Loans to Parents
The Federal Direct Parent Loan Program is a credit-based loan and is available to assist parents or legal guardians with the financing of their studentís educational expenses. This loan allows a parent to borrow up to the total cost of education less the amount of financial aid that has been awarded to the student.
The interest rate is fixed at 7.21%. Interest begins accruing from the date of the first disbursement (fall semester) with repayment beginning within 60 days of the final annual disbursement (spring semester). The loan payments may be deferred while the student is enrolled. The funds are delivered electronically to the studentís school account. A 4.2% origination fee is deducted from each disbursement.
The parent may initiate the credit approval at www.studentloans.gov. The parent must sign in using the FAFSA PIN number assigned to the parent. Once signed in the parent should click ĎStart PLUS Application Process.í If approved, the parent will be notified immediately of that decision. Do not initiate credit approval until after April 1st prior to the academic year.
In the event the parent is credit denied, the student has the option to apply for an additional Unsubsidized Stafford Loan (additional eligibility for freshmen and sophomores is $4,000/yr and $5,000/yr for juniors and seniors).