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Federal Direct Parent Plus Loan

2017-18 Academic Year

All students at Hood who apply for need-based financial aid are expected to meet their first level of financial need with subsidized student loan assistance. Interest does not accrue nor does repayment begin on subsidized student loans until the student ceases enrollment as at least half time. Most students will borrow through a combination of federal and institutional loan programs to meet a portion of their educational expenses.

Students who do not demonstrate need according to the federal need analysis methodologies may consider borrowing funds through the unsubsidized version of the Federal Direct Loan Program or private alternative student loan programs. Interest begins to accrue on unsubsidized student loans immediately during in-school and grace periods.

Parents of students who are ineligible for need-based forms of financial aid or who need additional funds beyond their financial aid eligibility may also consider borrowing through the Federal Direct Parent Loan for Undergraduate Students (PLUS) Program.

The individual processing procedures for each loan program are described below.

Federal Direct Loan Program

Under the Federal Direct Stafford Loan Program, loans are made directly by the federal government to students through Hood College.

Direct PLUS Loans

  • Direct Loans are low-interest loans parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education (the Department). PLUS Loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
  • Hood will receive proceeds of Direct Loans electronically after we receive confirmation that an electronic master promissory note has been submitted to the Federal Direct Loan Servicing Center and Entrance Counseling has been completed. The Direct Loan proceeds are credited directly to your student account.

Parent eligibility requirements for a Direct PLUS Loan

  • Your child must be a dependent student enrolled at least half-time
  • Enrolled at a Direct Loan Program school.
  • Be considered a "dependent" student (under 24, unmarried, and has no legal dependents at the time the Free Application for Federal Student Aid is submitted)

Additional requirements, Credit check & endorser alternative

  • A credit check will be done.
  • Parents and their dependent child must be U.S. citizens or eligible noncitizens
  • If you are found to have an adverse credit history, you may still borrow a PLUS Loan if you get an endorser (co-signer) who does not have such a history.

Applying for a PLUS Loan and the Master Promissory Note (MPN)

  • You must complete a PLUS Application and master promissory note (MPN).
  • The MPN is a legal document in which you promise to repay your loan(s), accrued interest and fees to the Department.
  • It explains the terms and conditions of your loan(s).

Loan limits, interest rate, and loan charges

  • There are no set limits for Direct PLUS Loans.
  • The school will determine the actual amount you may borrow.
  • The interest rate for Direct PLUS Loans is fixed.
  • In addition to interest, there is a loan origination fee, so the loan amount you actually receive will be less than the amount you have to repay.
  • Dependent students whose parents have applied for but were unable to get a PLUS Loan are eligible to receive additional Direct Unsubsidized Loan funds.

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