Federal PLUS Loan

General Information

The Federal Parent PLUS Loan is a loan borrowed by a parent on behalf of a child to help pay for tuition and school related expenses. The Parent PLUS loan is a credit based loan with a fixed interest rate of 8.5%. Completion of the Parent PLUS loan application and Master Promissory Note will result in a credit check. Dependent upon the lender selected, credit will be pulled at the time of completion of the HESC Parent PLUS application or at the time of receipt of the school certification. The credit decision is generally valid for a six month period. As a result it is suggested to complete the Parent PLUS application for the 2009/2010 academic year after June 1, 2009 and apply for the full academic year (fall and spring semester). Request of additional funds throughout the academic year may result in an additional credit check. The borrower may be declined based upon credit history. If the borrower is declined due to adverse credit history, the student will be offered an additional Unsubsidized Stafford loan. View http://www.albany.edu/financialaid/add_unsub.shtml for additional information. The borrower may also contact the lender for supplemental review or co-borrower options if denied. Points to consider when applying for a Parent PLUS Loan at the University of Albany: Have you determined the appropriate semester(s) for borrowing?   Have you determined enough funds to cover your student’s bill with the University? The federal Parent PLUS loan has a 3% Origination Fee* and a 1% Default Fee** deducted from the loan amount prior to disbursements. (Example: the loan borrowed is $5000, the origination fee is $150; the default fee is $50; the total amount issued to the school is $4800).   Failure to request sufficient funds to cover the UAlbany balance due may also result in late fees. Please note that the maximum amount permitted to borrow appears on the UAlbany student’s award letter (for all freshman and transfer dependent students). If the UAlbany student has not received an award letter, or is a continuing dependent student, please email faoweb@albany.edu for guidelines for determining the Parent PLUS loan amount.   The UAlbany student can not accept the Parent PLUS loan, change or alter the loan request; only the borrower of the Parent PLUS may request, reduce, or cancel the Parent PLUS loan.   Allow enough time to request and process the loan prior to the UAlbany payment deadline(s).   You may use any participating Federal Family Education Loan Program (FFELP) guarantee agency or lender of your choice. If you do not wish to use HESC as your guarantor or you lender does not participate with HESC, please email the borrower name, student name, lender name, lender code, guarantor name, and a contact phone number for the borrower to faoweb@albany.edu.    *Origination fee – Is a fee charged by a lender for processing the loan. The amount is withheld from the loan prior to disbursement.   ** Default fee - The Federal Default Fee is a fee that must be charged and deposited to the Federal Fund held by each guaranty agency. This fund is used:   ·          to help borrowers having difficulty with repayment by advising them of their rights to deferments and forbearance, working with borrowers to get a more manageable repayment plan, and providing other tools to help borrowers solve their repayment difficulties;   ·          to reimburse lenders if borrowers default; and   ·          for operational costs of the FFELP program.