Types of Aid

Loans

PLUS Loans

Federal Parent Loan for Undergraduate Students (PLUS)

Federal Direct PLUS loans are for parents or stepparents who need to borrow for their child's undergraduate education. These loans are not based on income or assets and are never subsidized. Parents may borrow up to the total costs of their dependent's education, minus any financial aid their child may receive. A separate loan application is required in addition to a Free Application For Federal Student Aid (FAFSA).

The maximum interest rate is 9% and varies annually. Federal Direct Plus loans disbursed on or after July 1, 2006 will have a fixed interest rate of 7.9%. Interest begins to accrue with the first disbursement of loan funds. Origination and insurance fees of up to 4 percent may be deducted from each loan disbursement. Repayment begins within 60 days after the final loan disbursement of the academic year. There is no grace period. Parents could be paying both principal and interest on their loan while their child is still in college. Parents are responsible for repaying their Federal Direct PLUS loan even if their child does not complete his or her education.

Parents may apply for a Federal PLUS loan less than or equal to the cost of education minus all other aid. Congress has not stipulated a maximum loan limit for this program; however parents are encouraged to discuss their borrowing needs with their lenders.

Applications for the Federal PLUS program are available on the CSUSB Financial Aid Office website under Applications & Forms. In addition, the parent submitting the Federal PLUS application must also complete a Master Promissory Note with the Direct Loan Programs.

To qualify for a PLUS loan:

Parents must be a U.S. citizen or an eligible non-citizen, have a valid Social Security number and pass a credit check
The child must be a dependent and enrolled at least half time at a qualifying school

Dependent students whose parents have applied and are denied a Federal Direct PLUS loan may want to apply for an unsubsidized Stafford loan and should discuss this possibility with the Financial Aid Office at (909) 537-5227, option #3 or visit the office located at UH-150.

How are the PLUS loan funds delivered?

Federal Direct PLUS loan funds are disbursed by CSUSB to either the parent borrower or student. The Direct PLUS Application and Authorization Form allows the parent to indicate to whom they would like the excess funds sent to by check or Direct Deposit. If no selection is made, the funds will be disbursed to the parent borrower. If the parent designates the student to receive the loan funds, the parent is still ultimately responsible for the loan debt incurred.

How do I apply for a PLUS loan?

Complete the 2007-2008 Direct PLUS Loan Application and Parent Authorization Form and complete a Direct PLUS Master Promissory Note online at Direct Loans - Welcome to Electronic Master Promissory Note.

It is highly recommended that the student file the FAFSA (Free Application for Federal Student Aid) at www.fafsa.ed.gov in order to ensure all other grant and loan programs are considered for awarding prior to applying for Federal Direct PLUS loan.

What is the qualification criterion?

Parents must be a U.S. citizen or an eligible non-citizen, have a valid Social Security number and pass a credit check
The child must be a dependent and enrolled at least half time at a qualifying school
Direct PLUS borrowers must pass a credit evaluation in order to qualify

What if I do not pass the credit evaluation?

The PLUS credit check merely determines if the parent borrower has an adverse credit history. Students whose parents have been denied a Direct PLUS loan may request additional Unsubsidized Direct Student Loan funds by contacting the Financial Aid Office or the parent may request an Endorser by contacting Direct Loan Services at 1-800-848-0979.

How will the PLUS loan be disbursed?

Direct PLUS funds will be disbursed to your student’s account in equal quarterly installments to satisfy any outstanding institutional charges, usually at the beginning of each term. Based on the whom the parent authorizes on the PLUS Application to receive the excess funds, a check would be issued to either the parent borrower or the student.

Who is responsible for payment, parent or student?

The parent who completes the Direct PLUS application and Master Promissory Note is legally obligated to repay the loan debt.

Can parents defer repayment of their PLUS loan?

Parents can defer repayment of their PLUS loan as long as the loan isn't in default status. Because PLUS loans are unsubsidized, parents will be charged interest during periods of deferment. If they don't pay the interest as it accrues, it will be capitalized. For more information contact the Direct Loan Servicer at 1-800-848-0979 or the loan holder of your PLUS loan.

What does it mean to default on a PLUS loan?

Defaulting on a PLUS loan means that the lender has been unsuccessful in acquiring payment from the parent after numerous attempts. The loan is then turned over to the guaranty agency for collection, and the total amount owed becomes due, not just the payments missed

The consequences of default to the PLUS borrower may include:

Wage garnishment
Damage to borrower's credit rating
Garnishment of state and federal tax refunds
The parent loses eligibility of future student financial aid (The student's eligibility is not affected)
Assessment of collection costs

Can I convert all my PLUS Loans into one loan?

Yes, you can consolidate all your PLUS loans into one loan with one lender to facilitate your repayment. As a borrower, you will want to research all the consolidation options offered by various banks, lending institutions, and the U.S. Department of Education. You may visit the Direct Loan Servicer website at www.dlssonline.com/ to locate additional information regarding consolidation or you may reach them by phone at 1-800-848-0979.

To review our 2007-2008 Federal Direct PLUS (Parent) Loan Fact Sheet.

For additional information regarding Federal Direct PLUS Loans you may visit the Direct Loan Servicing at https://www.dlssonline.com

PLUS Loans for Graduate / Professional Students

Effective July 1, 2006, Graduate or professional students are now eligible to borrow under the Graduate PLUS Loan Program.

Graduate PLUS loan applicants are required to complete a FAFSA on a yearly basis to determine other Federal Aid eligibility and must have applied for their annual loan maximum eligibility under the Stafford (Subsidized and Unsubsidized) loan program(s) before applying for the Graduate/Professional PLUS Loan.

To apply for the Graduate PLUS Loan, a student should contact the Financial Aid Office at (909) 537-5227 to obtain a Direct Graduate PLUS Application and Authorization Form. The student will also need to complete a Graduate PLUS Master Promissory Note online at https://dlenote.ed.gov/empn/index.jsp.

Effective July 1, 2008, Graduate PLUS borrowers will also be required to complete a Entrance Loan Counseling workshop for Graduate PLUS before the funds can be disbursed to the student.