Financial Aid

Parents of dependent students are eligible to apply for their own federal loan to help pay college expenses. We do not assume parents want to borrow to pay educational expenses. If you and your parents are interested in this program you should contact the campus financial aid office at your school. A parent may borrow the difference between the Cost of Attendance and all other student aid received by the student.

Application form

You (the student) must apply for financial aid using the FAFSA. You must also submit a PLUS loan request form available at your CUNY college Financial Aid Office.

Interest rate and repayment for PLUS loans

Plus loans taken for the 2012-2013 academic term are charged a fixed interest rate of 7.9%. The interest will not change throughout the life of the loan. Repayment of the loan begins within 60 days after the date funds are disbursed. The interest rate varies each year on new loans and is adjusted each July 1st.

To receive a PLUS loan you must:

• Request the loan from the financial aid office
• File a FAFSA
• Parents must be able to pass a credit check
• Parents and students must meet general eligibility requirements for federal student aid
• Must not be in default of any loan or owe a refund to any Federal Student Assistance program

Frequently Asked Questions

How do my parents apply for a PLUS Loan?

After completing a FAFSA your parents complete a Direct PLUS Loan application and promissory note that you'll get from your school's financial aid office. They will have to pass a credit check. If they don't pass they might still be able to receive a loan if they can demonstrate that extenuating circumstances exists, or if someone they know, who can pass agrees to endorse the loan and promises to repay it if your parents don't.

When does PLUS loan repayment begin?

Generally, within 60 days after the loan is fully disbursed (paid out). There is no grace period for these loans. This means interest begins to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you're in school.

What are the PLUS repayment periods?

The repayment periods for Stafford Loans vary from 10 to 30 years depending which repayment plan you choose. When it comes to repayment you can pick a repayment plan that's right for you. You can get more information about repayment by going to the U.S. Department of Education web site www.studentaid.ed.gov.

How much could you get in a PLUS loan?

The amount you could get is the student's cost of education minus other aid the student receives. This will equal the maximum loan amount.

Can a PLUS loan borrower postpone loan repayment?

Borrowers can request either deferment or forbearance. Receiving deferment or forbearance is not automatic. You or your parents must apply for it. You must continue making payments on your loan until your deferment or forbearance has been granted.

Deferment

A period of time during which no payments are required and interest does not accumulate. In the case on an unsubsidized Stafford Loan you must pay the interest.

Forbearance

Loan payments that are reduced or postponed.

If you temporarily can't meet your repayment schedule but you don't meet the requirements for a deferment, your lender might grant you forbearance.

• Interest continues to accumulate and you are responsible for paying it no matter what type of loan you have.
• Generally forbearance is for periods of up to 12 months at a time for a maximum of 3 years.
• You'll have to provide documentation to the holder of your loan to show why you should be granted forbearance.

Is there any prepayment penalty?

No. You can pay off these loans as soon as you wish.

Can my parents cancel their loan if they change their minds, even if they signed a promissory note agreeing to the loan's terms?

Yes, they can cancel just as you can.

Other than Interest, is there any other charge involved with a PLUS Loan?

Your parents will pay a fee of up to 4 percent of the loan, just as you would for a Stafford Loan.

Do they get the money or do I?

Your school first receives the loan funds and might require your parents to endorse a disbursement check and send it back to the school. Your school then applies the loan funds to your tuition, fees and other school charges.

If there are any loan funds left over, your parents will receive them either by check or in cash, unless they authorize the funds to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses.