Types of Financial Aid
Loan Programs
Federal Direct Parent PLUS Loans
Parents of dependent students are able to apply for the Federal Direct Parent PLUS Loan to supplement the student’s award package. PLUS loans are the financial responsibility of the parents, not the student.
If you are considering applying for a PLUS loan...
If you previously had a PLUS loan...
General Eligibility Requirements
Award Amounts
Interest Rates and Loan Fees
Summary of PLUS Loan Process
Crediting of Parent PLUS Loan Funds
Repayment of Parent PLUS Loan Funds
Postponing Payments
If you are considering applying for a PLUS Loan in 2009-10, there are several things you need to know:
- You will need to complete a 2009-10 Federal Direct Parent PLUS Loan Request Form and submit this form to the Office of Financial Aid at Winthrop University.
- You and your student must obtain a Federal PIN and file a 2009-10 Free Application for Federal Student Aid (FAFSA) on-line. If you already have Federal PINs, continue to use them.
- The interest rate on a Direct Parent PLUS Loan is fixed at 7.9%. (PLUS Loans made through FFELP carry an interest rate of 8.5%.)
- If you have PLUS Loans from various sources, you can apply to consolidate all your PLUS Loans into a Direct Consolidation Loan using an on-line or a paper application.
- Approval of a PLUS Loan requires a credit check for the borrower. The Direct Loan Servicing Center will conduct this process.
- All borrowers must complete a Master Promissory Note.
- Funds from PLUS Loan approvals will be credited directly to students’ accounts.
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If you previously had a PLUS loan, the above procedure is new to you. Here's why:
Beginning with the 2009-10 academic year, Winthrop University will be a participant in the William D. Ford Federal Direct Parent PLUS Loan program.
The federal government offers two sources of PLUS Programs. One is the Federal Family Education Loan Program (FFELP) through which many lenders nationwide provide funds to parents for their dependent undergraduate students. The second type of PLUS Program is the William D. Ford Federal Direct Loan Program (DL); funds for this program come directly from federal sources rather than third party lenders.
Beginning with the 2009-10 academic year, Winthrop University will move its PLUS program to the Federal Direct Parent PLUS Loan Program.
For over 13 years Winthrop University has participated in the William D. Ford Federal Direct Loan Program which has provided millions of dollars in federal student loans to thousands of Winthrop students. The Direct Loan Program is efficient and funds are readily available. Despite the current instability in the student loan market, Winthrop has been able to ensure that our students would have uninterrupted access to the federal loan funds they need through the Federal Direct Loan Program.
Due to the continuing instability of the student loan industry, Winthrop University has elected to move its Parent Loan Program from the Federal Family Education Loan Program to the Federal Direct PLUS Program.
At Winthrop, we understand that oftentimes change presents a challenge. Certainly this new procedure will present questions and concerns. You may email your questions to finaid@winthrop.edu or call our office at (803) 323-2189. We look forward to assisting you through this transition.
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General Eligibility Requirements
Student on whose behalf the parent is borrowing must file a 2009-10 Free Application for Federal Student Sid (FAFSA).
Borrower is a natural or adoptive parent of a dependent student who has been accepted for enrollment as a degree-seeking student; enrolled at least half-time; is a U.S. citizen, permanent resident or eligible non-citizen; and is making satisfactory academic progress.
Borrower does not have adverse credit history.
Neither parent borrower nor student has property subject to a judgment lien for a debt owed to the United States.
Parent borrower is a U.S. citizen, permanent resident or eligible non-citizen.
To continue to receive PLUS loans, you must reapply each academic year.
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Award Amounts
The maximum award amount of a PLUS loan that can be certified is determined by subtracting the student’s total award package from the student’s estimated cost of attendance for the loan period. However, a PLUS loan will not be certified for more than the amount requested on the Federal Direct Parent PLUS Loan Request Form.
The Office of Financial Aid can adjust the amount of your loan if changes occur to the student’s hours of enrollment or if your student receives additional financial aid from any source not reflected in the original award.
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Interest Rates and Loan Fees
The interest rate on a Federal Direct Parent PLUS Loan is fixed at 7.9%
The U. S. Department of Education charges a loan fee of 4% of the principal amount of each Direct PLUS loan. This fee is deducted proportionately from each disbursement of the loan. However, Direct PLUS loan borrowers receive an up-front interest rebate repayment incentive of 1.5% of the loan principal, making the effective up-front fee 2.5% (4% minus 1.5%). For example, a $5,000 PLUS loan would have a $125 fee deducted from the proceeds ($5,000 x 2.5%). The net proceeds would be $4,875 ($5,000 minus $125).
To keep the rebate, the parent borrower must make 12 consecutive on-time payments after the loan goes into repayment.
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Summary of PLUS Loan Process
Once the parent and student have determined to apply for a Direct PLUS loan, file the FAFSA and complete the Federal Direct Parent PLUS Loan Request Form. Once the FAFSA, Request Form and all documents required to complete the student’s award package have been received and processed, the PLUS loan request will be submitted to the Direct Loan Servicing Center for approval.
The Direct Loan Servicing Center approves the loan and notifies the parent borrower to complete the Master Promissory Note (MPN), if no MPN is already on file. Should the parent borrower be declined a PLUS loan, the student will be offered an additional unsubsidized Federal Direct Loan based on his/her grade level (freshman/sophomore offer of $4,000 and junior/senior offer of $5,000).
Please note that Winthrop University’s Office of Financial Aid is not authorized to approve or deny requests for Parent PLUS Loans.
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Crediting of Parent PLUS Loan Funds
PLUS loan funds are credited directly to the student’s account and will be applied to outstanding charges, such as tuition, fees, room and board. Unless indicated on the Federal Direct Loan Parent PLUS Request Form, that the credit balance be issued to the student, any credit balance will be issued to the parent borrower via paper check, which will be mailed to the address provided on the Request Form.
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Repayment of Parent PLUS Loan Funds
You will receive a “Welcome Letter” from the Direct Loan Servicing Center after they have received information from Winthrop University notifying them that we have credited your loan funds to your student’s account. The Servicing Center will oversee your loan account until your loans are repaid in full.
The first repayment installment must be made within 60 days of the full disbursement of the loan. The second disbursement of a PLUS usually occurs in January, so payment usually begins in March.
You select the repayment plan that fits your financial circumstances and you may switch repayment plans at any time without penalty by contacting the Direct Loan Borrower Services Department.
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Postponing Payments
Under certain conditions, you can receive a deferment or forbearance on the loan as long as the loan is not in default. Contact the Direct Loan Servicing Center online or by calling 1-800-848-0979 for more information.
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