the time the loan is disbursed until it is paid in full. This loan is available only to part-time or full-time students without financial need. Students can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as the total does not exceed the annual loan limit, which is $18,500, depending on the grade level.
A Direct Parent Loan for Undergraduate Students (PLUS) is subsidized by the Department of Education. Parents must fill out the loan application form as well as a promissory note, which lists specific conditions, such as interest rates, grace periods, and repayment plans. Keep this document handy as you may need to refer to it throughout the course of the loan. The school will distribute the loan application, process the loan, and distribute the funds.
An FFEL PLUS Loan is subsidized by a lender or guaranty agency — an organization that administers FFEL loans by state. Parents are responsible for finding a lender that serves their state of residence. For the name, address, and telephone number of the agency serving your state, contact the Federal Student Aid Information Center at 800-433-3243.
To qualify for a PLUS Loan, you must have a good credit history and cannot be in default on your own student loan or owe a refund on any federal student aid program. If you are worried about your credit history, someone else can co-sign for the loan, but he or she will be responsible for repaying the loan if you are unable to do so. You can apply for an FFEL PLUS for one child and a Direct PLUS for another; one child cannot receive both types of PLUS loans.
The school will automatically credit the amount of the loan toward tuition, fees, and room and board. You will receive the remainder via cash or check, unless you request that the funds be given directly to your child. Both Stafford and PLUS loans have a fee of up to 4%, meaning yo
u will receive slightly less than the amount you are borrowing. Most loans are paid via check in at
least two installments per year.
Keep in mind that loans can only be cancelled within two weeks of the date you receive your award letter or by the first day of the payment period. Because loans are legal obligations that must be repaid with interest, failure to pay a loan can negatively affect your credit rating. To learn more about financial aid, visit www.student.ed.gov.
Grant Me A Wish
“If I had not been awarded grant money,” says Emory University senior Christopher Williams, “I would be attending school elsewhere, no questions asked.” The 21-year-old Columbia, South Carolina, native chose to pursue a degree in accounting and finance at Emory’s Goizueta Business School.
With more than $29,000 in institutional funding and $2,000 from federal work-study, nearly 80% of Williams’ financial aid package is need-based aid. The rest is a small, yet helpful, group of scholarships and loans. Emory’s tuition for the 2006–2007 school year is $32,100, while the total costs