans. Two versions of the Federal PLUS Loan
Can a parent delay payments on a direct plus loan?
However, parents may be able to request to delay making payments while their child is in school or for an additional six months after their child graduates, leaves school, or drops below half-time enrollment. Parents should contact their loan servicer for more information about how to delay making payments.
What are the alternatives to the Federal PLUS loan?
If the student has exhausted eligibility for the Federal Stafford Loan, the alternatives to the Federal PLUS Loan include private student loans and private parent loans. Generally, private loans require a creditworthy cosigner, which is usually the parent.
