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How to Apply for a Parent PLUS Loan

A parent can borrow a PLUS Loan to help pay education expenses for a dependent undergraduate student. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program. Parents must have an acceptable credit history to qualify for a PLUS Loan.

Here are the steps you must take when applying for a Parent PLUS Loan:

1. Whether a parent is applying for a new PLUS Loan or a renewal of a PLUS Loan, Thomas Aquinas College requires the student and parents to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA can be completed on-line at www.fafsa.ed.gov. This is needed so the College can confirm that the parent meets the necessary eligibility requirements.
2. We recommend you apply for a PLUS Loan on-line through the lender's website, but you may also apply by phone or by mail. We provide a list of recommended PLUS Loan lenders at the bottom of this page.
3. Parents must inform the Financial Aid Office at Thomas Aquinas College each year they intend to make use of the PLUS Loan Program so the appropriate information can be included as part of the student's financial aid package. A simple e-mail or phone call to our office is sufficient. The Financial Aid Office can be reached by e-mail at finaid@thomasaquinas.edu or by phone at (800) 634-9797, extension 5936.
4. The Financial Aid Office will revise the student's current year Payment Plan & Promissory Note so as to include the PLUS Loan as part of the payment plan. The revised Payment Plan & Promissory Note will be sent to you for signature.

Recommended Lender List for Parent PLUS Loans

Thomas Aquinas College does not have a "preferred lender list" but many families ask us for lender recommendations, so we have compiled a "recommended lender list" to assist you in applying for a Parent PLUS Loan. You are welcome to use any lender that participates in the Federal Family Education Loan Program. You are not limited to the lenders listed on our recommended lender list. If you borrowed a PLUS Loan in a prior year, we recommend you continue with that same lender to simplify communication with your lender.

When considering a method and criteria for recommending lenders, we decided the most important consideration is stability, that is, an assurance that the lender is likely to be in business not only this year, but also in subsequent years. Credit markets are very shaky in today's economy. Many small banks are exiting the Federal Family Education Loan Program. We recommend that you select one of the larger lenders so you are not faced with borrowing from one lender this year and another lender next year. Having multiple lenders can make it difficult when you are repaying your loans.

Our recommended lender list contains the seven largest FFELP lenders, determined by loan volume in 2007 (the most recent data available). We included all lenders that had more than $1 billion in loan volume per year and that have no regional or institutional limitations. The loan volume of these lenders is an indication they provide high quality service. If you should have a quality of service issue with any of these lenders, we would appreciate hearing from you.

As a Catholic college, we have incorporated into our recommended lender list a rating that indicates whether or not the lender in question supports a "culture of life." We based that determination on the lender's response to the question of whether their corporation contributes to Planned Parenthood.

The Basics About Parent PLUS Loans

How much can a parent borrow?
The annual limit on a PLUS Loan is equal to the student's cost of attendance minus any other financial aid he/she receives. For example, in 2009-10, the cost of attendance at Thomas Aquinas College is $33,348. This includes not only tuition, room and board, but also estimated amounts for books, personal necessities, transportation and student loan fees. As an example, if your son or daughter will receive $4,500 in other financial aid, you may borrow a net PLUS Loan (after fees) of up to $28,848 ($33,348 - $4,500).

Who receives the PLUS Loan disbursement?
The lender will send the PLUS Loan funds to the College as a paper check made co-payable to the parent and the College. Half of the proceeds are sent each semester. The College will send the disbursement check to the parent for his/her endorsement. After the parent endorses the check and returns it to the College, the funds will be applied toward tuition, room & board and any other school charges. If any loan funds remain, the parent will receive the remainder as a check, unless the parent authorizes the amount to be released to the student or to be left in the student's school account. Any loan funds must be used for education expenses.

What's the interest rate? Are there any fees?
For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed at 8.50 percent. Parents may have to pay a fee of up to 4% of the loan, deducted proportionately each time a loan disbursement is made. Three percent of this fee is paid to the lender and one percent is paid to a regional guaranty agency. In 2009-10, Thomas Aquinas College is guaranteeing all PLUS Loans through TGSLC, one of the few regional guarantors that continues to waive the 1% guaranty fee. Therefore the net PLUS Loan fee in 2009-10 will be 3%.

When do parents begin repaying a PLUS Loan?
A parent borrower has the option of beginning repayment on the PLUS loan 60 days after the loan is fully disbursed or waiting until six months after the student ceases to be enrolled on at least a half-time basis. In the latter case, the parent may postpone payment up to 4 years. Interest accrued during the postponed period will be capitalized. Parents may also choose to make interest-only payments while the student is in school. The length of the repayment period is up to ten years, depending on the original loan balance.

Is it ever possible to receive a forbearance or deferment while in repayment?
Yes, under certain circumstances, parents can receive a forbearance or deferment on their loans. A forbearance is a period during which a borrower is permitted to temporarily cease making payments or reduce the amount of the payments as long as he isn't in default. A deferment is a period in which a borrower is permitted to cease making payments due to specific circumstances, such as unemployment.

Generally, the conditions for eligibility and procedures for requesting a forbearance or deferment apply to both Stafford Student Loans and PLUS Loans. However, since all PLUS Loans are unsubsidized, a parent will be charged interest during periods of forbearance or deferment. If they don't pay the interest as it accrues, it will be capitalized, that is, added to the principal amount of the loan, and additional interest will be based on that higher amount.

If you have any questions regarding the Parent PLUS Loan program, feel free to call the College's Financial Aid Office at 800-634-9797, extension 5936, or to contact us by e-mail at finaid@thomasaquinas.edu. We would be happy to help you!