William D. Ford Federal Plus Direct Loan Program (For Parents)
For parent borrowers, the Direct Loan Program offers the William D. Ford Federal Direct PLUS Loan. These loans enable parents with good credit histories to borrow to pay the educational expenses of each child who is a dependent undergraduate student enrolled at least half time. To apply, the parent must complete the “William D. Ford Federal Plus Loan Processing Form” for the appropriate academic year. CUNY still requires that students complete the FAFSA if the parents wish to apply for the Federal PLUS Loan.
To be eligible to receive a Direct PLUS Loan, parents are generally required:
- To pass a credit check. If they do not pass the credit check, they may still be able to receive a loan if someone, such as a relative or friend, is able to pass the credit check, agrees to cosign the loan and promises to repay it if the student’s parents should fail to do so. Parents may also qualify for a loan even if they do not pass the credit check if they can demonstrate that there are extenuating circumstances.
- Students and their parents must also meet other general eligibility requirements for federal student financial aid.
The yearly limit on either type of PLUS Loan is equal to the cost of attendance minus any other financial aid for which a student is eligible. For example, if a student’s cost of attendance is $6,000 and the student is eligible for $4,000 in other financial aid, the student’s parents could borrow up to, but no more than, $2,000. The interest rate is variable, but will never exceed 9 percent.
The interest rate is adjusted each year on July 1. Parents will be notified of interest rate changes throughout the life of their loan(s). Interest is charged on the loan from the date of the first disbursement until the loan is paid in full.
Parents will pay a fee up to 4% of the loan, deducted proportionally each time a loan payment is made. A portion of this fee goes to the federal government to help reduce the cost of the loans. Also, if parents do not make their loan payments as scheduled, they may be charged late fees and collection costs.
